UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


Mac.  Poland  Taylor  &  Co 


THE  LAW  AND  PRACTICE 

OF 


IN  THE 


STATE  OF  NEW  YORK 


BY 

T.  LUDLOW  CHRYSTIE,  B.  A.,  LL.  B. 


NEW  YORK 

THE  BANKS  LAW  PUBLISHING  CO. 
BAKER,  VOORHIS  &  CO. 

1914 


( 

19  \A- 


COPTRIQHT,    1914,   BT 

T.  LUDLOW  CHRYSTIE 


PREFACE 

I 

The  chapters  on  Procedure  have  been  so  arranged  as 
to  enable  the  practitioner  to  follow  in  sequence  the  nec- 
essary steps  to  be  taken,  the  subject  of  non-resident  es- 
tates being  contained  in  a  separate  chapter  to  obviate  the 
confusion  which  might  otherwise  arise  by  an  attempt  to 
treat  together  resident  and  non-resident  estates.  They 
are  designed  to  anticipate  and  answer  the  questions  usually 
asked  by  the  practitioner  who  is  not  thoroughly  familiar 
with  transfer  tax  procedure.  As  most  of  the  questions  of 
practice  are  dealt  with  and  determined  in  the  unreported 
adjudications  of  the  surrogates,  their  opinions  have  been 
quoted  from  wherever  possible. 

The  note  at  the  end  of  each  section  of  the  present  statute 
shows  the  last  amendment  thereof,  and  reference  to  the 
prior  statutes,  arranged  chronologically,  makes  accessible 
the  exact  phraseology  of  the  section  before  its  amend- 
ment. This  feature,  taken  in  conjunction  with  the  chrono- 
logical arrangement  of  the  annotated  Court  of  Appeals 
decisions,  and  the  separation  of  the  discussion  of  cases  ap- 
plicable to  the  present  law  from  those  dealing  with  the 
prior  statutes,  tends  to  clarity.  The  rights  of  the  parties 
being  governed  by  the  statute  in  force  at  the  time  of  the 
transfer  (Matter  of  Agnew,  N.  Y.  Law  Journal,  Decem- 
ber 13,  1913,  pos£,  page  53,  and  cases  cited,  page  54),  the 
reader  is  at  once  enabled  to  know  whether  he  should 
consult  the  text  dealing  with  the  law  as  it  exists  to-day,  or 
with  the  prior  statute  in  existence  at  the  time  his  particular 
transfer  was  made. 

The  second  section  of  the  book  contains  all  the  Court 
of  Appeals  decisions,  page  159,  the  exact  wording  of  por- 
tions of  the  opinion  being  set  forth  in  many  cases,  thus, 
in  most  instances,  avoiding  the  necessity  of  quoting  from 
the  opinion  when  reference  is  made  to  the  case.  These 

iii 


IV  PREFACE 

decisions  have  been  fully  annotated,  and,  it  will  be  noted, 
include  those  in  which  there  has  been  no  opinion  in  the 
reports,  recourse  being  had,  in  such  instances,  to  the 
printed  papers  on  appeal.  Some  of  the  cases  so  digested 
are  of  general  importance,  as  for  illustration,  Matter  of 
Potter,  199  N.  Y.  561,  post,  page  371;  Matter  of  Rees, 
208  N.  Y.  590,  post,  page  392;  Matter  of  Scott,  208  N.  Y. 
602,  post,  page  396;  Matter  of  Schwarz,  209  N.  Y.  mem., 
post,  page  399. 

Not  infrequently  the  Court  of  Appeals  confines  itself 
to  certain  phases  of  the  case,  and  closes  by  affirming  the 
lower  court.  At  times  the  portion  of  the  decision  affirmed, 
but  not  specifically  referred  to,  is  important,  and  for  that 
reason  there  has  been  included  in  such  cases  a  reference 
to  the  opinion  of  the  lower  court. 

By  the  discussion  of  the  subjects  topically  and  the 
alphabetical  arrangement,  page  582,  has  been  avoided  the 
use  of  the  conventional  index,  usually  so  unsatisfactory 
when  one  is  not  Sufficiently  familiar  with  the  subject  to 
know  under  just  which  index  line  his  particular  point  is  to 
be  found.  I  have  felt  that  the  reader  could  best  be  served 
by  the  method  employed  in  this  book,  which,  with  its 
liberal  cross  references,  places  at  -his  command  the  law 
and  practice  in  a  readily  accessible  form. 

While  the  compendium  serves  the  purpose  of  an  index, 
it  has  the  additional  object  of  leading  the  practitioner  to 
the  general  topic,  and  then,  by  means  of  subordinate 
headings,  guiding  him  to  the  exact  point  he  has  in  mind. 
Thus,  in  the  more  important  subjects,  there  will  be  found 
in  alphabetical  order  appropriate  chapters,  as,  for  instance, 
Appeal,  page  590;  Closely  Held  Stock,  page  612;  Good- 
Will,  page  706;  Power  of  Appointment,  page  768;  Re- 
mainders, page  817;  Trust  Deed,  page  867;  Vacating 
Decree,  page  878. 

During  the  progress  of  this  work  I  count  myself  fortu- 
nate in  having  had,  from  time  to  time,  the  benefit  of  dis- 
cussions with  Mr.  Anthony  J.  Barrett,  Mr.  Thomas  A.  S. 
Beattie  and  Mr.  Samuel  Riker,  Jr.,  of  the  New  York  bar, 
and  Mr.  Charles  E.  Haydock.  They  also  have  been  good 


PREFACE  V 

enough  to  read  portions  of  the  proof,  and  I  take  this  op- 
portunity of  expressing  my  appreciation. 

To  Mr.  Francis  K.  Raynor  of  my  office  was  assigned  the 
duty  of  assisting  in  the  proof  reading  and  the  preparation 
of  the  table  of  cases,  a  no  small  labor;  he  has  been  assid- 
uous in  its  successful  performance. 

T.  LUDLOW  CHRYSTIE 

New  York  City,  January  2,  1914. 


'TABLE  OF  CONTENTS 

PAGE 
THE  STATUTE 1 

THE  TAXABLE  TRANSFER 33 

RATES  OP  TAX  AND  EXEMPTIONS 40 

PROCEDURE 54 

Preliminary  to  Appointment  of  Appraiser 54 

Designation  of  Appraiser  and  Notice  of  Hearing 72 

The  Appraisal 82 

The  Schedules  of  Assets 96 

The  Schedules  of  Deductions 124 

NON-RESIDENT  ESTATES 133 

THE  COURT  OF  APPEALS  DECISIONS,  arranged  in  chronological 
order  of  their  decision 159 

PRIOR  STATUTES 403 

DECEDENT  ESTATE  LAW 533 

STOCK  TRANSFER  STATUTE 564 

RULINGS  OF  STATE  COMPTROLLER  ON  STOCK  TRANSFER  STATUTE  . .  573 
TABLES  EMPLOYED  BY  SUPERINTENDENT  OF  INSURANCE 580 

COMPENDIUM  OF  THE  INHERITANCE  TAX  LAW  AND  PRACTICE,  ar- 
ranged topically  in  alphabetical  order 582 


Vll 


TABLE  OF  CASES  CITED 

Italicized  numbers  indicate  that  case  has  been  quoted  from 

A 

PAGE 

Abbett,  29  Misc.  567 332,  351,  737,  746 

Abraham,  151  App.  Div.  441.  .54,  55,  106,  134,  199,  200,  203,  221, 808, 

818,  836,  887 

Achelis,  N.  Y.  Law  Journal,  March  9,  1912 118 

Adsit  v.  Adsit,  2  Johns.  Ch.  448 672,  673 

Agnew,  N.  Y.  Law  Journal,  December  13, 1913.  .58,  664,  810,  860,  871, 

888 

Ahrens,  N.  Y.  Law  Journal,  May  14, 1913 265,  289,  605,  648 

Albrecht,  136  N.  Y.  91 N 803,  853 

Allen,  76  Misc.  88 368,  670,  676,  686,  740 

Althause,  168  N.  Y.  670 2,  176,  182,  193,  253,  390,  633,  730 

Ames,  141  N.  Y.  Supp.  793 . .  192,  205,  206,  221,  253,  270,  274,  321,  360, 

610,  746,  768 

Amherst  College  v.  Ritch,  151  N.  Y.  282.  .180, 181, 188,  209,  591,  634, 

643,  728,  831,  842,  848,  885 

Amsinck,  N.  Y.  Law  Journal,  February  21,  1913 211,  657,  842 

Amsinck,  N.  Y.  Law  Journal,  April  19,  1913 675 

Andrews,  N.  Y.  Law  Journal,  February  21, 1912 376,  655,  718 

Andrews  v.  Andrews,  188  U.  S.  14 313 

Anthony,  40  Misc.  497 751,  752,  888 

Arens,  N.  Y.  Law  Journal,  March  9,  1912 ISO 

Armstrong,  N.  Y.  Law  Journal,  February  20, 1912.  .301,  335,  383,  733, 

771 

Arnold,  114  App.  Div.  244 100,  137,  139,  595,  633,  745,  812 

Arnot,  203  N.  Y.  627 253,  261,  368,  379,  676,  686,  688 

Asche  v.  Asche,  113  N.  Y.  234 672 

Astor,  137  App.  Div.  922. .  105,  107,  592,  599,  727,  815,  816, 830,  841, 

848 

Atterbury,  N.  Y.  Law  Journal,  March  25,  1913.  .3,  37,  54,  218,  404, 

810,  871 

Augsbury  v.  Shurtliff,  180  N.  Y.  138 790,  805 

Austen  v.  Boys,  27  L.  J.  Ch.  714 707 

B 

Babcock,  Amelia  N.,  81  App.  Div.  645.  .186,  189,  251,  270,  403,  783, 

784,  823,  827,  859 
ix 


X  TABLE   OF   CASES 

PAGE 

Babcock,  Amelia  N.,  86  App.  Div.  563 634 

Babcock,  S.  D.,  115  N.  Y.  450 101,  379,  634,  662,  851 

Bach,  N.  Y.  Law  Journal,  November  21,  1911.  .327,  395,  615,  617, 

712 

Bachtel  v.  Wilson,  204  U.  S.  36 324 

Backhouse,  185  N.  Y.  544.. 79,  279,  309,  828,  679,  727,  746,  776, 

777,  878 

Badger,  N.  Y.  Law  Journal,  June  8,  1912 367,  662,  884 

Baker,  H.  B.,  178  N.  Y.  575. ..  .35,  83,  199,  265,  287,  342,  371,  589, 

643,  649,  656,  716 

Baker,  J.  W.,  67  Misc.  360 97,  179,  204,  287,  682 

Baldwin,  N.  Y.  Law  Journal,  December  11,  1913 637 

Balleis,  144  N.  Y.  132 176,  193,  609,  676,  685,  692,  695,  872 

Baltzer  v.  North  Carolina,  161  U.  S.  240 291 

Barbey,  114  N.  Y.  Supp.  725 218,  234,  259,  387,  671,  796 

Barnes,  N.  Y.  Law  Journal,  December  17,  1913.  .597,  694,  748,  811, 

815,  834,  848 

Barnes  v.  Underwood,  47  N.  Y.  351 719 

Barnum,  129  App.  Div.  418 633,  812,  884,  885 

Bartlett,  4  Misc.  380 585 

Bartlett  v.  Spicer,  75  N.  Y.  528 319 

Bartow,  30  Misc.  27 769 

Bass,  57  Misc.  531 270,  295,  652,  761 

Baudouine,  5  App.  Div.  622 210 

Baum,  121  App.  Div.  496 803,  853 

Beach,  154  N.  Y.  242 46,  281,  719,  738,  743 

Beaver  v.  Beaver,  117  N.  Y.  421 799,  806 

Becker,  26  Misc.  633 214,  656,  694 

Beckett  v.  Ramsdale,  L.  R.,  7  Ch.  D.  177 858 

Beckhardt,  N.  Y.  Law  Journal,  June  7,  1913 377,  655 

Beers  v.  Arkansas,  20  How.  (U.  S.)  527 291 

Beers  v.  Glynn,  211  U.  S.  477 Vide  Lord 

Bell  v.  Bell,  181  U.  S.  175 313 

Bennett,  120  App.  Div.  904 360 

Bennington,  67  Misc.  363 585 

Bentley,  31  Misc.  656 208,  214,  591,  610,  632,  855,  857 

Bernard,  N.  Y.  Law  Journal,  November  28,  1911 606 

Berry,  23  Misc.  230 101,  214,  226,  659,  813 

Billingsley,  1  State  Dept.  Rep.  569 383,  725,  825,  859 

Birdsall,  43  App.  Div.  624.  .38,  95,  189,  196,  199,  218,  322,  606,  608, 

644,  699,  704,  743 
Bishop,  82  App.  Div.  112.  .34,  106,  149,  166,  193,  335,  343,  651,  670, 

745,  833,  835,  845,  850 
Bishop,  188  N.  Y.  635 343,  592,  633,  651,  745,  815,  835 


TABLE    OF   CASES  XI 

PAGE 

Blackstone,  171  N.  Y.  682. .  135,  172,  206,  208,  867,  300,  310,  378,  601, 

610,  611,  642,  740,  745 

Blackstone  v.  Miller,  188  U.  S.  189 Vide  Blackstone 

Blau  v.  Flint,  138  App.  Div.  846 846 

Bloodgood  v.  Bruen,  8  N.  Y.  362 131 

Bogert,  25  Misc.  466 590,  747,  760 

Bolin,  136  N.  Y.  177 701,  790,  791,  799,  806 

Bolton,  Adele,  157  App.  Div.  935 106,  134,  836 

Bolton,  H.  B.,  35  Misc.  688 329,  -617,  668,  722,  746,  854 

Boon  v.  Moss,  70  N.  Y.  465 707 

Borup,  28  Misc.  474 256,  688 

Bostwick,  160  N.  Y.  489.  .36,  199,  229,  232,  385,  670,  797,  868,  869, 

871 

Brady,  N.  Y.  Law  Journal,  February  5,  1913 653,  668 

Brandreth,  169  N.  Y.  437.  .35,  55,  218,  236,  254,  259,  265,  340,  395, 
592,  618,  631,  633,  699,  707,  739,  783,  797,  804,  837,  841 

Brenner,  170  N.  Y.  185 290 

Brez,  172  N.  Y.  609.  .189,  269,  271,  284,  285,  348,  600,  642,  717,  808, 

822,  824,  859 
Bronson,  150  N.  Y.  1 . .  .  166,  192,  204,  206,  300,  310,  374,  604,  745 

Brower,  N.  Y.  Law  Journal,  July  15,  1913 167,  384,  722 

Brown  v.  Lawrence  Park  Realty  Co.,  133  App.  Div.  753.  .369, 399,  632, 

652,  735 

Browne,  195  N.  Y.  522 148,  274,  366,  592,  632,  662,  727,  745 

Bruce  v.  Griscom,  70  N.  Y.  612 585 

Brundage,  31  App.  Div.  348.  .95, 102,  214,  223,  224,  322,  379,  606,  632, 

662,  742,  851,  855,  857 

Buck  v.  Beach,  206  U.  S.  392 377 

Buckham,  N.  Y.  Law  Journal,  January  10,  1912 818 

Buckhout  v.  City  of  New  York,  176  N.  Y.  363 379 

Buckingham,  106  App.  Div.  13.  .163,  235,  240,  243,  251,  283,  285,  291, 

307,  738,  772,  816,  843,  884 

Bullard,  76  App.  Div.  207 247,  255,  259,  288,  705 

Burden,  47  Misc.  329 208,  768 

Burges  v.  Salmon,  97  U.  S.  381 809 

Burgess,  204  N.  Y.  265.  .55, 164, 186,  235,  243,  270,  285,  880,  599,  771, 

772,  781,  822,  823,  863 

.  Burke  v.  Valentine,  52  Barb.  422 719 

Burns  v.  Pethcal,  157  N.  Y.  716 358 

Burr,  16  Misc.  89 129,  172 

Bushnell,  172  N.  Y.  649.  .205,  232,  251,  275,  399,  735,  745,  824,  844, 

845 

Butler,  136  N.  Y.  649 95,  163,  177,  584 

Butler  v.  Johnson,  111  N.  Y.  204 131 


Ml  TABLE    OF   CASES 


c 

PAGE 

Cager,  111  N.  Y.  343 55,  163,  599,  809 

Callister,  153  N.  Y.  294 802 

Cameron,  181  N.  Y.  560 83,  805,  352,  763,  815,  878 

Campbell,  50  Misc.  485 633,  880 

Campbell  v.  California,  200  U.  S.  87 , 821 

Carnwright  v.  Gray,  127  N.  Y.  92 704 

Carpenter  v.  Comm.  of  Penn.,  17  How.  456 161 

Case,  122  App.  Div.  343 712 

Catlin  v.  Trustees  of  Trinity  College,  113  N.  Y.  133 . .  164, 180,  632, 651, 

685,  847 
Chambers,  N.  Y.  Law  Journal,  January  31,  1912.  .115,  327,  615,  627, 

720,  729 

Chanler  v.  Kelsey,  205  U.  S.  466 Vide  Delano 

Chapman,  199  N.  Y.  562  (196  N.  Y.  561) . .  122,  262, 309, 351, 366,  871, 

679,  776 

Chappell,  151  App.  Div.  774 115,  327,  395,  617,  653 

Chicago  and  Alton  R.  R.  v.  Wiggins  Ferry  Co.,  119  U.  S.  615 *316 

Church,  80  Misc.  447 673 

Church  of  the  Transfiguration  v.  Niles,  86  Hun,  221.  .227,  602,  685, 

693,  734,  836 

Clapp  v.  Sampson,  94  U.  S.  589 161 

Clark,  D.  L.,  9  N.  Y.  Supp.  444 171 

Clark,  Edmund  S.,  N.  Y.  Law  Journal,  February  9,  1912.  .172,  192, 

203,  274,  301,  754 

Clarke,  39  Misc.  73 285 

Clinch,  180  N.  Y.  300.  .191,  205, 206, 207,  253,  267, 300,  335,  610,  611, 

731,  733,  741,  745,  756,  835,  862,  875 

Gloss  v.  Eldert,  30  App.  Div.  338 675,  676 

Collins,  104  App.  Div.  184 83,  634,  639,  653,  747,  879 

Connelly,  38  Misc.  466 280,  591,  633,  879,  880 

Connoly,  38  Misc.  533 347,  820 

Coogan,  162  N.  Y.  613.  .203, 206, 215, 239, 397, 633,  739, 816, 876, 878, 

879 

Cook,  187  N.  Y.  253 . .  44, 46, 163, 177,  297, 299, 327, 336, 395, 584,  585, 
627,  637,  638,  679,  731,  738,  739,  758,  889 

Cook,  194  N.  Y.  400 203,  259,  339,  363,  590    . 

Cooksey,  182N.  Y.92. .  .122,  235,  251,  807,  349,  364,  776,  777,  842 
Cooley,  186  N.  Y.  220.  .116,  188,  193,  205,  321,  329,  355,  593,  604, 

.    634,  670,  684,  745,  845 

Cooper,  82  Misc.  324 594 

Corbett,  171  N.  Y.  516 164,  189,  264,  809,  829 

Cornell,  170  N.  Y.  423.  .36,  255,  259, 340,  384,  590,  593,  684,  699,  722, 

797,  804,  810 


TABLE    OF    CASES  Xlll 

PAGE 

CosteUo,  189  N.  Y.  288.  .83,  164,  189,  265,  344,  590,  592,  598,  728, 

809,  829,  848 

Cowan,  N.  Y.  Law  Journal,  July  24, 1913 36,  218,  230,  699 

Cox,  N.  Y.  Law  Journal,  January  10,  1912 360 

Craig,  181  N.  Y.  551 200,  226,  262,  289,  302,  342,  589,  818 

Crary,  31  Misc.  72 35,  114,  327,  644,  655 

Crerar,  App.  Div.  479 205,  591,  745,  814,  861,  885 

Crittenton,  N.  Y.  Law  Journal,  April  5,  1911 176,  692,  695 

Grouse,  34  Misc.  670 225,  253,  609,  685 

Croveno  v.  Ail  Ave.  R.  R.  Co.,  150  N.  Y.  225 809 

Cruger,  166  N.  Y.  602 218,  247,  868,  870 

Cullum,  145  N.  Y.  593 184,  193,  686,  876 

Cummings,  142  App.  Div.  377.  .317,  319,  343,  607,  632,  685,  728,  729, 

730,  759,  835 

Curtice,  185  N.  Y.  543. .  .114,  324,  338,  395,  614,  617,  618,  626,  629, 

656,  729 

Curtis,  C.  E.,  142  N.  Y.  219. .  .175, 179, 185,  197,  305,  381,  392,  588, 

599,  822 

Curtis,  S.  Jv  31  Misc.  83 278,  656,  744,  841 

Curtiss,  9  App.  Div.  285 128 

Cushing,  40  Misc.  505 634,  695,  743,  746,  845 

D 

Daly,  C.  E.,  79  Misc.  586 261,  681,  691 

Daly,  C.  P.,  34  Misc.  148 162,  180,  633,  729,  746,  849,  879 

Daly,  Marcus,  182  N.  Y.  524.  .135,  204,  205,  267,  278,  309,  601,  610, 

611,  741,  745 

Dana  v.  Fiedler,  12  N.  Y.  40 631 

Daniell,  40  Misc.  329 225,  275,  658 

Darrow  v.  Calkins,  154  N.  Y.  503 753 

Davis,  J.  W.,  184  N.  Y.  299.  .95,  222,  321,  592,  606,  633,  742,  743,  837 

Davis,  K.  J.  S.,  149  N.  Y.  539. .  .37,  55,  134,  186,  199,  201,  220,  403, 

590,  720,  721,  755,  810,  817,  819,  831,  836,  887 

Dee,  N.  Y.  Law  Journal,  December  6,  1913 247,  341,  645,  727 

DeGraaf,  24  Misc.  147 167,  189,  384,  659,  671,  782,  809 

Delaney,  N.  Y.  Law  Journal,  August  16,  1913 35,  645 

Delano,  176  N.  Y.  486. .  122,  215,  243,  251,  262, 280,  308,  374,  642,  696, 

770,  779,  818,  887 

Demers,  41  Misc.  470 38,  247,  289,  304,  342,  689,  641,  652 

Denny  v.  Manhattan  Co.,  2  Den.  115 357 

De  Peyster,  156  App.  Div.  938..  166,  188,  345,  368,  380,  670,  676, 

678,  744 

De  Sala,  N.  Y.  Law  Journal,  July  20,  1912.  .122,  605,  785,  860,  87Q 
Deutsch,  107  App.  Div.  192 , 322,  743 


XIV  TABLE    OF   CASES 

PAGE 

Devlin  v.  Greenwich  Bank,  125  N.  Y.  756 702 

De  Wolff,  N.  Y.  Law  Journal,  February  24, 1913 110 

Didion,  54  Misc.  201 740,  817 

Dimon,  82  App.  Div.  107 131,  214,  257,  863 

Dingman,  66  App.  Div.  228.  .592,  602,  633,  634,  684,  741,  762,  835 

Doane,  N.  Y.  Law  Journal,  March  12,  1903 367 

Dobson,  73  Misc.  170 36,  38,  256,  259,  341,  698 

Dormitzer,  N.  Y.  Law  Journal,  February  6,  1913 . .  129,  132,  379,  584, 

606,  851 

Dovale  v.  Ackerman,  11  Misc.  248 855 

Dows,  167  N.  Y.  227.  .33,  186,  189,  200,  204,  248,  276,  282,  287,  307, 
309,  374,  642,  682,  769,  770,  779,  818,  822 

Dreyfous,  18  N.  Y.  Supp.  767 3,  585,  696,  765,  809,  888 

Dudley,  N.  Y.  Law  Journal,  March  4,  1913 853 

Duell  v.  Glynn,  191  N.  Y.  357 353,  739,  850 

Dun,  39  Misc.  616 ., 708 

Dun,  40  Misc.  509 271,  278,  708 

Dunham  v.  City  Trust  Co.,  193  N.  Y.  642 135,  206,  356,  866 

Durfee,  79  Misc.  655 787,  789 

Duryea,  128  App.  Div.  205 46,  163,  177,  339,  584,  670,  888 

Dusenberry,  2  State  Department  Rep.  501.  .119,  134,  268,  274,  301, 

311,  378,  720,  731,  752,  765 
Dwight,  149  App.  Div.  912.  .37,  54,  179,  270,  336,  362,  403,  872,  875 

E 

Earle,  74  App.  Div.  458 396,  599,  633,  878 

Eaton,  E.  S.,  55  Misc.  472 225,  275,  633,  653,  717,  808 

Eaton,  J.  W.,  79  Misc.  69 47,  402,  808 

Ebeling  v.  Ebeling,  61  Misc.  537 585 

Edgerton,  158  N.  Y.  671.  .125,  137,  199,  227,  370,  589,  644,  705,  734, 

849,  866 

Edson,  159  N.  Y.  568.  .38,  230,  353,  640,  643,  697,  721,  732,  832,  847, 

889 

Edwards,  146  N.  Y.  380 194,  608,  637,  644,  699 

Eldridge,  29  Misc.  734 189,  203,  209,  852 

Electro-Tint  Eng.  Co.  v.  Am.  Handkerchief  Co.,  130  App.  Div. 

564 730 

Elletson,  75  Misc.  582 47,  808 

Elting,  78  Misc.  692 110,  182,  332,  351,  737 

Ely,  R.  S.,  157  App.  Div.  658 3,  818,  831 

Ely,  Smith,  N.  Y.  Law  Journal,  March  6,  1912.  .229,  233,  347,  403, 868 
Embury,  154  N.  Y.  746.  .162,  166,  172,  175,  205,  222,  266,  333,  601, 

745,  783,  849,  850 
Eno,  N.  Y.  Law  Journal,  April  24,  1913. .  347,  820 


TABLE    OF   CASES  XV 

PAGE 

Enston,  113  N.  Y.  174.  .134,  147,  163,  165,  171,  222,  235,  601,  603, 

605,  670,  677,  734,  745,  811,  836 

Everett,  3  State  Department  Reports,  450 383,  884 

Eyre  v.  Jacobs,  14  Gratt.  422 161 

F 

Fairchild  v.  Fairchild,  64  N.  Y.  471 753 

Farrell,  N.  Y.  Law  Journal,  Januarys,  1912 247,  606,  797 

Farrelly  v.  Emigrant  Ind.  Savings  Bank,  92  App.  529 791 

Fay,  25  Misc.  468 110,  182,  332,  351,  717,  737 

Fayerweather,  143  N.  Y.  114 186,  210,  671,  677,  723,  836 

Fearing,  200  N.  Y.  340.  .205,  206,  235,  251,  267,  283,  284,  302,  335, 
336,  373,  375,  377,  601,  604,  610,  745,  779,  780,  782 

Field,  Osgood,  36  Misc.  279 285,  771 

Field,  S.  I.,  147  App.  Div.  927 368,  676,  686,  889 

First  Nat.  Bank  v.  Nat.  Broadway  Bank,  156  N.  Y.  459 729 

Fisch,  34  Misc.  146 95,  163,  178,  583,  584,  607 

Fisher,  96  App.  Div.  133 189,  265,  809,  811 

Fitch,  160  N.  Y.  87.  .137,  205,  223,  231,  267,  585,  601,  633,  734,  745, 

783,  848 

Flagg  v.  Bradford,  181  Mass.  315 291 

Forman  v.  Von  Pusbau,  126  App.  629 756 

Francis,  H.  M.,  N.  Y.  Law  Journal,  August  12,  1913.  .68,  111,  605, 

703,  749 
Francis,  H.  M.,  N.  Y.  Law  Journal,  November  26, 1913.  .747,  833,  886 

Francis,  L.  M.,  189  N.  Y.  554 345,  676,  686,  734 

Frazer,  92  N.  Y.  239 132,  676,  858 

Frazier,  N.  Y.  Law  Journal,  March  28,  1912.  .227,  251,  283,  336,  375, 

778,  780 

Freund,  202  N.  Y.  556 101,  378,  662,  851 

Friedlander,  N.  Y.  Law  Journal,  March  8,  1911 117,  ISO 

Froelich,  N.  Y.  Law  Journal,  April  30, 1913 86,  622,  854 

Fuller,  62  App.  Div.  428 85,  203,  654,  848,  849 

Fulton,  30  Misc.  70 884 

G 

Gannon  v.  McGuire,  160  N.  Y.  476. 701,  799 

Gans,  N.  Y.  Law  Journal,  April  13,  1912.  .122,  253,  270,  301,  835, 

862,  875 

Garland,  88  App.  Div.  380 189,  265,  809 

Gegan  v.  Union  Trust  Co.,  198  N.  Y.  541 702,  793 

Gibbes,  J.  S.,  176  N.  Y.  565.  .166,  172,  193,  205,  207,  208,  267,  283, 

403,  603,  745 
Gibbs,  W.  W.,  60  Misc.  645 267,  332,  351,  591,  737,  787 


. 


Xvi  TABLE    OF   CASES 

PAGE 

Gibson,  157  N.  Y.  680 199,  226,  634,  653,  818 

Gihon,  169  N.  Y.  443.  .33,  126,  128,  179,  214,  225,  256,  279,  323,  634, 

656,  694,  732,  733,  757,  851,  852,  875 

Glendinning,  171  N.  Y.  684 868,  277,  744,  745,  841 

Glennan  v.  Rochester  Trust,  etc.,  Co.,  136  N.  Y.  Supp.  747 858 

Gordon,  186  N.  Y.  471.182,  208,  267,  311,  331,  351,  611,  737,  745 
Gould,  156  N.  Y.  423.  .38,  115, 125,  129,  224,  275,  617,  630,  632,  641, 

697,  721,  732,  856,  857,  889 

Granfield,  79  Misc.  374. .  125, 225, 270, 285,  403,  783, 823, 827, 859, 863 
Grant,  N.  Y.  Law  Journal,  November  14,  1913.  .146,  319,  344,  598, 

833 

Grant,  N.  Y.  Law  Journal,  December  9, 1913 319,  344,  833 

Graves,  L.  S.,  52  Misc.  433 247,  647,  788,  789 

Graves,  N.  F.,  171  N.  Y.  40 260,  609,  685,  688,  836 

Great  Western  Telegraph  Co.  v.  Purdy,  162  U.  S.  329 313 

Green,  M.  E.,  144  App.  Div.  232 36,  376,  655,  718,  719 

Green,  S.  H.,  153  N.  Y.  223.  .36, 216, 254,  602,  664, 797, 804, 810,  835, 

868,  871,  872 

Green  v.  Holloway,  101  Mass.  248 165 

Grosvenor,  193  N.  Y.  652.  .147,  148,  214,  274,  359,  367,  633,  663,  745 
Guggenheim,  189  N.  Y.  561 270,  272,  347,  609,  748,  822 

H 

Haddock  v.  Haddock,  201  U.  S.  562 319 

Haggerty,  194  N.  Y.  550 262,  307,  309,  365,  679,  776 

Haight,  152  App.  Div.  228. .  122, 199,  235,  243,  262,  290,  304,  307,  351, 

365,  372,  679,  776,  818,  872 

Hall,  J.  B.,  36  Misc.  618 271,  295,  392,  586,  736 

Hall,  S.,  88  Hun,  68 809 

Hallenbeck,  195  N.  Y.  143 888 

Halligan,  82  Misc.  30 36,  787,  798 

Hallock,  42  Misc.  473 189,  809 

Hamilton,  H.  A.,  41  Misc.  268 880 

Hamilton,  R.  R.,  148  N.  Y.  310 2,  33,  193,  200,  225,  685,  742 

Hamlin  v.  Smith,  72  App.  Div.  601 132 

Hanford,  186  N.  Y.  547 332 

Hanley  v.  Donoghue,  116  U.  S.  1 316 

Harbeck,  161  N.  Y.  211 .  .54, 163, 166, 175, 179, 216, 234, 670,  734,  769 

Hardner,  124  App.  Div.  77 743,  843 

Harriott,  N.  Y.  Law  Journal,  March  1,  1913 619,  746,  800 

Harris  v.  Murray,  28  N.  Y.  547 756 

Harteau,  204  N.  Y.  292 594 

Hartman,  N.  Y.  Law  Journal,  Octobers,  1913 224,  632,  858 

Hatch  v.  Reardon,  204  U.  S.  152. ...  .  361 


TABLE    OF    CASES  XV11 

PAGE 

Hathaway,  27  Misc.  474 139,  633,  654,  684,  746 

Havemeyer,  32  Misc.  416 360,  766,  850 

Hawes,  N.  Y.  Law  Journal,  April  8,  1913 304,  874 

Head,  N.  Y.  Law  Journal,  December  22, 1911 879 

Heiser,  N.  Y.  Law  Journal,  July  19,  1913.  .39,  218,  256,  259,  684,  741, 

788,  789,  794,  804 

Hellman,  174  N.  Y.  254. 2,  182,  268,  276,  708,  744,  841 

Hemmerich  v.  Union  Dime  Sav.  Ins.,  205  N.  Y.  366 796,  799 

Henderson,  157  N.  Y.  423 396 

Hennessey,  157  App.  Div.  136 .632,  858 

Hess,  187  N.  Y.  554.  .218,  228,  236,  247,  255,  259,  289,  840,  643,  648, 

705,  716 

Hewitt,  181  N.  Y.  547 103,  301,  375,  582,  601,  727,  745 

Higgins,  55  Misc.  175 253,  345,  608,  686,  717,  734 

Hillman,  116  App.  Div.  186 604,  746 

Hitchins,  181  N.  Y.  553 175,  186,  199,  216,  804,  818 

Hoag  v.  Wright,  174  N.  Y.  36 632,  858 

Hoffman,  C.  F.,  201  N.  Y.  247 95,  836 

Hoffman,  E.  A.,  42  Misc.  90 102,  379,  634,  662,  851 

Hoffman,  E.  S.,  143  N.  Y.  327.  .33,  164,  179,  186,  189,  251,  264,  272, 

809,  829,  857 

Hogg,  156  App.  Div.  301 706,  808,  829 

Holly  v.  Gibbons,  176  N.  Y.  520 131 

Holt,  N.  Y.  Law  Journal,  March  16,  1912 808 

Hoople,  179  N.  Y.  308 240,  279,  290,  400,  738,  816,  843,  884 

Horn,  39  Misc.  133 332,  351,  737,  746 

Horstmann  v.  Flege,  172  N.  Y.  384 672,  676 

Hosack,  39  Misc.  130 347,  820 

Houdayer,  150  N.  Y.  37.  .172,  207,  300,  324,  334,  593,  610,  642,  877 
Howe,  E.  L.,  176  N.  Y.  570. .  163,  243,  270, 273, 284, 382, 403,  771,  774, 

781,  823,  860 

Howe,  Mary,  112  N.  Y.  100 164,  809,  836 

Hoyt,  44  Misc.  76 295,  652,  761,  824 

Hubbard,  21  Misc.  566 138,  223,  232,  601,  745,  762,  849,  850 

Huber,  86  App.  Div.  458.  .121,  127,  192,  225,  253,  270,  273,  588,  610, 

736,  822,  862 

Hughes  ».  Golden,  44  Misc.  128 761,  812 

Hull,  W.  J.,  109  App.  Div.  248 239,  591,  599 

Hull,  W.  J.,  186  N.  Y.  586.  .  .179,  251,  307,  309,  335,  778,  779,  873 
Huntington,  168  N.  Y.  399.. .  .164,  225,  253,  263,  609,  634,  653,  685 

Hurcomb,  36  Misc.  755 360,  766 

Hurst,  111  App.  Div.  460. 128 

Hutchinson,  105  App.  Div.  487 295,  392,  588,  745,  836 

Hynes  v.  McDermot,  82  N.  Y.  41 680 


XYlil  TABLE   OF   CASES 

I  PAGE 

Irish,  28  Misc.  647 656,  694 

Irwin,  36  Misc.  277 347,  819,  831 

Isham  v.  N.  Y.  Assn.  for  the  Poor,  177  N.  Y.  218.  .44,  165,  251,  283, 
285,  323,  590,  632,  652,  732,  759,  770,  775,  835,  847 


Jackson  v.  Tailer,  184  N.  Y.  603.  .257,  286,  888,  732,  758,  759,  835, 

847 

James,  144  N.  Y.  6.  .152,  166,  172,  179,  184,  198,  348,  376,  681,  695, 

745,  845 

Jay  v.  Kirkpatrick,  26  Misc.  550 730,  830 

Johnson,  6  Demarest,  146  ,. 292 

Johnson,  37  Misc.  542 591,  605,  617 

Johnson  v.  Roberts,  159  N.  Y.  70 715 

Johnston  v.  Spicer,  107  N.  Y.  185 288 

Jones,  George,  172  N.  Y.  575.  .112,  2W,  295,  300,  371,  390,  392,  395, 

586,  587,  621,  706,  728,  736 

Jones,  John  D.,  54  Misc.  202.  .81,  211,  221,  240,  594,  697,  831,  842, 

843 

Jones,  S.  N.,  65  Misc.  121 96,  341,  663,  683,  700,  854,  877 

Joseph  v.  Herzig,  198  N.  Y.  456 755 

Jourdan,  206  N.  Y.  653.  .53,  164,  166,  169, 189,  265,  345, 386,  397,  400, 

670,  671,  717,  786,  808 


Kahn,  N.  Y.  Law  Journal,  March  16,  1912 108,  118 

Kaupper,  141  App.  Div.  54 795,  805 

Keahon,  60  Misc.  508 271,  621,  708,  710 

Keefe,  164  N.  Y.  352 321 

Keeney,  194  N.  Y.  281 .  .36, 37, 54,  97,  218,  229,  234,  235,  247,  255,  259, 
270,  335,  360,  385,  391,  403,  648,  664,  696,  697,  699,  804,  820,  832, 

867,  871 

Keeney  v.  New  York,  222  U.  S.  525 Vide  Keeney 

Kelly,  29  Misc.  169 214,  227,  591,  599,  602,  816,  830,  841,  848 

Kelly  v.  Beers,  194  N.  Y.  49 791,  792,  799,  805 

Kelsey  v.  Church,  112  App.  Div.  408.  .214,  595,  597,  633,  639,  739,  765, 

849 

Kemp,  151  N.  Y.  619 81,  810,  657,  841 

Kennedy,  David,  113  App.  Div.  4.  .110,  111,  166,  180,  335,  595,  597, 

605,  632,  851,  684,  749,  853 

Kennedy,  George  N.,  93  App.  Div.  27.  .203,  270,  295,  347,  364,  500, 

820,  823,  800 

Kennedy,  J.  S.,  N.  Y.  Law  Journal,  March  8, 1911 . .  /  /.-I,  615,  617,  628, 

630,  655,  720,  729 


TABLE    OF   CASES  xix 

PAGE 

Kennedy,  Sophia  H.,  20  Misc.  531 129,  179,  257,  656,  730,  851 

Kernochan,  104  N.  Y.  618 594 

Keys,  N.  Y.  Law  Journal,  March  15,  1912 672 

Kidd,  188  N.  Y.  274.  .38,  251,  262,  283,  289,  304,  309,  341,  589,  600, 

635,  640,  641,  652,  721,  832 

Kimball,  155  N.  Y.  62 319 

Kimbel  v.  Kimbel,  14  App.  Div.  570 672,  673 

Kimberly,  Charlotte,  27  App.  Div.  470 162,  685 

Kimberly,  David  F.,  150  N.  Y.  90 55,  808,  599,  852 

King,  200  N.  Y.  189 55 

King,  H.  W,,  172  N.  Y.  616 147,  273,  360,  663,  745,  756 

Kings  County  Trust  Co.,  69  Misc.  531 128 

Kip,  N.  Y.  Law  Journal,  March  28,  1912 47,  400,  808 

Kissel,  142  App.  Div.  934.  .34,  179,  235,  251,  283,  285,  336,  375,  779, 

780,  788 

Kitching  v.  Shear,  26  Misc.  436 101,  189,  369,  399,  735 

Klauber,  N.  Y.  Law  Journal,  May  17,  1913 712 

Kline,  65  Misc.  446 788,  789,  792,  799,  804 

Knibbs,  108  App.  Div.  134 858 

Knoedler,  140  N.  Y.  377 8,  110,  181,  215,  332,  351,  736,  744 

Knowlton  v.  Moore,  178  U.  S.  41 257,  378 

Konvalinka  v.  Schlegel,  104  N.  Y.  125 672,  673,  674,  676 

Kucielski,  144  App.  Div.  100 253,  652,  686 

L 

Lane,  E.  D.  G.,  157  App.  Div.  694.  .53,  55,  285, 384,  520,  585,  696,  771, 

809,  888 

Lane,  John  G.,  39  Misc.  522 605,  742 

Langdon,  153  N.  Y.  6 175,  186,  199,  216,  305,  769 

Lansing,  Janet  S.,  182  N.  Y.  238. .  122, 216, 235, 251, 283, 307, 328, 342, 
350,  354,  364,  366,  372,  679,  769,  776,  818 

Lansing,  Jane  E.,  31  Misc.  148 180,  591,  596,  862 

Law,  56  App.  Div.  454 318 

Lawrence,  Joseph  J.,  96  App.  Div.  29 221,  832 

Lawrence,  S.  D.,  N.  Y.  Law  Journal,  February  15,  1913.  .68,  111,  230, 
317,  339,  353,  636,  640,  701,  729,  730,  751 

Lawrence  Mfg.  Co.  v.  Janesville  Mills,  138  U.  S.  552 319 

League  v.  Texas,  184  U.  S.  156 324 

Le  Brun,  39  Misc.  516 285 

Leeds,  N.  Y.  Law  Journal,  April  23, 1913 78,  776,  868,  866 

Leggett,  N.  Y.  Law  Journal,  January  13,  191 1 107 

Lennox,  N.  Y.  Law  Journal,  June  11,  1908 662 

Leopold,  35  Misc.  369. 147,  166,  172,  192,  746 

Leuff,  1  St.  Dept.  Reports,  567 383,  828 


XX  TABLE   OF   CASES 

PAGE 

Lewis,  194  N.  Y.  550 307,  309,  351,  884,  366,  372,  679,  776 

Lewis  v.  Smith,  9  N.  Y.  502 672,  673 

Lewis  v.  State  of  N.  Y.,  96  N.  Y.  71 291 

Libolt,  102  App.  Div.  29 634,  888 

Lind,  196  N.  Y.  570 47,  369,  744,  807,  860,  876 

Linkletter,  134  App.  Div.  309 844 

Liss,  39  Misc.  123 102,  184,  257,  370,  379,  608,  662,  851 

Litchfield,  N.  Y.  Law  Journal,  July  2,  1913 383,  772,  886 

Livingston,  1  App.  Div.  568 193,  204,  210,  226,  659,  811 

Locke  v.  State  of  N.  Y.,  140  N.  Y.  480 291 

Loewi,  75  Misc.  57. .  .111,  203,  218,  256,  259,  341,  607,  703,  749,  810 

Lord,  186  N.  Y.  549.  .54,  162,  175,  192,  208,  223,  232,  253,  267,  301, 

332,  375,  610,  632,  651,  733,  745,  783,  821,  863 

Loster,  N.  Y.  Law  Journal,  July  29,  1913 704 

Louisville  v.  Portsmouth  Sav.  Bank,  104  U.  S.  469 809 

Lowndes,  60  Misc.  506.  .79,  139,  307,  365,  633,  770,  771,  782,  850,  863 

Lowry,  89  App.  Div.  226 398,  595,  633,  812,  884,  885 

L.  S.  &  M.  S.  R.  R.  Co.  v.  Roach,  80  N.  Y.  339 781 

Ludlow,  4  Misc.  594 129 

Lynn,  34  Misc.  681 599,  813 

Lyon,  Mary  J.,  144  App.  Div.  104 693 


Me 

McAvoy,  112  App.  Div.  377 740,  817 

McCartin,  N.  Y.  Law  Journal,  December  5,  1913.  .176,  193,  227,  261, 

380,  602,  608,  688 

McCormick,  206  N.  Y.  100 181,  264,  368,  385,  676,  686,  740 

McEwan,  51  Misc.  455 153,  193,  376,  681,  746 

McFarlane  v.  McFarlane,  82  Hun,  238 753 

McGee,  Catherine,  N.  Y.  Law  Journal,  February  7, 1913 . .  633, 762, 843 

McGee,  Catherine,  N.  Y.  Law  Journal,  May  3,  1912 665 

McKeon,  X.  Y.  Law  Journal,  June  8,  1912.  ..230,  236,  247,  341,  647 

McLaren  v.  McMartin,  36  N.  Y.  88 131 

McMahon,  28  Misc.  697 824 

McMurray,  96  App.  Div.  128 95,  189,  265,  322,  743,  809 

McPherson,  104  N.  Y.  306 2,78,  161,  585,  641,  727,  746 


M 

Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283.  .249,  282,  779, 

873 

Mahlstedt,  171  N.  Y.  652 285,  594,  632,  647,  650 

Majot,  199  N.  Y.  29 289,  370,  589,  635,  670 


TABLE    OF   CASES  XXI 

PAGE 

MalcoUnson,  N.  Y.  Law  Journal,  June  20,  1912 395,  615,  619 

Manice  v.  Manice,  43  N.  Y.  370 269 

Manning,  169  N.  Y.  449 112,  203,  258,  590,  732,  867,  890 

Maresi,  74  App.  Div.  76.  .102,  204,  214,  226,  257,  295,  371,  379,  588, 

659,  662,  736,  851,  860 

Marks,  40  Misc.  507 214,  339,  636,  638 

Maspn,  Anna,  69  Misc.  280 169,  189,  265,  345,  808 

Mason,  Sarah  M.,  120  App.  Div.  738 Vide  Naylor 

Masury,  159  N.  Y.  532 36,  199,  288,  233,  360,  648,  868 

Mather,  179  N.  Y.  526 896,  632,  679,  729,  884 

Matthews  v.  Brooklyn  Savings  Bank,  208  N.  Y.  508 795,  799 

Maverick,  198  N.  Y.  618 125,  225,  228,  369,  608,  634,  866 

Menagh  v.  Whitehall,  52  N.  Y.  146 121 

Mergentime,  195  N.  Y.  572.  .166,  181,  188,  235,  253,  263,  345,  868, 

670,  676,  686,  740,  842 

Merriam,  141  N.  Y.  479.  .2, 112,  116,  164,  176,  179, 183,  193,  201,  206, 

282,  360,  641,  686,  694,  732,  844,  876 
Merritt,  155  App.  Div.  228.  .44,  46,  276,  297,  299,  339,  399,  638,  669, 

679,  731,  736,  758 

Meyer,  M.  R.,  209  N.  Y.  386.  .100,  257,  369,  392,  397,  582,  595,  633, 

634,  684,  735,  762,  763,  812,  815,  884 

Meyer,  W.,  83  App.  Div.  381 . .  189, 199, 203, 221, 262, 347, 403, 817, 820 
Miller,  C.,  77  App.  Div.  473.  .38, 166,  171,  218,  233,  236,  251,  255,  589, 

605,  670 
Miller,  Mary  E.,  110  N.  Y.  216.  .54,  134,  162,  177,  234,  584,  734,  836 

Mills,  177  N.  Y.  562 204,  286,  682 

Millward,  6  Misc.  425 129,  370 

Milner,  76  Hun,  328 821 

Mitchell,  N.  Y.  Law  Journal,  March  9,  1912 100 

Mitchill,  N.  Y.  Law  Journal,  November  22,  1913.  .122,  351,  354,  365, 

366,  372,  680,  777 

Mock,  113  App.  Div.  913 265 

Moehring,  154  N.  Y.  423 776 

Moench,  39  Misc.  480 632,  735,  837,  843 

Monteith,  27  Misc.  163 885 

Morgan,  Annie  T.,  36  Misc.  753 214,  863,  880 

Morgan,  George,  150  N.  Y.  35 135,  206,  284,  300,  603,  745 

Morgan  v.  Cowie,  49  App.  Div.  612.  .94,  203,  240,  633,  729,  732,  880 

Morgan  v.  Warner,  162  N.  Y.  612.  .112,  210,  237,  259,  591,  599,  633, 

634,  641,  732,  786,  814,  842,  847,  854,  890 

Moses,  138  App.  Div.  525.  .83,  201,  253,  264,  676,  682,  686,  691,  890 

Mullon,  74  Hun,  358 708 

Murphy,  157  N.  Y.  679 226,  659 

Mutual  Life  Ins.  Co.  ».  McGrew,  188  U.  S.  291 313 

Mutual  Life  Insurance  Co.  v.  Nicholas,  144  App.  Div.  95 846 


XXII  TABLE    OF   CASES 

PAGE 

Myers,  L.  M.,  129  N.  Y.  Supp.  194 791 

Myers,  S.,  N.  Y.  Law  Journal,  November  22,  1913.  .286,  323,  634,  759, 

835 
N 

Naylor,  189  N.  Y.  556.  .54,  221,  345,  403,  785,  817,  820,  821,  831 
Neustadter,  N.  Y.  Law  Journal,  August  16,  1913.  .42,  128,  261,  380, 

686,'  688 

Newcomb,  J.  L.,  172  N.  Y.  608 116,  271,  745,  845 

Newcomb,  J.  L.,  35  Misc.  589 862 

Niles,  N.  Y.  Law  Journal,  January  5,  1912 106,  134,  808,  836 

Niven,  29  Misc.  550 225,  240,  279,  591,  814,  885 

Norton  v.  Shelby  County,  118  U.  S.  425 290 

O 

0 'Berry,  179  N.  Y.  285 279,  289,  291,  332,  726,  816,  818,  878 

O'Donohue,  44  App.  Div.  186 73,  180,  214,  596,  849 

Offerman,  25  App.  Div.  94 101,  204,  659 

Ogsbury,  7  App.  Div.  71 868 

Or  v.  Gilman,  183  U.  S.  278 Vide  Dmvs 

Osborne,  153  App.  Div.  312 594 

Ottman  ».  Hoffman,  7  Misc.  714 809 

P 

Page,  John,  39  Misc.  220 634 

Page,  Mary  M.,  N.  Y.  Law  Journal,  April  13,  1912. .  135,  267,  301, 311, 

331,  610 

Palmer,  John,  117  App.  Div.  360.  .196,  199,  228,  256,  259,  605,  650, 

683,  699,  716,  798 

Palmer,  Potter,  183  N.  Y.  238.  .116,  135,  320,  331,  356,  593,  670,  845 
Palmer,  S.  A.  L.,  158  N.  Y.  669.. 41,  193,  826,  602,  609,  685,  780 

Parmenter  v.  State  of  N.  Y.,  135  N.  Y.  154 291 

Paxsons,  John  D.,  117  App.  Div.  321 . .  110,  182,  332,  351,  737,  751,  766 

Patterson,  204  N.  Y.  677 218,  229,  362,  384,  868 

Pearsall,  N.  Y.  Law  Journal,  February  2,  1912.  .639,  663,  666,  861 

Peck,  149  App.  Div.  912 606,  884 

Pell,  171  N.  Y.  48. .  179, 189,  200,  216,  226, 261,  278,  289,  308,  342,  366, 

642,  818,  836 

Penfold,  81  Misc.  598. .  129,  199,  203,  251,  257,  267,  656,  670,  683,  694, 

758,  851 

Pennoyer  ».  Neff,  95  U.  S.  714 319 

People  v.  Dennison,  84  N.  Y.  272 291 

People  v.  Mercantile  Safe  Deposit  Co.,  158  App.  Div.  000.  .71,  359, 

754,  837,  866 


TABLE    OF   CASES  XX111 

PAGE 

People  v.  Prout,  117  N.  Y.  650 166,  384,  722 

People  v.  Roberts,  159  N.  Y.  70 708 

People  ex  rel.  Lemmon  v.  Feitner,  167  N.  Y.  1 277 

People  ex  rel.  Lown  v.  Cook,  209  N.  Y.  mem .  .  166,  167,  402,  640,  654, 

721,  757,  760,  763,  815 

People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35.  .72,  209,  353,  596, 598, 

807,  853 

People  ex  rel.  McNeile  v.  Glynn,  128  App.  Div.  257 72,  596,  640 

People  ex  rel.  N.  Y.  C.  &  H.  R.  R.  R.  Co.  v.  Knight,  173  N.  Y.  255 .  320 

People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402. .  122,  216,  235,  243,  283, 

307,  309,  350,  354,  365,  366,  372,  403,  679,  683,  739,  760,  763,  776, 

781 
People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475. 184,  320,  876 

Peters,  69  App.  Div.  465 599,  848,  889 

Pettit,  171  N.  Y.  654 54,  134,  223,  266,  601,  745,  836,  850 

Philadelphia  v.  Masonic  Home,  160  Penn.  St.  572 687 

Phipps,  143  N.  Y.  641 172,  190,  300,  733,  745,  755 

Pierce,  132  App.  Div.  465 790,  797,  798 

Pitou,  79  Misc.  384 36,  728,  741,  788,  789,  792,  795,  804 

Plummer,  161  N.  Y.  631.  .2,  206,  215,  285,  240,  284,  603,  642,  876 

Plummer  v.  Coler,  178  U.  S.  115 Vide  Plummer 

Porter,  F.  D.,  60  Misc.  504 632,  858 

Porter,  Josephine  E.  S.,  148  App.  Div.  896.  .147,  193,  274,  349,  360, 
366,  367,  376,  643,  662,  663,  681,  746,  756,  884 

Post,  5  App.  Div.  113 81,  211,  842 

Potter,  Martha,  199  N.  Y.  561 871,  736,  847 

Potter,  Mary  Louisa,  51  App.  Div.  212 243 

Prall,  78  App.  Div.  301 686 

Preston,  75  App.  Div.  250 205,  284,  604,  745 

Preston  v.  Fitch,  137  N.  Y.  41 121 

Price,  62  Misc.  149 35,  247,  265,  605,  645 

Price-McCormick  Co.,  69  App.  Div.  37 756 

Prime,  136  N.  Y.  347 164,  175,  193,  609,  685,  692,  695,  836 

Probst,  40  Misc.  431 208,  267,  746,  757 

Proctor,  41  Misc.  79 115,  256,  629,  630,  656 

Prout,  19  N.  Y.  St.  Rep.  318 762 

Pulitzer,  N.  Y.  Law  Journal,  December  10, 1912 624,  707,  714 

Pullman,  46  App.  Div.  574. .  137, 189,  205,  214,  274,  360,  735,  745,  767, 

768,  849 
Purdy,  24  Misc.  301 125,  179,  214,  215,  653,  876 

Q 

Quinn,  N.  Y.  Law  Journal,  November  25,  1911 801,  853 


\.\iv  TABLE    OF   CASES 

•D 

PAGE 

Railroad  v.  Alabama,  101  U.  S.  832 291 

Railroad  Co.  v.  Tennessee,  101  U.  S.  337 291 

Raleigh,  75  Misc.  55 846 

Ramsdill,  190  N.  Y.  492 150,  153,  179,  193,  348,  376,  681 

Ray,  13  Misc.  480 46,  718 

Read,  204  N.  Y.  672 167,  259,  384,  722 

Rees,  208  N.  Y.  590 327,  392,  614,  712,  786 

Revere,  N.  Y.  Law  Journal,  January  28,  1913 147,  192 

Reynolds  v.  Stockton,  27  Abb.  New  Cases,  112 319 

Rheinhart  v.  Rheinhart,  134  App.  Div.  440 755 

Rhoads,  190  N.  Y.  525 182,  331,  351,  737,  745,  831,  845 

Rice,  56  App.  Div.  253 131,  203,  214,  814,  863 

Richardson,  2  Story,  571 809 

Riemann,  42  Misc.  648 38,  641,  671,  721 

Ripley,  192  N.  Y.  536. .  122,  216,  235,  243,  262,  307,  309,  350,  353,  365, 

366,  372,  679,  763,  776,  778 

Robbins  v.  McClure,  100  N.  Y.  328 719 

Robertsons  De  Brulatour,  188  N.  Y.  301 594 

Robinson,  37  Misc.  336 128 

Robinson,  80  Misc.  458 253,  261,  264,  380,  686,  690 

Roebuck,  79  Misc.  589 46,  222,  339,  719,  738 

Roessle  v.  Roessle,  81  Misc.  558 671 

Rogers,  172  N.  Y.  617.  .38,  44,  214,  225,  243,  251,  274,  641,  697,  721, 

732,  771,  781,  889 

Rogers  v.  Adriatic  Fire  Ins.  Co.,  148  N.  Y.  34 319 

Romaine,  127  N.  Y.  80. .  147, 162, 166, 171, 191, 222, 301,  601, 741, 745, 

755,  811,  844 

Ronalds,  129  App.  Div.  900 365,  366 

Roosevelt,  143  N.  Y.  120.  .186,  188,  292,  392,  403,  588,  774,  817,  822 

Rosenbaum,  John  H.,  N.  Y.  Law  Journal,  August  7,  1913.  .206,  253, 

301,  390,  730 

Rosenberg,  Surr.  Dec.  1908,  p.  265 710 

Rothschild,  63  Misc.  615 129 

Runcie,  36  Misc.  607 251,  822 

Rundell  ».  Lakey,  40  N.  Y.  513 851 

Russell,  168  N.  Y.  178 719 

Russell  v.  McCall,  141  N.  Y.  437 121 

S 

Sanford,  66  Misc.  395 126,  214,  225,  257 

Saunders,  156  App.  Div.  891 . .  127,  129,  201,  225,  345,  368,  380,  676, 

682,  734,  742 

Schermerhorn,  Edmund  H.,  50  Misc.  233.  .205,  206,  207,  215, 284,  603, 

876 


TABLE    OF   CASES  XXV 

PAGE 

Schermerhorn,  E.  H.,  38  App.  Div.  350 884 

Schermerhorn,  William  C.,  N.  Y.  Law  Journal,  June  26, 1913.  .36,  218, 

230,  234,  869 

Schmidt,  39  Misc.  77 83,  595,  639,  747,  850 

Scholey  ».  Rew,  23  Wall.  331 161 

Schroeder,  N.  Y.  Law  Journal,  March  20,  1912 789 

Schumacher,  N.  Y.  Law  Journal,  July  22, 1913 344,  834 

Schwarz,  209  N.  Y.  mem.  .47,  164,  189,  265,  387,  399,  716,  786,  808 
Scott,  208  N.  Y.  602.  .169,  240,  279,  291,  329,  353,  386,  396,  400,  683, 

808,  878,  881 

Scrimgeour,  175  N.  Y.  507.  .240,  262,  278,  306,  328,  397,  633,  642,  878, 

879 

Scudder  v.  Comptroller,  175  U.  S.  32 Vide  Houdayer 

Seaman,  Hannah  H.,  N.  Y.  Law  Journal,  December  5,  1913.  .336,  375, 

780 
Seaman,  J.  B.,  147  N.  Y.  69.  .37,  179, 186, 196,  217,  226,  269,  305,  403, 

608,  818,  836 
Seaver,  63  App.  Div.  283.  .57,  275,  633,  771,  775,  781,  809,  832,  849 

Secor  v.  Tradesmen's  National  Bank,  92  App.  Div.  294 121 

Seligman,  N.  Y.  Law  Journal,  July  19,  1913 368,  677 

Seymour,  George  F.,  144  App.  Div.  151 583,  591,  632 

Sharer,  36  Misc.  502 256,  663,  700,  797,  857,  877 

Sherar,  25  Misc.  138 632,  879 

Sheridan  v.  Tucker,  145  App.  Div.  145 846 

Sherman,  153  N.  Y.  1 179,  206,  814,  235,  291,  876 

Sherwell,  125  N.  Y.  376 168,  745,  809 

Shields,  68  Misc.  264 128,  129,  257,  673,  875 

Sidney,  2  State  Department  Rep.  505 295,  392,  588 

Silkman,  121  App.  Div.  202 708,  709,  710,  713 

Silliman,  175  N.  Y.  513 128,  279,  306,  397,  633,  634,  875,  879 

Simmons,  N.  Y.  Law  Journal,  June  14,  1912 383,  829 

Singer,  N.  Y.  Law  Journal,  November  22,  1912 128 

Skinner,  106  App.  Div.  217. .  131,  214,  255,  259,  610,  722,  760,  797, 816, 

863,  868 

Slater  v.  Slater,  175  N.  Y.  143 714,  716,  753 

Slee  v.  Kings  Co.  Savings  Ins.,  78  App.  534 791 

Sloane,  154  N.  Y.  109.  .3, 55, 134,  203, 218, 391,  403,  739,  774, 808,  817, 

819,  836 

Smith,  14  Misc.  169 732 

Smith,  A.  B.,  153  N.  Y.  124 858 

Smith,  Elizabeth  H.,  40  App.  Div.  480 239,  814 

Smith,  Elizabeth  H.,  71  App.  Div.  602.  .327,  395,  608,  616,  618,  814 

Smith,  Jonathan,  150  App.  Div.  805.  .37,  179,  184,  199,  215,  226,  235, 

243,  251,  262,  270,  273,  283,  290,  304,  305,  309,  329,  350,  354,  365, 

366,  372,  651,  818,  836,  875,  887 


XXVI  TABLE    OF   CASES 

PAGE 

Smith,  Julia  A.,  77  Hun,  134 692 

Smith,  W.  A.,  80  Misc.  140. .  181,  257,  283,  285,  286, 323, 383,  732,  759, 

771,  77,5,  835 

Smith  v.  Century  Trust  Co.,  154  N.  Y.  333 319 

Smith  v.  Reeves,  178  U.  S.  436 291 

Sondheim,  69  App.  Div.  5 72,  692,  596,  747,  832,  886 

Spaulding,  163  N.  Y.  607.  .35, 38,  200,  226,  228,  229,  233,  244,  288,  G-13, 

648,  708,  798,  818 

Spencer,  193  N.  Y.  613  (190  N.  Y.  517) 122,  307,  309,  340,  776 

Spring,  75  Misc.  586 218,  256,  259,  362,  788,  792,  803 

Starbuck,  201  N.  Y.  531 36,  166,  171,  172,  225,  376,  655,  718 

State  v.  Dorsey,  6  Gill,  388 162 

Stebbins,  52  Misc.  438 38,  166,  236,  788,  789,  792,  843 

Sterry,  N.  Y.  Law  Journal,  April  30,  1912 122,  253,  610,  862 

Stewart,  131  N.  Y  274 167,  172,  243,  305,  384,  670,  722,  76!) 

Stickney,  185  N.  Y.  107 162,  208,  323,  593    643,  877 

Stickney  v.  Kelsey,  209  U.  S.  419. Vide  Stickney 

Stiles,  64  Misc.  658 634.  888 

St.  Louis  v.  Ferry  Co.,  11  Wall.  423 361 

Stone,  B.,  56  Misc.  247 203,  259,  364,  590,  746 

Stone,  G.  C.,  N.  Y.  Law  Journal,  February  18, 1911 854 

Strail,  195  N.  Y.  575 368,  399,  669,  735 

Strang,  117  App.  Div.  796 369,  632,  735,  837,  843 

Straus,  N.  Y.  Law  Journal,  October  9, 1911 121,  752 

Strobel,  5  App.  Div.  621 664,  867 

Stuart,  N.  Y.  Law  Journal,  May  10,  1913.  .54, 122,  189,  221,  243,  285, 

309,  347,  354,  683,  772,  778,  785,  832 

Stuyvesant,  72  Misc.  295 671,  672,  814 

Sutton,  149  N.  Y.  618 101,  203,  226,  250,  287,  659,  682 

Swift,  137  N.  Y.  77.  .37,  97,  162,  166, 169,  172,  175,  176, 178, 191,  196, 
215,  388,  392,  599,  608,  682,  738,  757,  765,  862,  873 

T 

Tax  on  Foreign  Held  Bonds,  15  Wall.  300 361,  .'!7  \ 

Taylor  v.  Brown,  147  U.  S.  640 809 

Texas  &  Pacific  R.  R.  v.  Southern  Ry.,  137  U.  S.  48 319 

Thayer,  193  N.  Y.  430.  .115, 116, 193,  236,  321, 331, 355, 592,  593,  604, 

614,  670,  694,  745,  807,  844,  845 

Thayer  v.  Burr,  201  N.  Y.  155 594 

Thomas,  Cordelia  P.,  39  Misc.  ;36 375,  780 

Thomas,  Peter,  39  Misc.  223 126,  214,  257,  339,  606,  (>:«» 

Thompson,  Harriet  W.,  57  App.  Div.  317 591,  599,  S.V> 

Thompson,  J.  de  W.  H.,  81  Misc.  86 225,  632,  852,  857 

Thorne,  162  N.  Y.  238. .  171,  218,  228,  236,  265,  592,  605,  632,  648,  706 


TABLE    OF   CASES  XXVU 

PAGE 

Thrall,  157  N.  Y.  46 126,  201,  214,  226,  685,  742 

Tiffany,  202  N.  Y.  550.  .34,  56,  206,  267,  271,  375,  377,  610,  741,  745, 

787 
Tilt,  182  N.  Y.  557.  .66,  208, 811, 318,  343,  593,  632,  635,  640,  729,  730, 

745,  835,  877 

Tilt  v.  Kelsey,  207  U.  S.  43 Vide  Tilt 

Title  Guarantee  &  Trust  Co.,  81  Misc.  106 .  .62,  270,  295,  348,  652,  748, 

761,  807,  808 

Tobias  v.  Ketchum,  32  N.  Y.  319 673,  676 

Tompkins,  N.  Y.  Law  Journal,  August  11,  1913 776,  865 

Tompkins  v.  Leary,  134  App.  Div.  114 702 

Totten,  179  N.  Y.  112 796,  798,  800,  803 

Townsend,  153  App.  Div.  85.  .42, 240, 257,  279, 280,  291, 353,  397,  633, 

686,  878,  885 

Tracy,  179  N.  Y.  501 . .  189,  270,  292,  588,  642,  G62,  682,  733,  761,  822, 

824,  859 
Tremberger,  N.  Y.  Law  Journal,  March  7,  1912  and  October  31, 

1913 101,  602,  659,  661,  741 

Tucker,  27  Misc.  616 251,  770,  781 

Tulane,  51  Hun,  213 ' 171 

Turner,  82  Misc.  25  . . .  .101,  285,  371,  384,  656,  730,  771,  812,  848 

U 

Ullmann,  137  N.  Y.  403.  .57, 162, 164, 166, 169, 175, 176, 179, 180, 181, 

598,  599,  643,  728,  807,  831 

United  States  v.  Perkins,  163  U.  S.  625 Vide  Merriam 

U.  S.  Radiator  Co.  v.  New  York,  208  N.  Y.  144 845 

U.  S.  Trust  Co.,  117  App.  Div.  178 796 


Valentine,  N.  Y.  Law  Journal,  March  13,  1913 395,  619,  707 

Valentine,  N.  Y.  Law  Journal,  December  4,  1913.  .604,  622,  739,  786 

Vallance  v.  Bausch,  28  Barb.  633 719 

Van  Antwerp  v.  Linton,  89  Hun,  417 358 

Van  Brocken  v.  Smeallie,  140  N.  Y.  70 753 

Vanderbilt,  Cornelius,  172  N.  Y.  69.  .128,  175,  189,  199,  203,  221,  268, 
271,  284,  285,  293,  295,  347,  348,  382,  595,  600,  642,  652,  761,  822, 

859,  873 

Vanderbilt,  W.  H.,  163  N.  Y.  597.  .122,  175,  235,  240,  642,  651,  769, 

770,  774,  836,  887 

Van  Kleeck,  121  N.  Y.  701 134,  164,  167,  180,  685,  836 

Van  Nest,  N.  Y.  Law  Journal,  November  8,  1913 397 

Van  Pelt,  63  Misc.  616 127,  634,  720,  887 

Van  Rensselaer,  N.  Y.  Law  Journal,  October  11,  1912. .  .126,  635,  680 


XXVili  TABLE    OF   CASES 

PAGE 
Vassar,  127  N.  Y.  1 .  .37, 103, 162, 164, 166, 169,  582,  594, 670, 720, 727, 

860,  887 

Vernon  v.  Vernon,  53  N.  Y.  351 672,  673 

Victor,  159  App.  Div.  000 592 

Victor,  N.  Y.  Law  Journal,  May  8, 1913 289,  341,  390,  714,  753 

Vinot,  7  N.  Y.  Supp.  517 370 

Vivanti,  206  N.  Y.  656.  .253, 387,  592,  632,  633,  671,  708,  709,  714,  729, 

730,  753 

Von  Au  v.  Magenheimcr,  115  App.  Div.  84 709,  710 

Von  Au  v.  Magenheimer,  126  App.  Div.  257 620,  710,  714 

Von  Bernuth,  N.  Y.  Law  Journal,  March  1,  1913.  .788,  789,  791,  799, 

806 
Von  Post,  35  Misc.  367 240,  291,  738,  816,  843,  884 

W 

Wall,  Jacob,  105  App.  Div.  643 377 

Wallace,  James,  28  Misc.  603 204,  240,  632,  633,  669,  885 

Wallace,  Theodore  C.,  71  App.  Div.  284 632,  642,  664,  850 

Wallace,  Virginia,  N.  Y.  Law  Journal,  June  21, 1913 794 

Wallace  v.  Myers,  38  Fed.  Rep.  184 214,  876 

Walworth,  66  App.  Div.  171 44,  235,  275,  771,  775,  781 

Warren,  62  Misc.  444. .  122,  243,  251,  283,  307,  309,  329,  354,  365,  366, 

372,  633,  680,  777,  878 

Watson,  171  N.  Y.  256 253,  262,  385,  609,  685 

Weatherbee,  N.  Y.  Law  Journal,  November  5,  1913 711 

Webber,  151  App.  Div.  539.  .3, 37,  54, 106, 134, 179,  199, 203,  218,  221, 

362,  403,  699,  809,  860,  868,  871,  872 

Weeks,  185  N.  Y.  541 324,  643 

Weeks  v.  Kraft,  147  App.  Div.  403 72,  353,  596,  597,  640 

Weiler,  139  App.  Div.  905 240,  279,  280,  353,  633,  672,  879 

Weston  v.  Goodrich,  86  Hun,  194 162,  165,  180,  181,  847 

Westurn,  152  N.  Y.  93.  .77, 125,  126,  163,  171,  189,  211,  256,  275,  360, 
690,  591,  594,  610,  634,  638,  786,  855,  863,  876 

Wetherow  v.  Lord,  41  App.  413 795,  803 

Wheeler,  Elizabeth  W.,  115  App.  Div.  616 743,  836,  843 

Wheelright  v.  Rhodes,  28  Hun,  57 OSO 

White,  Eliza,  118  App.  Div.  869 253,  264,  686,  6!)t 

White,  E.  B.,  208  N.  Y.  64.  .S3,  186,  221,  271,  295,  300,  362,  371,  390, 

398,  587,  652,  664,  682,  736,  859,  860 

White,  Nathaniel  H.,  116  App.  Div.  183.  .224,  343,  632,  745,  835,  857 
Whiting,  A.,  150  N.  Y.  27.  .56,  205,  207,  215,  235,  284,  291,  300,  357, 

603,  731,  741,  745,  876 

Whiting,  C.  B.,  200  N.  Y.  520 150,  193,  375,  681,  745,  850 

Wilkens,  144  App.  Div.  803 789,  790,  795 


TABLE    OF   CASES  XXIX 

PAGE 

Willets,  190  N.  Y.  527. .  102,  230,  240,  257,  279,  280,  290,  352,  396,  633, 

640,  74&,  832,  848,  850,  879 

Williams'  Case,  3  Eland's  Ch.  R.  186 161 

Williams  v.  Whedon,  109  N.  Y.  333 121,  273 

Willmer,  153  App.  Div.  804. .  112,  270, 321, 331, 356,  593,  616,  670,  728, 

746,  845 

Winters,  21  Misc.  552 78,  162,  328,  665,  727,  746 

Wolfe,  C.,  179  N.  Y.  599.  .44,  162,  166,  192,  225,  275,  297,  337,  639, 

664,  670,  679,  731,  758 

Wolfe,  C.  L.,  137  N.  Y.  205.  .57,  78,  164,  167,  179,  329,  591,  665,  727, 

746,  831,  885 

Wolfe,  Emma  E.,  23  Misc.  439 176,  676,  685,  692 

Wood,  B.  M.,  68  Misc.  267 658 

Wood,  J.  H.,  40  Misc.  155 77,  111,  259,  607,  651,  731,  747,  786 

Wormser,  A.  J.,  36  Misc.  434 129,  599 

Wormser,  S.,  51  App.  Div.  441.  ..  .131,  203,  364,  583,  590,  722,  753 
Wunsch,  N.  Y.  Law  Journal,  January  24, 1913 787,  790 


Yerkes,  N.  Y.  Law  Journal,  December  5,  1912.  .239,  339,  636,  640,  663, 

854 

Z 

( 

Zefita,  167  N.  Y.  280 192,  251,  270,  301,  610,  733,  745,  862 


INHERITANCE  TAXATION 


THE  STATUTE 

/ 

(a)  Article   10  of   the   Tax   Law.     Section  230. 

(b)  Established    new    system    of 

taxation  for  this  state.  231. 

(c)  Property  subject  to  inheritance 

tax  even  though  not  taxable  232. 

under  general  tax  law. 

(d)  Inheritance  tax  is  of   ancient  233. 
origin. 

(e)  First  New  York  statute  that  of 

1885.  234. 

(f)  Amendments. 

(g)  The  present  statute. 
Section  220.     Taxable  transfers. 

221.  Exceptions  and  limi- 

tations. 235. 

221a.  Rates  of  tax. 
221b.  Exemption  of  certain  236. 

personal  property. 

222.  Accrual  and  payment 

of  tax.  237. 

223.  Discount      and      in- 

terest. 238. 

224.  Lien  of  tax  and  col- 

lection   by    execu- 
tors,     administra-  239. 
tors  and  trustees. 

225.  Refund  of  tax  erro-  240. 

neously  paid. 

226.  Taxes   upon    devises  241. 

and  bequests  in  lieu 
of  commissions. 

227.  Liability    of    certain 

corporations  to  tax.  242 . 

228.  Jurisdiction    of    the  243. 

surrogate.  244. 

229.  Appointment  of  ap- 

praisers,   stenogra-  245. 

phers    and    clerks. 

(a)  Article  10  of  the  Tax  Law 

The  statute  of  taxable  transfers,  commonly  known  as 
the  inheritance  tax  statute,  is  article  10  of  the  Tax  Law, 

1 


Proceedings  by  ap- 
praiser. 

Determination  of  sur- 
rogate. 

Appeal  and  other  pro- 
ceedings. 

Composition  of  trans- 
fer tax  upon  cer- 
tain estates. 

Surrogates'  compen- 
sation and  surro- 
gates' assistants  in 
New  York,  Kings 
and  other  counties. 

Proceedings  by  dis- 
trict attorneys. 

Receipts  from  county 
treasurer  or  comp- 
troller. 

Fees  of  county  treas- 
urer. 

Books  and  forms  to 
be  furnished  by  the 
state  comptroller. 

Reports  of  surrogate 
and  county  clerk. 

Reports  of  county 
treasurer. 

Report  of  state  comp- 
troller; payment  of 
taxes;  refunds  in 
certain  cases. 

Application  of  taxes. 

Definitions. 

Exemptions  in  article 
one  not  applicable. 

Limitation  of  time. 


2  THE   STATUTE 

§§  220   to   245,    Consolidated   Laws,    volume   V,   pages 
4118-4135,  as  amended. 

(b)  Established  new  tax  system  for  this  state 

"The  taxable  transfer  law  has  no  reference  or  relation 
to  the  general  law.  The  two  acts  are  not  in  pari  materia. 
While  the  object  of  both  is  to  raise  revenue  for  the  sup- 
port of  the  government,  they  have  nothing  else  in  com- 
mon. *  *  *  It  proceeds  upon  a  new  theory  of  the 
right  of  the  government  to  tax  and  establishes  a  new  sys- 
tem of  taxation.  It  taxes  the  right  of  succession  to  prop- 
erty, and  measures  the  tax  in  the  method  specifically  pre- 
scribed. *  *  * 

(c)  Property  subject  to  inheritance  tax  even  though 

not  taxable  under  general  tax  law 

"Many  kinds  of  property  might  be  enumerated  which 
are  not  assessable  under  the  general  law,  but  which  are 
appraisable  under  the  collateral  inheritance  act."  Matter 
of  Knoedler,  140  N.  Y.  377-380;  Matter  of  Hellman, 
174  N.  Y.  254-257;  Matter  of  Althause,  63  App.  Div. 
252-254,  affirmed,  without  opinion,  168  N.  Y.  670;  Matter 
of  Merriam,  141  N.  Y.  479,  sustained  in  163  U.  S.  625  sub 
nom.  United  States  v.  Perkins;  Matter  of  Plummer,  30 
Misc.  19,  affirmed,  without  opinion,  161  N.  Y.  631,  and 
sustained  in  178  U.  S.  115  sub  nom.  Plummer  v.  Coler; 
Matter  of  Hamilton,  148  N.  Y.  310;  eliam,  §  244. 

(d)  Inheritance  tax  is  of  ancient  origin 

"Taxes  upon  legacies  and  inheritances  have  been  ap- 
proved generally  by  writers  upon  political  economy  and 
systems  of  taxation,  and  no  tax  can  be  less  burdensome 
and  interfere  less  with  the  productive  and  industrial 
agencies  of  society.  Such  taxes  were  imposed  in  Rome  two 
thousand  years  ago."  Matter  of  McPherson,  104  N.  Y. 
306-316. 

(e)  First  New  York  statute  that  of  1885 

The  statute,  originally  known  as  the  Collateral  Inherit- 
ance Tax,  was  passed  on  June  10,  1885,  as  chapter  483 


§  220,   TAXABLE   TRANSFERS  3 

of  the  laws  of  that  year  and  took  effect  twenty  days  later. 
Matter  of  Howe,  112  N.  Y.  100. 

(f)  Amendments 

The  tax  was,  in  the  beginning,  a  tax  only  on  transfers  to 
certain  collaterals  and  strangers,  post,  page  404,  but  by 
Laws  1891,  chapter  215,  in  effect  April  20,  1891  (Matter 
of  Dreyfous,  18  N.  Y.  Supp.  767),  it  was  extended  to  trans- 
fers of  personal  property  to  lineals  and  certain  near  rel- 
atives who  had  theretofore  been  exempt,  and  it  was  again 
enlarged  on  March  16, 1903  (Laws  1903,  chapter  41)  to  in- 
clude transfers  of  real  estate  to  lineals  and  near  relatives. 

Since  1885  the  act  has  been  amended  over  forty  times. 
It  is  frequently  necessary  to  know  the  exact  phraseology 
of  some  repealed  statute  as  the  old  statutes  have  a  life 
extending  beyond  their  repeal.  Matter  of  Sloane,  154 
N.  Y.  109-113;  Matter  of  Webber,  151  App.  Div.  539; 
Matter  of  Ely,  157  App.  Div.  658;  Matter  of  Atterbury, 
N.  Y.  Law  Journal,  March  25,  1913,  post,  page  871;  Mat- 
ter of  Agnew,  id.,  December  13,  1913,  post,  page  53. 

They  may  be  likened  to  a  table  of  logarithms,  quite 
unnecessary  to  be  carried  in  the  memory,  but  indispensable 
if  the  transfer  be  made  prior  to  the  present  statute. 

At  the  end  of  each  section  of  the  present  statute  the 
time  when  the  last  amendment  was  made  is  noted.  For 
wording  of  the  section  prior  to  the  last  amendment  con- 
sult the  former  statutes  arranged  chronologically,  post, 
page  403. 

(g)  The  present  statute 

The  present  statute  is  as  follows: 

§  220.  Taxable  transfers 

A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer 
of  any  tangible  property  within  the  state  and  of  intangible 
property,  or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons  or  corporations  in  the 
following  cases,  subject  to  the  exemptions  and  limitations 
hereinafter  prescribed: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws 


4  THE    STATUTE 

of  this  state  of  any  intangible  property,  or  of  tangible 
property  within  the  state,  from  any  person  dying  seized 
or  possessed  thereof  while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of 
tangible  property  within  the  state,  and  the  decedent  was  a 
nonresident  of  the  state  at  the  time  of  his  death. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the 
property  of  a  nonresident  decedent  within  this  state, 
transferred  by  will  is  not  specifically  bequeathed  or  de- 
vised, such  property  shall,  for  the  purposes  of  this  article, 
be  deemed   to   be   transferred   proportionately   to   and 
divided  pro  rata  among  all  the  general  legatees  and  devisees 
named  in  said  decedent's  will,   including  all  transfers 
under  a  residuary  clause  of  such  will. 

4.  When  the  transfer  is  of  intangible  property,  or  of 
tangible  property  within  the  state,  made  by  a  resident,  or 
of  tangible  property  within  the  state  made  by  a  non- 
resident, by  deed,  grant,  bargain,  sale  or  gift  made  in 
contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death. 

5.  When   any   such   person   or   corporation   becomes 
beneficially  entitled,  hi  possession  or  expectancy,  to  any 
property  or  the  income  thereof  by  any  such  transfer 
whether  made  before  or  after  the  passage  of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise 
a  power  of  appointment  derived  from  any  disposition  of 
property  made  either  before  or  after  the  passage  of  this 
chapter,  such  appointment  when  made  shall  be  deemed  a 
transfer  taxable  under  the  provisions  of  this  chapter  in 
the  same  manner  as  though  the  property  to  which  such 
appointment  relates  belonged  absolutely  to  the  donee  of 
such  power  and  had  been  bequeathed  or  devised  by  such 
donee  by  will. 

^7.  The  tax  imposed  hereby  shall  be  upon  the  clear  mar- 
ket value  of  such  property,  at  the  rates  hereinafter  pre- 
scribed. (Laws  1909,  chap.  62,  post,  page  501,  as  amended 
by  Laws  1910,  chap.  706,  post,  page  520;  and  by  Laws  1911, 
chap.  732,  post,  page  526,  in  effect  July  21, 1911.} 


§221a,    RATES   OF   TAX  5 

§  221.  Exceptions  and  limitations 

Any  property  devised  or  bequeathed  for  religious 
ceremonies,  observances  or  commemorative  services  of  or 
for  the  deceased  donor,  or  to  any  person  who  is  a  bishop 
or  to  any  religious,  educational,  charitable,  missionary, 
benevolent,  hospital  or  infirmary  corporation,  wherever 
incorporated,  including  corporations  organized  exclusively 
for  bible  or  tract  purposes  and  corporations  organized  for 
the  enforcement  of  laws  relating  to  children  or  animals, 
shall  be  exempted  from  and  not  subject  to  the  provisions 
of  this  article.  There  shall  also  be  exempted  from  and  not 
subject  to  the  provisions  of  this  article  personal  property 
other  than  money  or  securities  bequeathed  to  a  corpora- 
tion or  association  wherever  incorporated  or  locate'd, 
organized  exclusively  for  the  moral  or  mental  improvement 
of  men  or  women  or  for  scientific,  literary,  library,  patri- 
otic, cemetery  or  historical  purposes  or  for  two  or  more  of 
such  purposes  and  used  exclusively  for  carrying  out  one 
or  more  of  such  purposes.  But  no  such  corporation  or  as- 
sociation shall  be  entitled  to  such  exemption  if  any  officer, 
member  or  employee  thereof  shall  receive  or  may  be  law- 
fully entitled  to  receive  any  pecuniary  profit  from  the  oper- 
ations thereof  except  reasonable  compensation  for  services 
in  effecting  one  or  more  of  such  purposes  or  as  proper  bene- 
ficiaries of  its  strictly  charitable  purposes;  or  if  the  organ- 
ization thereof  for  any  such  avowed  purpose  be  a  guise  or 
pretense  for  directly  or  indirectly  making  any  other 
pecuniary  profit  for  such  corporation  or  association  or 
for  any  of  its  members  or  employees  or  if  it  be  not  in  good 
faith  organized  or  conducted  exclusively  for  one  or  more 
of  such  purposes.  (Laws  1909,  chap.  62,  post,  page  502, 
as  amended  by  Laws  1910,  chap.  600,  post,  page  519;  and 
by  Laws  1910,  chap.  706,  post,  page  520;  and  by  Laws  1911, 
chap.  732,  post,  page  527;  and  by  Laws  1912,  chap.  206, 
post,  page  42;  and  by  Laws  1913,  chap.  356;  and  by  Laws 
1913,  chap.  795,  in  effect  June  17,  1913,  post,  page  43.) 

§  22 la.  Rates  of  tax 

1.  Upon  a  transfer  taxable  under  this  article  of  property 


6  THE    STATUTE 

or  any  beneficial  interest  therein,  of  an  amount  in  excess 
of  the  value  of  five  thousand  dollars  to  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a 
son,  or  the  husband  of  a  daughter,  or  any  child  or  children 
adopted  as  such  in  conformity  with  the  laws  of  this  state, 
of  the  decedent,  grantor,  donor,  or  vendor,  or  to  any 
child  to  whom  any  such  decedent,  grantor,  donor,  or 
vendor  for  not  less  than  ten  years  prior  to  such  transfer 
stood  in  the  mutually  acknowledged  relation  of  a  parent, 
provided,  however,  such  relationship  began  at  or  before 
the  child's  fifteenth  birthday  and  was  continuous  for 
said  ten  years  thereafter,  or  to  any  lineal  descendant  of 
such  decedent,  grantor,  donor,  or  vendor  born  in  lawful 
wedlock,  the  tax  on  such  transfer  shall  be  at  the  rate  of 

One  per  centum  on  any  amount  in  excess  of  five 
thousand  dollars  up  to  the  sum  of  fifty  thousand 
dollars. 

Two  per  centum  on  any  amount  in  excess  of  fifty  thou- 
sand dollars  up  to  the  sum  of  two  hundred  and  fifty 
thousand  dollars. 

Three  per  centum  on  any  amount  in  excess  of  two  hun- 
dred and  fifty  thousand  dollars  up  to  the  sum  of  one 
million  dollars. 

Four  per  centum  on  any  amount  in  excess  of  one  million 
dollars. 

2.  Upon  a  transfer  taxable  under  this  article  of  property 
or  any  beneficial  interest  therein  of  an  amount  in  excess 
of  the  value  of  one  thousand  dollars  to  any  person  or 
corporation  other  than  those  enumerated  in  paragraph 
one  of  this  section,  the  tax  shall  be  at  the  rate  of 

Five  per  centum  on  any  amount  in  excess  of  one  thou- 
sand dollars  up  to  the  sum  of  fifty  thousand  dollars. 

Six  per  centum  on  any  amount  in  excess  of  fifty  thou- 
sand dollars  up  to  the  sum  of  two  hundred  and  fifty  thou- 
sand dollars. 

Seven  per  centum  on  any  amount  in  excess  of  two  hun- 
dred and  fifty  thousand  dollars  up  to  the  sum  of  one 
million  dollars. 

Eight  per  centum  on  any  amount  in  excess  of  one  million 


§  223,   DISCOUNT   AND    INTEREST  7 

dollars.    (Added  by  Laws  1911,  chap.  782,  in  effect  July  21, 
1911.) 

§  22 Ib.  Exemption  of  certain  personal  property 

A  transfer  of  pictures,  statuary,  works  of  art,  antiques, 
books,  manuscripts  or  other  similar  personal  property 
shall  be  exempted  from  and  not  subject  to  the  provisions 
of  this  article,  if  within  two  years  after  such  transfer  the 
person  to  whom  such  transfer  is  made  shall  present  the 
same  to  the  state,  or  to  a  municipal  corporation  of  the 
state  for  educational,  scientific,  literary,  library,  or  his- 
torical purposes;  and  if  the  tax  thereon  shall  have  been 
theretofore  paid  the  amount  thereof  shall  be  refunded  in 
accordance  with  the  provisions  of  this  article.  (Added 
by  Laws  1913,  chap.  639,  in  effect  May  23, 1913.) 

§  222.  Accrual  and  payment  of  tax 

All  taxes  imposed  by  this  article  shall  be  due  and  pay- 
able at  the  tune  of  the  transfer,  except  as  herein  otherwise 
provided.  Taxes  upon  the  transfer  of  any  estate,  property 
or  interest  therein  limited,  conditioned,  dependent  or 
determinable  upon  the  happening  of  any  contingency  or 
future  event  by  reason  of  which  the  fab*  market  value 
thereof  cannot  be  ascertained  at  the  tune  of  the  transfer 
as  herein  provided,  shall  accrue  and  become  due  and 
payable  when  the  persons  or  corporations  beneficially 
entitled  thereto  shall  come  into  actual  possession  or  enjoy- 
ment thereof.  Such  tax  shall  be  paid  to  the  state  comp- 
troller in  a  county  in  which  the  office  of  appraiser  is 
salaried,  and  in  other  counties,  to  the  county  treasurer, 
and  said  state  comptroller  or  county  treasurer  shall  give, 
and  every  executor,  administrator  or  trustee  shall  take, 
duplicate  receipts  from  him  of  such  payment  as  provided 
in  section  two  hundred  and  thirty-six.  (Laws  1905,  chap. 
368,  post,  page  477,  in  effect  June  1, 1905.) 

§  223.  Discount  and  interest 

If  such  tax  is  paid  within  six  months  from  the  accrual 
thereof,  a  discount  of  five  per  centum  shall  be  allowed  and 
deducted  therefrom.  If  such  tax  is  not  paid  within  eight- 


8  THE    STATUTE 

een  months  from  the  accrual  thereof,  interest  shall  be 
charged  and  collected  thereon  at  the  rate  of  ten  per 
centum  per  annum  from  the  time  the  tax  accrued;  unless 
by  reason  of  claims  made  upon  the  estate,  necessary  litiga- 
tion or  other  unavoidable  cause  of  delay,  such  tax  cannot 
be  determined  and  paid  as  herein  provided,  in  which  case 
interest  at  the  rate  of  six  per  centum  per  annum  shall  be 
charged  upon  such  tax  from  the  accrual  thereof  until  the 
cause  of  such  delay  is  removed,  after  which  ten  per  centum 
shall  be  charged.  (Laws  1896,  chap.  908,  post,  page  439, 
as  amended  by  Laws  1905,  chap.  368,  post,  page  Jfl8,  in 
effect  June  1,  1905.} 

§  224.  Lien  of  tax  and  collection  by  executors,  adminis- 
trators and  trustees 

Every  such  tax  shall  be  and  remain  a  lien  upon  the 
property  transferred  until  paid  and  the  person  to  whom 
the  property  is  so  transferred,  and  the  executors,  adminis- 
trators and  trustees  of  every  estate  so  transferred  shall  be 
personally  liable  for  such  tax  until  its  payment.  Every 
executor,  administrator  or  trustee  shall  have  full  power 
to  sell  so  much  of  the  property  of  the  decedent  as  will 
enable  him  to  pay  such  tax  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the 
debts  of  the  testator  or  intestate.  Any  such  executor, 
administrator  or  trustee  having  in  charge  or  in  trust  any 
legacy  or  property  for  distribution  subject  to  such  tax 
shall  deduct  the  tax  therefrom  and  shall  pay  over  the  same 
to  the  state  comptroller  or  county  treasurer,  as  herein 
provided.  If  such  legacy  or  property  be  not  in  money,  he 
shall  collect  the  tax  thereon  upon  the  appraised  value 
thereof  from  the  person  entitled  thereto.  He  shall  not 
deliver  or  be  compelled  to  deliver  any  specific  legacy  or 
property  subject  to  tax  under  this  article  to  any  person 
until  he  shall  have  collected  the  tax  thereon.  If  any  such 
legacy  shall  be  charged  upon  or  payable  out  of  real  prop- 
erty, the  heir  or  devisee  shall  deduct  such  tax  therefrom 
and  pay  it  to  the  executor,  administrator  or  trustee,  and 
the  tax  shall  remain  a  lien  or  charge  on  such  real  property 


§225,  REFUND  OF  TAX  ERRONEOUSLY  PAID       9 

until  paid;  and  the  payment  thereof  shall  be  enforced  by 
the  executor,  administrator  or  trustee  in  the  same  manner 
that  payment  of  the  legacy  might  be  enforced,  or  by  the 
district  attorney  under  section  two  hundred  and  thirty-five 
of  this  chapter.  If  any  such  legacy  shall  be  given  in  money 
to  any  such  person  for  a  limited  period,  the  executor, 
administrator  or  trustee  shall  retain  the  tax  upon  the 
whole  amount,  but  if  it  be  not  in  money,  he  shall  make 
application  to  the  court  having  jurisdiction  of  an  account- 
ing by  him,  to  make  an  apportionment,  if  the  case  require 
it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees, 
and  for  such  further  order  relative  thereto  as  the  case 
may  require.  (Laws  1905,  chap.  368,  post,  page  478,  in 
effect  June  1, 1905.) 

§  225.  Refund  of  tax  erroneously  paid 

If  any  debts  shall  be  proven  against  the  estate  of  a 
decedent  after  the  payment  of  any  legacy  or  distributive 
share  thereof,  from  which  any  such  tax  has  been  deducted 
or  upon  which  it  has  been  paid  by  the  person  entitled  to 
such  legacy  or  distributive  share,  and  such  person  is 
required  by  order  of  the  surrogate  having  jurisdiction, 
on  notice  to  the  state  comptroller,  to  refund  the  amount 
of  such  debts  or  any  part  thereof,  an  equitable  proportion 
of  the  tax  shall  be  repaid  to  him  by  the  executor,  adminis- 
trator or  trustee,  if  the  tax  has  not  been  paid  to  the  state 
comptroller  or  county  treasurer;  or  if  such  tax  has  been 
paid  to  such  state  comptroller  or  county  treasurer,  such 
officer  shall  refund  out  of  the  funds  in  his  hands  or  custody 
to  the  credit  of  such  taxes  such  equitable  proportion  of  the 
tax,  and  credit  himself  with  the  same  in  the  account  re- 
quired to  be  rendered  by  him  under  this  article.  If  after 
the  payment  of  any  tax  in  pursuance  of  an  order  fixing 
such  tax,  made  by  the  surrogate  having  jurisdiction,  such 
order  be  modified  or  reversed  by  the  surrogate  having 
jurisdiction  within  two  years  from  and  after  the  date  of 
entry  of  the  order  fixing  the  tax,  or  be  modified  or  reversed 
at  any  time  on  an  appeal  taken  therefrom  within  the  time 
allowed  by  law  on  due  notice  to  the  state  comptroller,  the 


10 

state  comptroller  shall,  if  such  tax  was  paid  in  a  county  in 
which  the  office  of  appraiser  is  salaried,  refund  to  the 
executor,  administrator,  trustee,  person  or  persons  by 
whom  such  tax  was  paid,  the  amount  of  any  moneys  paid 
or  deposited  on  account  of  such  tax  in  excess  of  the  amount 
of  the  tax  fixed  by  the  order  modified  or  reversed,  out  of 
the  funds  hi  his  hands  or  custody  to  the  credit  of  such 
taxes,  and  to  credit  himself  with  the  same  in  the  account 
required  to  be  rendered  by  him  under  this  article,  or  if 
paid  in  a  county  in  which  the  office  of  appraiser  is  not 
salaried,  he  shall  by  warrant  direct  and  allow  the  county 
treasurer  of  the  county  to  refund  such  amount  in  the  same 
manner;  but  no  application  for  such  refund  shall  be  made 
after  one  year  from  such  reversal  or  modification,  unless 
an  appeal  shall  be  taken  therefrom,  in  which  case  no  such 
application  shall  be  made  after  one  year  from  the  final 
determination  on  such  appeal  or  of  an  appeal  taken  there- 
from, and  the  representatives  of  the  estate,  legatees, 
devisees  or  distributees  entitled  to  any  refund  under  this 
section  shall  not  be  entitled  to  any  interest  upon  such 
refund,  and  the  state  comptroller  shall  deduct  from  the 
fees  allowed  by  this  article  to  the  county  treasurer  the 
amount  theretofore  allowed  him  upon  such  overpayment. 
Where  it  shall  be  proved  to  the  satisfaction  of  the  surro- 
gate that  deductions  for  debts  were  allowed  upon  the 
appraisal,  since  proved  to  have  been  erroneously  allowed, 
it  shall  be  lawful  for  such  surrogate  to  enter  an  order 
assessing  the  tax  upon  the  amount  wrongfully  or  erro- 
neously deducted.  This  section,  as  amended,  shall  ap- 
ply to  appeals  and  proceedings  now  pending  and  taxes 
heretofore  paid  in  relation  to  which  the  period  of  one  year 
from  such  reversal  or  modification  has  not  expired  when 
this  section,  as  amended,  takes  effect.  (Laws  1909,  chap. 
62,  post,  page  504,  amended  by  Laws  1911,  chap.  308,  post, 
page  52^,  in  effect  June  12, 1911.) 

§  226.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 
missions 
If  a  testator  bequeaths  or  devises  property  to  one  or 


§  227,    LIABILITY   OF   CERTAIN   CORPORATIONS   TO   TAX     11 

more  executors  or  trustees  in  lieu  of  their  commissions  or 
allowances,  or  makes  them  his  legatees  to  an  amount 
exceeding  the  commissions  or  allowances  prescribed  by 
law  for  an  executor  or  trustee,  the  excess  in  value  of  the 
property  so  bequeathed  or  devised  above  the  amount  of 
commissions  or  allowances  prescribed  by  law  in  similar 
cases  shall  be  taxable  under  this  article.  (Laws  1892,  chap. 
899,  section  8,  post,  page  428,  in  effect  May  1, 1892.} 

§  227.  Liability  of  certain  corporations  to  tax 

If  a  foreign  executor,  administrator  or  trustee  shall 
assign  or  transfer  any  stock  or  obligations  in  this  state 
standing  in  the  name  of  a  decedent,  or  in  trust  for  a  dece- 
dent, liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
state  comptroller  or  the  treasurer  of  the  proper  county  on 
the  transfer  thereof.  No  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution,  person 
or  persons  having  in  possession  or  under  control  securities, 
deposits,  or  other  assets  belonging  to  or  standing  in  the 
name  of  a  decedent  who  was  a  resident  or  non-resident, 
or  belonging  to,  or  standing  in  the  joint  names  of  such  a 
decedent  and  one  or  more  persons,  including  the  shares 
of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer  herein  pro- 
vided, shall  deliver  or  transfer  the  same  to  the  executors, 
administrators  or  legal  representatives  of  said  decedent, 
or  to  the  survivor  or  survivors  when  held  in  the  joint 
names  of  a  decedent  and  one  or  more  persons,  or  upon 
their  order  or  request,  unless  notice  of  the  tune  and  place 
of  such  intended  delivery  or  transfer  be  served  upon  the 
state  comptroller  at  least  ten  days  prior  to  said  delivery 
or  transfer;  nor  shall  any  such  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  per- 
son or  persons  deliver  or  transfer  any  securities,  deposits 
or  other  assets  belonging  to  or  standing  in  the  name  of  a 
decedent,  or  belonging  to,  or  standing  in  the  joint  names  of 
a  decedent  and  one  or  more  persons,  including  the  shares 
of  the  capital  stock  of,  or  other  interests  in,  the  safe 


12  THE    STATUTE 

deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer,  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay 
any  tax  and  interest  which  may  thereafter  be  assessed 
on  account  of  the  delivery  or  transfer  of  such  securities, 
deposits  or  other  assets,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer,  under  the  provisions 
of  this  article,  unless  the  state  comptroller  consents 
thereto  in  writing.  And  it  shall  be  lawful  for  the  said 
state  comptroller,  personally  or  by  representative,  to  ex- 
amine said  securities,  deposits  or  assets  at  the  time  of 
such  delivery  or  transfer.  Failure  to  serve  such  notice  or 
failure  to  allow  such  examination  or  failure  to  retain  a 
sufficient  portion  or  amount  to  pay  such  tax  and  interest 
as  herein  provided  shall  render  said  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution, 
person  or  persons  liable  to  the  payment  of  the  amount 
of  the  tax  and  interest  due  or  thereafter  to  become  due 
upon  said  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 
safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  and 
in  addition  thereto,  a  penalty  of  not  less  than  five  or  more 
than  twenty-five  thousand  dollars;  and  the  payment  of 
such  tax  and  interest  thereon,  or  of  the  penalty  above 
prescribed,  or  both,  may  be  enforced  in  an  action  brought 
by  the  state  comptroller  in  any  court  of  competent  juris- 
diction. (Laws  1905,  chap.  868,  post,  page  480,  amended 
by  Laws  1908,  chap.  310,  post,  page  496,  in  effect  May  18, 
1908.} 

§  228.  Jurisdiction  of  the  surrogate 

The  surrogate's  court  of  every  county  of  the  state 
having  jurisdiction  to  grant  letters  testamentary  or  of 
administration  upon  the  estate  of  a  decedent  whose 
property  is  chargeable  with  any  tax  under  this  article, 
or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 


§229,   APPOINTMENT  OF  APPRAISERS  13 

or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction 
to  hear  and  determine  all  questions  arising  under  the 
provisions  of  this  article,  and  to  do  any  act  hi  relation 
thereto  authorized  by  law  to  be  done  by  a  surrogate  in 
other  matters  or  proceedings  coming  within  his  jurisdic- 
tion; and  if  two  or  more  surrogates'  courts  shall  be  en- 
titled to  exercise  any  such  jurisdiction,  the  surrogate  first 
acquiring  jurisdiction  hereunder  shall  retain  the  same  to 
the  exclusion  of  every  other  surrogate.  Every  petition 
for  ancillary  letters  testamentary  or  ancillary  letters  of 
administration  made  in  pursuance  of  the  provisions  of 
article  seven,  title  three,  chapter  eighteen  of  the  code  of 
civil  procedure  shall  set  forth  the  name  of  the  state 
comptroller  as  a  person  to  be  cited  as  therein  prescribed, 
and  a  true  and  correct  statement  of  all  the  decedent's 
property  in  this  state  and  the  value  thereof;  and  upon  the 
presentation  thereof  the  surrogate  shall  issue  a  citation 
directed  to  the  state  comptroller;  and  upon  the  return  of 
the  citation  the  surrogate  shall  determine  the  amount 
of  the  tax  which  may  be  or  become  due  under  the  provi- 
sions of  this  article  and  his  decree  awarding  the  letters 
may  contain  any  provision  for  the  payment  of  such  tax 
or  the  giving  of  security  therefor  which  might  be  made 
by  such  surrogate  if  the  state  comptroller  were  a  creditor 
of  the  decedent.  (Laws  1905,  chap.  368,  post,  page  481, 
in  effect  June  1, 1905.) 

§  229.  Appointment  of  appraisers,  stenographers  and 
clerks 

The  state  comptroller  shall  appoint  and  may  at  pleasure 
remove  not  to  exceed  six  persons  in  the  county  of  New 
York,  four  persons  in  the  counties  of  Kings  and  Bronx, 
and  one  person  hi  the  counties  of  Albany,  Dutchess,  Erie, 
Monroe,  Nassau,  Niagara,  Oneida,  Onondaga,  Orange, 
Queens,  Rensselaer,  Richmond,  Suffolk  and  Westchester, 
to  act  as  appraisers  therein.  The  state  comptroller,  from 
time  to  time  and  whenever  in  his  opinion  it  is  necessary, 
may  also  appoint  and  at  pleasure  remove  not  to  exceed 
two  additional  persons  to  act  as  transfer  tax  appraisers 


14  THE   STATUTE 

in  the  county  of  New  York,  to  whom  shall  be  referred  the 
appraisal  of  delinquent  estates  pending  before  the  transfer 
tax  appraisers  in  New  York  county,  where  more  than 
eighteen  months  have  elapsed  since  the  death  of  such 
decedents,  respectively,  and  also  to  act  as  appraiser  of 
other  estates  whenever  it  shall  appear  to  the  comptroller 
that  the  services  of  such  additional  appraiser  is  necessary. 
The  appraiser  so  appointed  shall  receive  an  annual  salary 
to  be  fixed  by  the  state  comptroller,  together  with  their 
actual  and  necessary  traveling  expenses  and  witness  fees, 
as  hereinafter  provided,  payable  monthly  by  the  state 
comptroller  out  of  any  funds  in  his  hands  or  custody  on 
account  of  transfer  tax.  The  salaries  of  each  of  the  ap- 
praisers so  appointed  shall  not  exceed  the  following 
amounts:  In  New  York  county,  four  thousand  dollars;  in 
Kings  and  Bronx  counties,  four  thousand  dollars;  in  Al- 
bany, Erie,  Queens  and  Westchester  counties,  three  thou- 
sand dollars;  in  Nassau,  Orange  and  Rensselaer  counties, 
two  thousand  dollars;  in  Monroe,  Oneida  and  Onondaga 
counties,  one  thousand  five  hundred  dollars;  in  Dutchess, 
Niagara,  Richmond  and  Suffolk  counties,  one  thousand 
dollars.  Each  of  the  said  appraisers  shall  file  with  the  state 
comptroller  his  oath  of  office  and  his  official  bond  in  the 
penal  sum  of  not  less  than  one  thousand  dollars,  in  the 
discretion  of  the  state  comptroller,  conditioned  for  the 
faithful  performance  of  his  duties  as  such  appraiser,  which 
bond  shall  be -approved  by  the  attorney-general  and  the 
state  comptroller.  The  state  comptroller  shall  retain  out 
of  any  funds  in  his  hands  on  account  of  said  tax  the  follow- 
ing amounts:  First,  a  sum  sufficient  to  provide  the  ap- 
praisers of  New  York  county  with  one  managing  clerk,  at  a 
salary  not  to  exceed  four  thousand  dollars  a  year,  whose 
duties  shall  be  prescribed  by  the  state  comptroller,  nine 
stenographers,  three  clerks,  one  examiner  of  values,  and 
one  assistant  examiner  of  values,  whose  salaries  shall  not 
exceed  two  thousand  dollars  a  year  each,  and  one  junior 
clerk,  whose  salary  shall  not  exceed  six  hundred  dollars  a 
year;  the  appraisers  of  Kings  and  Bronx  counties,  with  four 
stenographers,  whose  salaries  shall  not  exceed  two  thou- 


§  230,    PROCEEDINGS   BY   APPRAISER  15 

sand  dollars  a  year  each,  one  clerk,  whose  salary  shall  not 
exceed  seven  hundred  and  twenty  dollars  a  year;  one  page, 
whose  salary  shall  not  exceed  four  hundred  and  eighty 
dollars  a  year,  and  the  appraiser  of  Erie  county  with  one 
clerk,  whose  salary  shall  not  exceed  fifteen  hundred  dol- 
lars a  year,  and  the  appraiser  of  Westchester  county 
with  one  clerk,  whose  salary  shall  not  exceed  the  sum  of 
twelve  hundred  dollars  a  year,  and  the  appraiser  of 
Queens  county  with  one  clerk,  whose  salary  shall  not  ex- 
ceed the  sum  of  twelve  hundred  dollars  a  year,  and  the 
appraiser  of  Oneida  county  with  one  stenographer,  whose 
salary  shall  not  exceed  the  sum  of  nine  hundred  dollars  a 
year,  such  employees  to  be  appointed  by  the  state  comp- 
troller. The  state  comptroller  shall  also  retain  out  of  any 
funds  in  his  hands  on  account  of  said  tax  a  sum  sufficient 
to  provide  each  of  the  additional  transfer  tax  appraisers 
in  New  York  county,  whenever  appointed  as  hereinbefore 
provided,  with  a  stenographer,  whose  salary  shall  not  ex- 
ceed the  rate  of  two  thousand  dollars  a  year  each,  such 
employees  to  be  appointed  by  the  state  comptroller. 
Second,  a  sum  to  be  used  in  defraying  the  expenses  for 
office  rent,  stationery,  postage,  process  serving  and  other 
similar  expenses  necessarily  incurred  in  the  appraisal  of 
estates,  not  exceeding  fifteen  thousand  dollars  a  year  in 
New  York  county  and  five  thousand  dollars  a  year  in 
Kings,  and  Bronx  counties.  (Laws  1909,  chap.  62,  as 
amended  by  Laws  1909,  chap.  283,  post,  page  507;  and  by 
Laws  1910,  chap.  706,  post,  page  523;  and  by  Laws  1911, 
chap.  803,  and  by  Laws  1912,  chap.  21 4,  and  by  Laws  1913, 
chap.  366,  in  effect  April  24,  1913.} 

§  230.  Proceedings  by  appraiser 

In  each  county  in  which  the  office  of  appraiser  is  not 
salaried  the  county  treasurer  shall  act  as  appraiser.  The 
surrogate,  either  upon  his  own  motion,  or  upon  the 
application  of  any  interested  person,  including  the  state 
comptroller,  shall  by  order  direct  the  person  or  one  of  the 
persons  appointed  pursuant  to  section  two  hundred  and 
twenty-nine  of  this  article  in  counties  in  which  the  office 


16  THE    STATUTE 

of  appraiser  is  salaried,  and  in  other  counties,  the  county 
treasurer,  to  fix  the  fair  market  value  of  property  of  per- 
sons whose  estates  shall  be  subject  to  the  payment  of  any 
tax  imposed  by  this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by 
mail  to  all  persons  known  to  have  a  claim  or  interest  in 
the  property  to  be  appraised,  including  the  state  comp- 
troller, and  to  such  persons  as  the  surrogate  may  by  order 
direct,  of  the  tune  and  place  when  he  will  appraise  such 
property.  He  shall  at  such  time  and  place  appraise  the 
same  at  its  fair  market  value  as  herein  prescribed;  and 
for  that  purpose  the  said  appraiser  is  authorized  to  issue 
subpoenas  and  to  compel  the  attendance  of  witnesses 
before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value 
thereof;  and  he  shall  make  report  thereof  and  of  such  value 
in  writing,  to  the  said  surrogate,  together  with  the  deposi- 
tions of  the  witnesses  examined,  and  such  other  facts  in 
relation  thereto  and  to  said  matter  as  the  surrogate  may 
order  or  require.  Every  appraiser,  except  in  the  counties 
in  which  the  office  of  appraiser  is  salaried,  for  which 
provision  is  hereinbefore  made,  shall  be  paid  by  the  state 
comptroller  and  after  the  audit  of  said  state  comptroller, 
his  actual  and  necessary  traveling  expenses  and  the  fees 
paid  such  witnesses,  which  fees  shall  be  the  same  as 
those  now  paid  to  witnesses  subpoenaed  to  attend  in 
courts  of  record,  payment  to  be  made  out  of  funds  in  the 
hands  of  the  county  treasurer  of  the  proper  county  on 
account  of  the  tax  imposed  under  the  provisions  of  this 
article. 

The  value  of  every  future  or  limited  estate,  income, 
interest  or  annuity  dependent  upon  any  life  or  lives  in 
being,  shall  be  determined  by  the  rule,  method  and 
standard  of  mortality  and  value  employed  by  the  superin- 
tendent of  insurance  in  ascertaining  the  value  of  policies 
of  life  insurance  and  annuities  for  the  determination  of 
liabilities  of  life  insurance  companies,  except  that  the 
rate  of  interest  for  making  such  computation  shall  be 
five  per  centum  per  annum. 


§230,    TAX   IMPOSED   AT  HIGHEST  RATE  17 

In  estimating  the  value  of  any  estate  or  interest  in 
property,  to  the  beneficial  enjoyment  or  possession  whereof 
there  are  persons  or  corporations  presently  entitled 
thereto,  no  allowance  shall  be  made  on  account  of  any 
contingent  incumbrance  thereon,  nor  on  account  of  any 
contingency  upon  the  happening  of  which  the  estate 
or  property  or  some  part  thereof  or  interest  therein  might 
be  abridged,  defeated  or  diminished;  provided,  however, 
that  in  the  event  of  such  incumbrance  taking  effect  as  an 
actual  burden  upon  the  interest  of  the  beneficiary,  or  in 
the  event  of  the  abridgment,  defeat  or  diminution  of  said 
estate  or  property  or  interest  therein  as  aforesaid,  a  return 
shall  be  made  to  the  person  properly  entitled  thereto  of  a 
proportionate  amount  of  such  tax  on  account  of  the  incum- 
brance  when  taking  effect,  or  so  much  as  will  reduce  the 
same  to  the  amount  which  would  have  been  assessed  on 
account  of  the  actual  duration  or  extent  of  the  estate  or 
interest  enjoyed.  Such  return  of  tax  shall  be  made  hi  the 
manner  provided  by  section  two  hundred  and  twenty-five 
of  this  article. 

Where  any  property  shall,  after  the  passage  of  this 
chapter,  be  transferred  subject  to  any  charge,  estate  or 
interest,  determinable  by  the  death  of  any  person,  or  at 
any  period  ascertainable  only  by  reference  to  death,  the 
increase  accruing  to  any  person  or  corporation  upon  the 
extinction  or  determination  of  such  charge,  estate  or 
interest,  shall  be  deemed  a  transfer  of  property  taxable 
under  the  provisions  of  this  article  in  the  same  manner  as 
though  the  person  or  corporation  beneficially  entitled 
thereto  had  then  acquired  such  increase  from  the  person 
from  whom  the  title  to  their  respective  estates  or  interests 
is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interest  or  estates  of  the  transferees  are  de- 
pendent upon  contingencies  or  conditions  whereby  they 
may  be  wholly  or  in  part  created,  defeated,  extended  or 
abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the 
highest  rate  which,  on  the  happening  of  any  of  the  said 
contingencies  or  conditions,  would  be  possible  under  the 
2  V 


18  THE   STATUTE 

provisions  of  this  article,  and  such  tax  so  imposed  shall  be 
due  and  payable  forthwith  by  the  executors  or  trustees 
out  of  the  property  transferred,  and  the  surrogate  shall 
enter  a  temporary  order  determining  the  amount  of  said 
tax  in  accordance  with  this  provision;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the 
said  property,  or  any  part  thereof,  is  transferred  to  a 
person  or  corporation  exempt  from  taxation  under  the 
provisions  of  this  article,  or  to  any  person  taxable  at  a 
rate  less  than  the  rate  imposed  and  paid,  such  person  or 
corporation  shall  be  entitled  to  a  return  of  so  much  of  the 
tax  imposed  and  paid  as  is  the  difference  between  the 
amount  paid  and  the  amount  which  said  person  or  corpora- 
tion should  pay  under  the  provisions  of  this  article;  and 
the  executor  or  trustee  of  each  estate,  or  the  legal  repre- 
sentative having  charge  of  the  trust  fund,  shall  im- 
mediately upon  the  happening  of  said  contingencies  or 
conditions  apply  to  the  surrogate  of  the  proper  county, 
upon  a  verified  petition  setting  forth  all  the  facts,  and 
giving  at  least  ten  days'  notice  by  mail  to  all  interested 
persons  or  corporations,  for  an  order  modifying  the  tem- 
porary taxing  order  of  said  surrogate  so  as  to  provide 
for  the  final  assessment  and  determination  of  the  tax  in 
accordance  with  the  ultimate  transfer  or  devolution  of 
said  property.  Such  return  of  overpayment  shall  be 
made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article. 

Estates  in  expectancy  which  are  contingent  or  defeasible 
and  in  which  proceedings  for  the  determination  of  the 
tax  have  not  been  taken  or  where  the  taxation  thereof  has 
been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation 
theretofore  made  of  the  particular  estates  for  purposes  of 
taxation,  upon  which  said  estates  in  expectancy  may  have 
been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by 
the  act  or  omission  of  the  legatee  or  devisee  it  shall  be 


§231,   DETERMINATION   OF   SURROGATE  19 

taxed   as  if  there  were  no  possibility  of  such  divest- 
ing. 

The  report  of  the  appraiser  shall  be  made  in  duplicate, 
one  of  which  duplicates  shall  be  filed  in  the  office  of  the 
surrogate  and  the  other  in  the  office  of  the  state  comp- 
troller. (Laws  1909,  chap.  62,  post,  page  508,  as  amended  by 
Laws  1911,  chap.  800,  post,  page  529,  in  effect  July  28, 1911.) 

§  231.  Determination  of  surrogate 

From  such  report  of  appraisal  and  other  proof  relating 
to  any  such  estate  before  the  surrogate,  the  surrogate 
shall  forthwith,  as  of  course,  determine  the  cash  value  of 
all  estates  and  the  amount  of  tax  to  which  the  same  are 
liable;  or  the  surrogate  may  so  determine  the  cash  value 
of  all  such  estates  and  the  amount  of  tax  to  which  the  same 
are  liable,  without  appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  applica- 
tion of  any  surrogate,  determine  the  value  of  any  such 
future  or  contingent  estates,  income  or  interest  therein 
limited,  contingent,  dependent  or  determinable  upon  the 
life  or  lives  of  persons  in  being,  upon  the  facts  contained 
in  any  such  appraiser's  report,  and  certify  the  same  to  the 
surrogate,  and  his  certificate  shall  be  conclusive  evidence 
that  the  method  of  computation  adopted  therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the 
determination  by  him  as  to  the  value  of  any  estate  which 
is  taxable  under  this  article,  and  of  the  tax  to  which  it  is 
liable,  to  all  persons  known  to  be  interested  therein,  and 
shall  immediately  forward  a  copy  of  such  taxing  order  to 
the  state  comptroller.  The  surrogate  shall  also  forward  to 
the  state  comptroller  copies  of  all  orders  entered  by  him 
in  relation  to  or  affecting  in  any  way  the  transfer  tax  on 
any  estate,  including  orders  of  exemption. 

If,  however,  it  appear  at  any  stage  of  the  proceedings 
that  any  of  such  persons  known  to  be  interested  in  the 
estate  is  an  infant  or  an  incompetent,  the  surrogate  may, 
if  the  interest  of  such  infant  or  incompetent  is  presently 
involved  and  is  adverse  to  that  of  any  of  the  other  persons 
interested  therein,  appoint  a  special  guardian  of  such 


20  THE    STATUTE 

infant;  but  nothing  in  this  provision  shall  affect  the  right 
of  an  infant  over  fourteen  years  of  age  or  of  anyone  on 
behalf  of  an  infant  under  fourteen  years  of  age  to  nominate 
and  apply  for  the  appointment  of  a  special  guardian 
for  such  infant  at  any  stage  of  the  proceedings.  (Laws 
1905,  chap.  365,  post,  page  486,  in  effect  June  1,  1905.) 

§  232.  Appeal  and  other  proceedings 

The  state  comptroller  or  any  person  dissatisfied  with 
the  appraisement  or  assessment  and  determination  of  tax 
may  appeal  therefrom  to  the  surrogate  within  sixty  days 
from  the  fixing,  assessing  and  determination  of  tax  by  the 
surrogate  as  herein  provided,  upon  filing  in  the  office 
of  the  surrogate  a  written  notice  of  appeal,  which  shall 
state  the  grounds  upon  which  the  appeal  is  taken;  but  no 
costs  shall  be  allowed  by  the  surrogate  on  such  appeal. 

Within  two  years  after  the  entry  of  an  order  or  decree 
of  a  surrogate  determining  the  value  of  an  estate  and 
assessing  the  tax  thereon,  the  state  comptroller  may,  if  he 
believes  that  such  appraisal,  assessment  or  determination 
has  been  fraudulently,  collusively  or  erroneously  made, 
make  application  to  a  justice  of  the  supreme  court  of  the 
judicial  district  embracing  the  surrogate's  court  hi  which 
the  order  or  decree  has  been  filed,  for  a  reappraisal  thereof. 
The  justice  to  whom  such  application  is  made  may  there- 
upon appoint  a  competent  person  to  reappraise  such 
estate.  Such  appraiser  shall  possess  the  powers  and  be 
subject  to  the  duties  of  an  appraiser  under  section  two 
hundred  and  thirty  and  shall  receive  compensation  at  the 
rate  of  five  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  such  appraisal.  Such  compensa- 
tion shall  be  payable  by  the  state  comptroller  or  county 
treasurer  out  of  any  funds  he  may  have  on  account  of  any 
tax  imposed  under  the  provisions  of  this  article,  upon  the 
certificate  of  the  justice  appointing  him.  The  report  of 
such  appraiser  shall  be  filed  with  the  justice  by  whom  he 
was  appointed,  and  thereafter  the  same  proceedings  shall 
be  taken  and  had  by  and  before  such  justice  as  are  herein 
provided  to  be  taken  and  had  by  and  before  the  surro- 


§  233,   COMPOSITION   OF   TRANSFER   TAX  21 

gate.  The  determination  and  assessment  of  such  justice 
shall  supersede  the  determination  and  assessment  of  the 
surrogate,  and  shall  be  filed  by  such  justice  in  the  office 
of  the  state  comptroller,  and  a  certified  copy  thereof 
transmitted  to  the  surrogate's  court  of  the  proper  county. 
(Laws  1908,  chap.  310,  post,  page  497,  in  effect  May  18, 
1908.} 

§  233.  Composition  of  transfer  tax  upon  certain  estates 

The  state  comptroller,  by  and  with  the  consent  of  the 
attorney-general  expressed  in  writing,  is  hereby  empow- 
ered and  authorized  to  enter  into  an  agreement  with  the 
trustees  of  any  estate  in  which  remainders  or  expectant 
estates  have  been  of  such  a  nature,  or  so  disposed  and  cir- 
cumstanced, that  the  taxes  therein  were  held  not  pres- 
ently payable,  or  where  the  interests  of  the  legatees  or 
devisees  were  not  ascertainable  under  the  provisions 
of  chapter  four  hundred  and  eighty-three  of  the  laws  of 
eighteen  hundred  and  eighty-five;  chapter  three  hundred 
and  ninety-nine  of  the  laws  of  eighteen  hundred  and 
ninety-two,  or  chapter  nine  hundred  and  eight  of  the 
laws  of  eighteen  hundred  and  ninety-six,  and  the  sev- 
eral acts  amendatory  thereof  and  supplemental  thereto; 
and  to  compound  such  taxes  upon  such  terms  as  may  be 
deemed  equitable  and  expedient;  and  to  grant  discharge 
to  said  trustees  upon  the  payment  of  the  taxes  provided 
for  hi  such  composition,  provided,  however,  that  no  such 
composition  shall  be  conclusive  in  favor  of  said  trustees 
as  against  the  interest  of  such  cestuis  que  trust  as  may 
possess  either  present  rights  of  enjoyment,  or  fixed, 
absolute  or  indefeasible  rights  of  future  enjoyment,  or  of 
such  as  would  possess  such  rights  in  the  event  of  the 
immediate  termination  of  particular  estates,  unless  they 
consent  thereto,  either  personally,  when  competent,  or 
by  guardian  or  committee.  Composition  or  settlement 
made  or  effected  under  the  provisions  of  this  section  shall 
be  executed  in  triplicate,  and  one  copy  filed  in  the  office  of 
the  state  comptroller,  one  copy  in  the  office  of  the  surro- 
gate of  the  county  in  which  the  tax  was  paid,  and  one 


22  THE    STATUTE 

copy  delivered  to  the  executors,  administrators  Or  trustees 
who  shall  be  parties  thereto.  (Laws  1905,  chap.  368,  in 
effect  June  1,1 905.} 

§  234.  Surrogate's  assistants  in  New  York,  Kings  and 

other  counties 

The  state  comptroller  may,  upon  the  recommendation 
of  the  surrogate,  appoint,  and  may  at  pleasure  remove, 
assistants  and  clerks  hi  the  surrogates'  offices  of  the  follow- 
ing counties,  at  annual  salaries  to  be  fixed  by  him  not  to 
exceed  the  amounts  hereinafter  specified : 

1.  In  New  York  county,  a  transfer  tax  assistant,  five 
thousand  dollars;  a  transfer  tax  clerk,  two  thousand  four 
hundred  dollars;  an  assistant  clerk,   eighteen  hundred 
dollars;  a  recording  clerk,  thirteen  hundred  dollars;  a 
stenographer,  twelve  hundred  dollars;  and  shall  be  en- 
titled to  expend  not  more  than  seven  hundred  and  fifty 
dollars  a  year  in  such  office  for  expenses  necessarily  in- 
curred in  the  assessment  and  collection  of  taxes  under 
this  article. 

2.  In  Kings  county,  a  transfer  tax  assistant,  four  thou- 
sand dollars;  a  transfer  tax  clerk,  two  thousand  dollars; 
an  assistant  clerk,  fifteen  hundred  dollars;  and  shall  be 
entitled  to  expend  not  more  than  five  hundred  dollars  a 
year  for  expenses  necessarily  incurred  hi  the  assessment 
and  collection  of  taxes  under  this  article. 

3.  In  Erie  county,  a  transfer  tax  clerk,  eighteen  hun- 
dred dollars. 

4.  In  Westchester  county,  a  transfer  tax  assistant,  two 
thousand  five  hundred  dollars. 

5.  In  Albany  county,  a  transfer  tax  clerk,  fifteen  hun- 
dred dollars. 

6.  In  Queens  county,  a  transfer  tax  clerk,  fifteen  hun- 
dred dollars. 

7.  In  Onondaga  county,  a  transfer  tax  clerk,  twelve 
hundred  dollars. 

8.  In  Monroe  county,   two  transfer  tax  clerks,   one 
thousand  dollars  each;  and  shall  be  entitled  to  expend  not 
more  than  two  hundred  dollars  a  year  for  expenses  neces- 


§  235,    PROCEEDINGS   BY   DISTRICT   ATTORNEYS  23 

sarily  incurred  in  the  assessment  and  collection  of  taxes 
under  this  article. 

9.  In  Dutchess  county,  a  transfer  tax  clerk,  nine  hun- 
dred dollars. 

10.  In  Oneida  county,  not  more  than  two  transfer  tax 
clerks,  twelve  hundred  dollars  in  the  aggregate. 

11.  In  Suffolk  county,  a  transfer  tax  clerk,  one  thou- 
sand dollars. 

12.  In  Ulster  county,  a  transfer  tax  clerk,  seven  hun- 
dred and  twenty  dollars. 

13.  In  Richmond  county,  a  transfer  tax  clerk,  one 
thousand  dollars. 

14.  In  Nassau  county,  a  transfer  tax  clerk,  twelve 
hundred  dollars. 

Such  salaries  and  expenses  shall  be  paid  monthly  by  the 
state  comptroller,  upon  proper  vouchers,  out  of  any  funds 
in  his  hands  on  account  of  taxes  collected  under  this 
article.  (Laws  1909,  chap.  62,  post,  page  513,  as  amended 
by  Laws  1910,  chap.  70;  Laws  1911,  chaps.  160,  681  and 
744,'  Laws  1912,  chap.  45;  Laws  1913,  chap.  429.) 

§  235.  Proceedings  by  district  attorneys 

If,  after  the  expiration  of  eighteen  months  from  the 
accrual  of  any  tax  under  this  article,  such  tax  shall  re- 
main due  and  unpaid,  after  the  refusal  or  neglect  of  the 
persons  liable  therefor  to  pay  the  same,  the  state  comp- 
troller shall  notify  the  district  attorney  of  the  county,  in 
writing,  of  such  failure  or  neglect,  and  such  district  at- 
torney shall  apply  to  the  surrogate's  court  for  a  citation, 
citing  the  persons  liable  to  pay  such  tax  to  appear  before 
the  court  on  the  day  specified,  not  more  than  three  months 
after  the  date  of  such  citation,  and  show  cause  why  the 
tax  should  not  be  paid.  The  surrogate,  upon  such  applica- 
tion, and  whenever  it  shall  appear  to  him  that  any  such 
tax  accruing  under  this  article  has  not  been  paid  as  re- 
quired by  law,  shall  issue  such  citation,  and  the  service 
of  such  citation,  and  the  tune,  manner  and  proof  thereof, 
and  the  hearing  and  determination  thereon  and  the  en- 
forcement of  the  determination  or  order  made  by  the 


24  THE   STATUTE 

surrogate  shall  conform  to  the  provisions  of  the  code  of 
civil  procedure  for  the  service  of  citations  out  of  the  sur- 
rogate's court,  and  the  hearing  and  determination  thereon 
and  its  enforcement  so  far  as  the  same  may  be  applicable. 
The  surrogate  or  his  clerk  shall,  upon  request  of  the 
district  attorney  or  the  state  comptroller,  furnish,  without 
fee,  one  or  more  transcripts  of  such  decree,  which  shall  be 
docketed  and  filed  by  the  county  clerk  of  any  county  of 
the  state  without  fee,  in  the  same  manner  and  with  the 
same  effect  as  provided  by  law  for  filing  and  docketing 
transcripts  of  decrees  of  the  surrogate's  court.  The  costs 
awarded  by  any  such  decree  after  the  collection  and  pay- 
ment of  the  tax  to  the  state  comptroller  or  county  treas- 
urer may  be  retained  by  the  district  attorney  for  his  own 
use.  Such  costs  shall  be  fixed  by  the  surrogate  in  his 
discretion,  but  shall  not  exceed  in  any  case  where  there 
has  not  been  a  contest,  the  sum  of  one  hundred  dollars,  or 
where  there  has  been  a  contest,  the  sum  of  two  hundred 
and  fifty  dollars.  Whenever  the  surrogate  shall  certify 
that  there  was  probable  cause  for  issuing  a  citation  and 
taking  the  proceedings  specified  hi  this  section,  the  state 
comptroller,  after  the  same  shall  have  been  audited  by 
him,  shall  pay  all  expenses  incurred  for  the  service  of 
citations  and  other  lawful  disbursements  not  otherwise 
paid,  from  funds  in  his  hands  on  account  of  such  tax,  or 
in  a  county  in  which  the  office  of  appraiser  is  not  salaried, 
by  a  warrant  upon  the  county  treasurer  of  such  county 
for  the  payment  by  him  of  the  same  from  funds  in  his 
hands  on  account  of  such  tax.  In  proceedings  to  which 
the  state  comptroller  is  cited  as  a  party  under  sections 
two  hundred  and  twenty-eight  and  two  hundred  and 
thirty  of  this  article,  he  is  authorized  to  designate  and 
retain  counsel  to  represent  him  and  to  pay  the  expenses 
thereby  incurred  out  of  the  funds  which  may  be  in  his 
hands  en  account  of  this  tax  in  any  case  in  a  county  where 
the  office  of  appraiser  is  salaried,  and  in  any  other  county 
the  state  comptroller  shall  by  warrant  direct  the  county 
treasurer  to  pay  such  expenses  out  of  any  funds  which 
may  be  in  his  hands  on  account  of  this  tax;  provided,  how- 


§  237,    FEES  OF  COUNTY  TREASURER  25 

ever,  that  in  the  collection  of  taxes  upon  estates  of  non- 
resident decedents  the  state  comptroller  shall  not  allow 
for  legal  services  up  to  and  including  the  entry  of  the 
order  of  the  surrogate  fixing  the  tax  a  sum  exceeding  ten 
per  centum  of  the  taxes  and  penalties  collected.  (Laws 
1905,  chap.  368,  post,  page  489,  in  effect  June  1, 1905.} 

§  236.  Receipts  from  county  treasurer  or  comptroller 

One  of  the  duplicate  receipts  issued  for  the  payment 
of  any  tax  under  this  article,  as  provided  by  section  two 
hundred  and  twenty-two,  shall  be  countersigned  by  the 
state  treasurer  if  the  same  was  issued  by  the  state  comp- 
troller, and  by  the  state  comptroller  if  issued  by  any 
county  treasurer.  The  officer  so  countersigning  the  same 
shall  charge  the  officer  receiving  the  tax  with  the  amount 
thereof  and  affix  the  seal  of  his  office  to  the  same  and  re- 
turn to  the  proper  person;  but  no  executor,  administrator 
or  trustee  shall  be  entitled  to  a  final  accounting  of  an 
estate  in  settlement  of  which  a  tax  is  due  under  the  pro- 
visions of  this  article  unless  he  shall  produce  a  receipt  so 
sealed  and  countersigned,  or  a  certified  copy  thereof. 
Any  person  shall,  upon  the  payment  of  fifty  cents  to  the 
officer  issuing  such  receipt,  be  entitled  to  a  duplicate 
thereof,  to  be  signed,  sealed  and  countersigned  hi  the 
same  manner  as  the  original. 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be 
entitled  to  a  certificate  of  the  state  comptroller  that  the 
tax  upon  the  transfer  of  any  real  estate  of  which  any 
decedent  died  seized  has  been  paid,  such  certificate  to 
designate  the  real  property  upon  which  such  tax  is  paid, 
the  name  of  the  person  so  paying  the  same,  and  whether 
in  full  of  such  tax.  Such  certificate  may  be  recorded  in 
the  office  of  the  county  clerk  or  register  of  the  county 
where  such  real  property  is  situate,  in  a  book  to  be  kept 
by  him  for  that  purpose,  which  shall  be  labeled  "transfer 
tax."  (Laws  1905,  chap.  368.) 

§  237.  Fees  of  county  treasurer 
The  treasurer  of  each  county  hi  which  the  office  of 


26  THE   STATUTE 

appraiser  is  not  salaried  shall  be  allowed  to  retain,  on  all 
taxes  paid  and  accounted  for  by  him  each  fiscal  year  under 
this  article,  five  per  centum  on  the  first  fifty  thousand 
dollars,  two  and  one-half  per  centum  on  the  next  fifty 
thousand  dollars,  and  one  per  centum  on  all  additional 
sums.  Such  fees  shall  be  in  addition  to  the  salaries  and 
fees  now  allowed  by  law  to  such  officers.  (Laws  1908, 
chap.  310,  post,  page  499,  in  effect  May  18, 1908.} 

§  238.  Books  and  forms  to  be  furnished  by  the  state 
comptroller 

The  state  comptroller  shall  furnish  to  each  surrogate  a 
book,  which  shall  be  a  public  record,  and  in  which  he  shall 
enter  the  name  of  every  decedent  upon  whose  estate 
an  application  to  him  has  been  made  for  the  issue  of  letters 
of  administration,  or  letters  testamentary,  or  ancillary 
letters,  the  date  and  place  of  death  of  such  decedent,  the 
estimated  value  of  his  real  and  personal  property,  the 
names,  places  of  residence  and  relationship  to  him  of  his 
heirs-at-law,  the  names  and  places  of  residence  of  the 
legatees  and  devisees  in  any  will  of  any  such  decedent,  the 
amount  of  each  legacy  and  the  estimated  value  of  any 
real  property  devised  therein,  and  to  whom  devised. 
These  entries  shall  be  made  from  the  data  contained  in  the 
papers  filed  on  any  such  application,  or  in  any  proceeding 
relating  to  the  estate  of  the  decedent.  The  surrogate  shall 
also  enter  in  such  book  the  amount  of  the  personal  prop- 
erty of  any  such  decedent,  as  shown  by  the  inventory 
thereof  when  made  and  filed  in  his  office,  and  the  returns 
made  by  any  appraiser  appointed  by  him  under  this 
article,  and  the  value  of  annuities,  life  estates,  terms  of 
years,  and  other  property  of  any  such  decedent  or  given 
by  him  hi  his  will  or  otherwise,  as  fixed  by  the  surrogate, 
and  the  tax  assessed  thereon,  and  the  amounts  of  any 
receipts  for  payment  of  any  tax  on  the  estate  of  such 
decedent  under  this  article  filed  with  him.  The  state 
comptroller  shall  also  furnish  to  each  surrogate  forms  for 
the  reports  to  be  made  by  such  surrogate,  which  shall 
correspond  with  the  entries  to  be  made  in  such  book. 


§  240,  REPORTS  OF  COUNTY  TREASURER       27 

(Laws  1892,  chap.  399,  section  18,  post,  page  434,  in  effect 
May  1, 1892.) 

§  239.  Reports  of  surrogate  and  county  clerk 

Each  surrogate  shall,  on  January,  April,  July  and 
October  first  of  each  year,  make  a  report,  upon  the  forms 
furnished  by  the  comptroller  containing  all  the  data  and 
matters  required  to  be  entered  hi  such  book,  which  shall 
be  immediately  forwarded  to  the  state  comptroller. 
The  county  clerk  of  each  county,  except  in  the  counties 
where  the  registers  perform  the  duties  of  the  county  clerk 
with  respect  to  the  recording  of  deeds,  and  when  in  such 
counties  the  registers  shall,  at  the  same  tunes,  make 
reports  containing  a  statement  of  any  deed  or  other  con- 
veyance filed  or  recorded  in  his  office,  of  any  property, 
which  appears  to  have  been  made  or  intended  to  take 
effect  hi  possession  or  enjoyment  after  the  death  of  the 
grantor  or  vendor,  with  the  name  and  place  of  residence  of 
such  grantor  or  vendor,  the  name  and  place  of  residence  of 
the  grantee  or  vendee,  and  a  description  of  the  property 
transferred,  which  shall  be  immediately  forwarded  to  the 
state  comptroller.  (Laws  1905,  chap.  368.) 

§  240.  Reports  of  county  treasurer 

Each  county  treasurer  hi  a  county  in  which  the  office  of 
appraiser  is  not  salaried  shall  make  a  report,  under  oath, 
to  the  state  comptroller,  on  January,  April,  July  and 
October  first  of  each  year,  of  all  taxes  received  by  him 
under  this  article,  stating  for  what  estate  and  by  whom 
and  when  paid.  The  form  of  such  report  may  be  pre- 
scribed by  the  state  comptroller.  He  shall,  at  the  same 
time,  pay  the  state  treasurer  all  taxes  received  by  him 
under  this  article  and  not  previously  paid  into  the  state 
treasury,  except  as  provided  hi  the  next  section,  and  for 
all  such  taxes  collected  by  him  and  not  paid  into  the  state 
treasury  within  thirty  days  from  the  times  herein  required, 
he  shall  pay  interest  at  the  rate  of  ten  per  centum  per 
annum.  (Laws  1901,  chap.  173,  post,  page  470,  as  amended 
by  Laws  1911,  chap,  800,  in  effect  July  28, 1911.) 


28  THE   STATUTE 

§  241.  Report  of  state  comptroller,  payment  of  taxes; 

refunds  in  certain  cases 

The  state  comptroller  shall  deposit  all  taxes  collected 
by  him  under  this  article,  except  as  hereinafter  otherwise 
provided,  in  a  responsible  bank,  banking  house  or  trust 
company  in  the  city  of  Albany,  which  shall  pay  the  highest 
rate  of  interest  to  the  state  for  such  deposit,  to  the  credit 
of  the  state  comptroller  on  account  of  the  transfer  tax. 
And  every  such  bank,  banking  house  or  trust  company 
shall  execute  and  file  in  his  office  an  undertaking  to  the 
state,  in  the  sum,  and  with  such  sureties,  as  are  required 
and  approved  by  the  comptroller,  for  the  safe  keeping  and 
prompt  payment  on  legal  demand  therefor  of  all  such 
moneys  held  by  or  on  deposit  in  such  bank,  banking  house 
or  trust  company,  with  interest  thereon  on  daily  balances 
at  such  rate  as  the  comptroller  may  fix.  Every  such 
undertaking  shall  have  indorsed  thereon,  or  annexed 
thereto,  the  approval  of  the  attorney-general  as  to  its 
form.  The  state  comptroller  shall  on  the  first  day  of  each 
month  make  a  verified  return  to  the  state  treasurer  of  all 
taxes  received  by  him  under  this  article,  stating  for  what 
estate,  and  by  whom  and  when  paid;  and  shall  credit 
himself  with  all  expenditures  made  since  his  last  previous 
return  on  account  of  such  taxes,  for  salary,  refunds  or 
other  purposes  lawfully  chargeable  thereto.  He  shall 
on  or  before  the  tenth  day  of  each  month  pay  to  the  state 
treasurer  the  balance  of  such  taxes  remaining  in  his  hands 
at  the  close  of  business  on  the  last  day  of  the  previous 
month,  as  appears  from  such  returns.  Whenever  the 
tax  on  a  contingent  remainder  has  been  determined  at  the 
highest  rate  which  on  the  happening  of  any  of  said  con- 
tingencies or  conditions  would  be  possible  under  the 
provisions  of  this  article,  the  state  comptroller,  in  the 
counties  wherein  this  tax  is  payable  direct  to  him,  and  hi 
all  other  counties  the  treasurer  of  said  counties,  respec- 
tively, when  such  tax  is  paid  shall  retain  and  hold  to  the 
credit  of  said  estate  so  much  of  the  tax  assessed  upon  such 
contingent  remainders  as  represents  the  difference  between 
the  tax  at  the  highest  rate  and  the  tax  upon  such  re- 


§241,    REFUNDS   IN   CERTAIN   CASES  29 

mainders  which  would  be  due  if  the  contingencies  or 
conditions  had  happened  at  the  date  of  the  appraisal  of 
said  estate,  and  the  state  comptroller  or  the  county 
treasurer  shall  deposit  the  amount  of  tax  so  retained  in 
some  solvent  trust  company  or  trust  companies  or  savings 
banks  in  this  state,  to  the  credit  of  such  estate,  paying  the 
interest  thereon  when  collected  by  him  to  the  executor 
or  trustee  of  said  estate,  to  be  applied  by  said  executor 
or  trustee  as  provided  by  the  decedent's  will.  Upon  the 
happening  of  the  contingencies  or  conditions  whereby  the 
remainder  ultimately  vests  in  possession,  if  the  remainder 
then  passes  to  persons  taxable  at  the  highest  rate,  the 
state  comptroller  or  the  county  treasurer  shall  turn  over 
the  amount  so  retained  by  him  to  the  state  treasurer  as 
provided  herein  and  by  section  two  hundred  and  forty  of 
this^article,  or  if  the  remainder  ultimately  vests  in  persons 
taxable  at  a  lower  rate  or  a  person  or  corporation  exempt 
from  taxation  by  the  provisions  of  this  article,  the  state 
comptroller  or  the  county  treasurer  shall  refund  any  excess 
of  tax  so  held  by  him  to  the  executor  or  trustee  of  the 
estate,  to  be  disposed  of  by  said  executor  or  trustee  as 
provided  by  the  decedent's  will.  Executors  or  trustees  of 
any  estate  may  elect  to  assign  to  and  deposit  with  the 
state  comptroller  or  the  county  treasurer,  bonds  or  other 
securities  of  the  estate  approved  by  the  state  comptroller, 
or  the  county  treasurer,  both  as  to  the  form  of  the  collat- 
eral and  the  amount  thereof,  for  the  purpose  of  securing 
the  payment  of  the  difference  between  the  tax  on  said 
remainder  at  the  highest  rate  and  the  tax  upon  said  re- 
mainder which  would  be  due  if  the  contingencies  or  condi- 
tions had  happened  at  the  date  of  the  appraisal  of  said 
estate,  and  cash  for  the  balance  of  said  tax  as  assessed, 
which  said  bonds  or  other  securities  shall  be  held  by  the 
state  comptroller,  or  the  county  treasurer,  to  the  credit 
of  said  estate  until  the  actual  vesting  of  said  remainders, 
the  income  therefrom  when  received  by  the  state  comp- 
troller or  the  county  treasurer  to  be  paid  over  to  the 
executor  or  trustee  during  the  continuance  of  the  trust 
estates  and  then  to  be  finally  disposed  of  in  accordance 


30  THE   STATUTE 

with  the  ultimate  transfer  or  devolution  of  said  remain- 
ders as  hereinbefore  provided;  and  it  shall  be  the  duty  of 
the  executors  or  trustees  of  such  estates  to  forthwith 
notify  the  state  comptroller  of  the  actual  vesting  of  all 
such  contingent  remainders. 

If  any  executor  or  trustee  shall  have  deposited  with  the 
state  comptroller,  or  the  county  treasurer,  cash  or  securi- 
ties, or  both  cash  and  securities,  to  an  amount  in  excess 
of  the  sum  necessary  to  pay  the  transfer  tax  upon  such 
contingent  remainders  at  the  highest  rate  as  aforesaid, 
the  excess  of  tax  so  deposited  shall  be  returned  to  the 
executor  or  trustee,  or  if  any  executor  or  trustee  shall 
have  deposited  with  the  state  comptroller,  or  the  county 
treasurer,  cash  or  securities,  or  both  cash  and  securities, 
to  an  amount  less  than  is  sufficient  to  pay  the  tax  upon 
such  contingent  remainders  as  finally  assessed  and  de- 
termined, the  executor  or  trustee  of  said  estate  shall 
forthwith,  upon  the  entry  of  the  order  determining  the 
correct  amount  of  tax  due,  pay  to  the  state  comptroller, 
or  the  county  treasurer,  whichever  is  entitled  under  the 
provisions  of  this  article  to  receive  the  tax,  the  balance  due 
on  account  of  said  tax.  (Laws  1909,  chap.  62,  post,  page 
518,  amended  by  Laws  1911,  chap.  800,  post,  page  532,  in 
effect  July  28, 1911.} 

§  242.  Application  of  taxes 

All  taxes  levied  and  collected  under  this  article  when 
paid  into  the  treasury  of  the  state  shall  be  applicable  to  the 
expenses  of  the  state  government  and  to  such  other  pur- 
poses as  the  legislature  shall  by  law  direct.  (Laws  1901, 
chap.  173.} 

§  243.  Definitions 

The  words  "estate"  and  "property,"  as  used  in  this 
article,  shall  be  taken  to  mean  the  property  or  interest 
therein  passing  or  transferred  to  individual  or  corporate 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or 
vendees,  and  not  as  the  property  or  interest  therein  of  the 
decedent,  grantor,  donor  or  vendor  and  shall  include  all 
property  or  interest  therein,  whether  situated  within  or 


§244,   EXEMPTIONS   IN   ARTICLE   ONE   NOT  APPLICABLE      31 

without  this  state.  The  words  "tangible  property"  as 
used  in  this  article  shall  be  taken  to  mean  corporeal  prop- 
erty such  as  real  estate  and  goods,  wares  and  merchandise, 
and  shall  not  be  taken  to  mean  money,  deposits  in  bank, 
shares  of  stock,  bonds,  notes,  credits  or  evidences  of  an 
interest  in  property  and  evidences  of  debt.  The  words 
"intangible  property"  as  used  in  this  article  shall  be  taken 
to  mean  incorporeal  property,  including  money,  deposits 
in  bank,  shares  of  stock,  bonds,  notes,  credits,  evidences 
of  an  interest  in  property  and  evidences  of  debt.  The  word 
"transfer,"  as  used  in  this  article,  shall  be  taken  to  in- 
clude the  passing  of  property  or  any  interest  therein  in  the 
possession  or  enjoyment,  present  or  future,  by  inheritance, 
descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or 
gift,  in  the  manner  herein  prescribed.  The  words  "  county 
treasurer"  and  "district  attorney,"  as  used  in  this  article, 
shall  be  taken  to  mean  the  treasurer  or  the  district  attorney 
of  the  county  of  the  surrogate  having  jurisdiction  as  pro- 
vided in  section  two  hundred  and  twenty-eight  of  this 
article.  The  words  "the  intestate  laws  of  this  state,"  as 
used  in  this  article,  shall  be  taken  to  refer  to  all  transfers 
of  property,  or  any  beneficial  interest  therein,  effected  by 
the  statute  of  descent  and  distribution  and  the  transfer 
of  any  property,  or  any  beneficial  interest  therein,  effected 
by  operation  of  law  upon  the  death  of  a  person  omitting 
to  make  a  valid  disposition  thereof,  including  a  husband's 
right  as  tenant  by  the  curtesy  or  the  right  of  a  husband  to 
succeed  to  the  personal  property  of  his  wife  who  dies 
intestate  leaving  no  descendants  her  surviving.  (Laws 
1892,  chap.  399,  section  22,  post,  page  435,  as  amended  by 
Laws  1898,  chap.  88,  and  by  Laws  1910,  chap.  706,  post, 
page  524;  and  by  Laws  1911,  chap.  732,  post,  page  528,  in 
effect  July  21,  1911.) 

§  244.  Exemptions  in  article  one  not  applicable 

The  exemptions  enumerated  in  section  four  of  this 
chapter  shall  not  be  construed  as  being  applicable  in  any 
manner  to  the  provisions  of  this  article.  (Added  by  Laws 
1900,  chap.  382,  in  effect  April  11, 1900.) 


32  THE   STATUTE 

§  245.  Limitation  of  time 

The  provisions  of  the  code  of  civil  procedure  relative  to 
the  limitation  of  tune  of  enforcing  a  civil  remedy  shall 
not  apply  to  any  proceeding  or  action  taken  to  levy, 
appraise,  assess,  determine  or  enforce  the  collection  of  any 
tax  or  penalty  prescribed  by  this  article,  and  this  section 
shall  be  construed  as  having  been  in  effect  as  of  date  of 
the  original  enactment  of  the  inheritance  tax  law,  provided, 
however,  that  as  to  real  estate  in  the  hands  of  bona  fide 
purchasers,  the  transfer  tax  shall  be  presumed  to  be  paid 
and  cease  to  be  a  lien  as  against  such  purchasers  after  the 
expiration  of  six  years  from  the  date  of  accrual.  (Formerly 
§  282  of  Tax  Law,  added  to  Tax  Law  by  Laws  1899,  chap. 
737,  in  effect  May  26,  1899;  transferred  to  section  2^5  by 
Laws  1909,  chap.  62,  post,  page  519.) 


THE  TAXABLE  TRANSFER 

(1)  The  tax  is  on  the  transfer.         (5)  "Intestate  laws  of  this  state" 

(2)  Transfers     in     non-resident  defined. 

estates.  (6)  Time  of  transfer. 

(3)  The  statutory  definition.  (7)  Transfers  by  deed  for  a  con- 

(4)  Transfers  under  subd.  4  of  sideration. 

§220. 

(1)  The  tax  is  on  the  transfer 

"This  charge,"  said  Justice  Jenks  in  Matter  of  Moses, 
138  App.  Div.  525-526,  "for  convenience  called  a  tax 
(Matter  of  Hamilton,  148  N.  Y.  311),  is  upon  the  right  of 
succession,  not  upon  property,  made  on  the  theory  that 
succession  is  a  creation  of  the  law.  (Matter  of  Dows, 
167  N.  Y.  231.)  It  may  be  regarded  as  a  tribute  to  govern- 
ment that  establishes  and  maintains  that  right.  Logically 
enough,  it  appears  that  this  tax  in  Rome  went  into  a 
peculiar  treasury  for  the  pay  of  the  soldiery  of  Augustus." 

Chief  Justice  Cullen  defines  it  as  "a  tax  not  on  property, 
but  on  succession;  that  is  to  say,  a  tax  on  the  legatee  for  the 
privilege  of  succeeding  to  property."  Matter  of  Gihon, 
169  N.  Y.  443-447.  Justice  Collin  says  the  tax  is  imposed 
"upon  the  transfer  of  and  not  upon  the  property.  *  *  * 
It  is  in  the  nature  of  an  excise  tax  on  the  right  to  and 
method  of  transfer."  Matter  of  White,  208  N.  Y.  64-67. 

At  the  outset  it  may  be  fair  to  the  reader  to  quote  the 
words  of  Justice  Finch,  words  wrought  in  the  furnace  of 
experience.  "I  recall,"  he  said,  "that  I  have  somewhere 
spoken  of  the  danger  of  legal  definitions  because  almost 
certain  to  prove  incomplete  and  inaccurate."  Matter  of 
Hoffman,  143  N.  Y.  327-332.  No  sooner  does  one  grasp  a 
definition  of  this  tax  as  all-sufficient,  than  the  elusiveness 
of  a  final  definition  becomes  apparent. 

(2)  Transfers  in  non-resident  estates 

Non-resident  estates  are  not   taxed   upon   the  same 
theory  as  resident  estates,  for  as  was  said  by  Justice 
3  33 


34  THE   TAXABLE   TRANSFER 

Miller  in  Matter  of  Tiffany,  143  App.  Div.  327-334: 
"The  right  of  the  State  to  impose  transfer  taxes  on  the 
entire  estate  of  resident  decedents  and  on  the  property 
within  the  State  of  non-resident  decedents  necessarily 
depends  on  inconsistent  theories." 

Justice  Patterson  in  discussing  transfers  in  estates  of 
non-residents,  said:  "As  to  residents  the  transfer  tax  is 
on  the  succession;  but  as  to  non-residents  it  is  a  tax  on  the 
transfer  of  property  within  the  jurisdiction  of  the  court." 
Matter  of  Bishop,  82  App.  Div.  112-115;  Matter  of  Kissel, 
65  Misc.  443,  affirmed,  without  opinion,  142  App.  Div. 
934. 

The  subject  of  non-resident  estates  is  treated  post, 
page  133. 

(3)  The  statutory  definition 

The  statutory  definition  of  a  "transfer"  is  contained  in 
the  third  sentence  of  §243  which  reads:  "The  word 
'transfer'  as  used  in  this  article,  shall  be  taken  to  include 
the  passing  of  property  or  any  interest  therein  in  the 
possession  or  enjoyment,  present  or  future,  by  inheritance, 
descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or 
gift,  hi  the  manner  herein  prescribed." 

The  above  words  "in  the  manner  herein  prescribed" 
refer  to  §  220  which  provides,  in  estates  of  residents,  that 
a  tax  shall  "be  imposed  upon  the  transfer  of  any  tangible 
property  within  the  state  and  of  intangible  property," 
when  the  property  is  transferred  by  (a)  will,  (b)  intestate 
laws  of  this  state,  (c)  deed,  grant,  bargain,  sale  or  gift 
made  either 

(1)  In  contemplation  of  death,  or 

(2)  Intended  to  take  effect  in  possession  or  enjoyment  at 
or  after  death. 

If  the  transfer  is  effected  in  any  other  than  one  of  the 
four  ways  above  enumerated  it  is  without  the  statute  and 
is  not  subject  to  the  tax. 

As  to  the  tax  upon  a  transfer  by  the  exercise  of  a  power 
of  appointment  under  the  provisions  of  subdivision  6  of 
§  220  vide  post,  page  768. 


TRANSFERS   UNDER   SUBDIVISION   4   OF   §  220  35 

(4)  Transfers  under  subdivision  4  of  §  220 

There  has  been  considerable  litigation  relative  to  that 
portion  of  the  law  which  now  appears  under  subdivision  4 
of  §  220.  There  seems  to  be  in  the  minds  of  many  a  mis- 
understanding as  to  the  provisions  of  this  section,  due 
because  of  their  failure  to  appreciate  that  although  there  is 
but  one  sentence  in  this  section  it  deals  with  two  different 
cases.  Matter  of  Brandreth,  169  N.  Y.  437-441.  A  gift 
made  in  contemplation  of  death  is,  hi  the  intendment  of 
the  statute,  quite  distinct  from  a  gift  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  death.  A 
man  on  his  death  bed  may  give  and  deliver  to  his  son  se- 
curities of  large  value.  Such  a  gift  is  clearly  made  by 
the  father  to  the  son  hi  contemplation  and  expectation 
of  his  imminent  dissolution,  and  the  transfer  is  taxable. 
THE  WORDS  "IN  CONTEMPLATION  OF  THE  DEATH"  as 
used  in  subdivision  4  of  §  220  are  defined  in  Matter  of 
Baker,  83  App.  Div.  530,  affirmed,  on  opinion  below,  hi 
178  N.  Y.  575,  the  court  saying  at  page  533,  "the  words 
*in  contemplation  of  the  death,'  do  not  refer  to  that  gen- 
eral expectation  which  every  mortal  entertains,  but  rather 
the  apprehension  which  arises  from  some  existing  condi- 
tion of  body  or  some  impending  peril."  Vide  etiam  Matter 
of  Spaulding,  49  App.  Div.  541,  affirmed,  without  opinion, 
163  N.  Y.  607;  Matter  of  Crary,  31  Misc.  72-75;  Matter 
of  Price,  62  Misc.  149;  Matter  of  Mary  Delaney,  N.  Y. 
Law  Journal,  August  16,  1913,  opinion  quoted  post, 
page  645;  Matter  of  Dee,  id.,  Dec.  6,  1913,  post,  page  645. 

A    GIFT    INTENDED    TO    TAKE    EFFECT   in    possession    or 

enjoyment  at  or  after  death  may  be  illustrated  by  the 
instance  of  a  father  hi  robust  health,  but  mindful  of  the 
inevitable  end,  making  a  gift  to  his  son  of  a  large  amount 
of  property  reserving  to  himself,  however,  a  life  interest 
in  said  property.  This  is  not  a  gift  made  in  contemplation 
of  death  although,  of  course,  there  is  an  element  of  con- 
templation of  death  in  it  but  it  is  not  what  the  statute 
means.  This  is  the  sort  of  gift  which  the  courts  have 
construed  as  one  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  the  death  of  the  donor.  Matter  of 


36  THE   TAXABLE   TRANSFER 

Green,  153  N.  Y.  223 ;  Matter  of  Masury,  28  App.  Div.  580, 
affirmed,  without  opinion,  159  N.  Y.  532;  Matter  of  Bost- 
wick,  160  N.  Y.  489 ;  Matter  of  Cornell,  170  N.  Y.  423 ;  Mat- 
ter of  Keeney,  194  N.  Y.  281,  sustained  in  222  U.  S.  525,  sub 
nom.  Keeney  v.  New  York;  Matter  of  Dobson,  73  Misc.  170 ; 
Matter  of  William  C.  Schermerhorn,  N.  Y.  Law  Journal, 
June  26,  1913,  opinion  quoted  post,  page  869;  Matter  of 
Newman  Cowan,  id.,  July  24,  1913,  opinion  quoted  post, 
page  699.  Vide  etiam  Matter  of  Pitou,  79  Misc.  384; 
Matter  of  Halligan,  82  id.  30,  and  other  cases  cited  sub 
Property  Held  in  Trust  or  Jointly,  post,  page  787. 

(6)  "  Intestate  laws  of  this  state  "  defined 

It  must  be  borne  in  mind  that  after  the  decisions  in  the 
cases  of  Matter  of  Starbuck,  63  Misc.  156  (1909),  affirmed, 
201  N.  Y.  531,  and  Matter  of  Green,  144  App.  Div.  232 
(1911),  the  legislature  broadened  the  meaning  of  the  words 
"intestate  laws  of  this  state"  by  adding  to  the  definitions 
contained  in  §243  the  following  sentence:  "The  words 
'the  intestate  laws  of  this  state/  as  used  in  this  article, 
shall  be  taken  to  refer  to  all  transfers  of  property,  or  any 
beneficial  interest  therein,  effected  by  the  statute  of 
descent  and  distribution  and  the  transfer  of  any  property, 
or  any  beneficial  interest  therein,  effected  by  operation  of 
law  upon  the  death  of  a  person  omitting  to  make  a  valid 
disposition  thereof,  including  a  husband's  right  as  tenant 
by  the  curtesy  or  the  right  of  a  husband  to  succeed  to  the 
personal  property  of  his  wife  who  dies  intestate  leaving  no 
descendants  her  surviving."  Laws  of  1911,  chapter  732, 
in  effect  July  21, 1911. 

The  legislature  in  the  foregoing  amendment  confined  it- 
self to  a  definition  of  the  words  "the  intestate  laws  of  this 
state"  contained  in  subdivision  1  of  §  220,  and  made  no 
reference  to  the  words  of  subdivision  2  which  relate  to 
the  intestate  law  of  other  states  and  countries.  The 
courts  have  not  yet  passed  upon  the  question  as  to  whether 
the  said  1911  amendment  to  §  243  changes  the  rule  of 
the  Starbuck  and  Green  cases,  supra,  so  far  as  the  estate 
of  a  non-resident  intestate  is  concerned.  The  Starbuck 


TRANSFERS   BY   DEED    FOR  A   CONSIDERATION  37 

case  held  that  a  husband's  right  as  tenant  by  the  curtesy 
was  not  subject  to  the  tax,  and  a  like  ruling  was  made  in 
the  Green  case  as  to  the  right  of  a  husband  to  succeed  to 
the  personal  property  of  his  wife  who  dies  intestate  leaving 
no  descendants  her  surviving. 

(6)  Time  of  transfer 

Where  the  transfer  is  by  will  or  by  the  intestate  laws  the 
tune  of  transfer  is  the  death  of  the  decedent.  Matter  of 
Vassar,  127  N.  Y.  1-8;  Matter  of  Seamen,  147  id.  69-74; 
Matter  of  Davis,  149  id.  539-547;  Matter  of  Smith,  150 
App.  Div.  805-809. 

The  state  by  means  of  the  inheritance  tax  "reaches  out 
and  appropriates  for  its  use  a  portion  of  the  property  at 
the  moment  of  its  owner's  decease;  allowing  only  the 
balance  to  pass  in  the  way  directed  by  the  testator,  or 
permitted  by  its  intestate  law."  Matter  of  Swift,  137 
N.  Y.  77-84. 

As  to  transfers  taxable  under  the  provisions  of  sub- 
division 4  of  §  220  vide  Matter  of  Atterbury,  N.  Y.  Law 
Journal,  March  25,  1913,  opinion  quoted  post,  page  871; 
Matter  of  Webber,  151  App.  Div.  539;  Matter  of  Keeney, 
194  N.  Y.  281-287,  sustained  in  222  U.  S.  525,  sub  nom. 
Keeney  v.  New  York;  Matter  of  D wight,  N.  Y.  Law 
Journal,  October  8, 1911,  (opinion  quoted  sub  Trust  Deed 
post,  page  872),  affirmed,  without  opinion,  149  App.  Div. 
912;  Matter  of  Agnew,  id.,  Dec.  13,  1913,  post,  page  53. 

(7)  Transfers  by  deed  for  a  consideration 

In  Matter  of  Keeney,  supra,  Chief  Justice  Cullen  in 
discussing  the  question  of  the  taxability  of  a  transfer  by 
deed  intended  to  take  effect  in  possession  and  enjoyment 
at  the  death  of  the  grantor  (subdivision  4,  §  220)  uttered 
this  dictum,  page  286:  "It  may  be  also  observed  that  if 
the  statute  is  to  be  construed  as  applicable  only  to  volun- 
tary transfers  or  gifts,  as  to  which  we  express  no  opin- 
ion. *  *  *"  It  will  be  observed  that  this  dictum  casts 
a  doubt  as  to  whether  the  statute  is  to  be  interpreted  as 
embracing  only  transfers  without  a  consideration.  How- 


38  THE    TAXABLE   TRANSFER 

ever,  with  the  exception  of  transfers  by  will,  an  examina- 
tion of  the  cases  discloses  that  the  courts  have  so  far  con- 
strued the  statute  as  applicable  only  to  voluntary  transfers 
or  gifts. 

TRANSFERS  BY  WILL  discussed  in  Matter  of  Gould,  156 
N.  Y.  423;  Matter  of  Kidd,  188  N.  Y.  274;  etiam  Matter  of 
Demers,  41  Misc.  470;  Matter  of  Rogers,  71  App.  Div. 
461-465,  affirmed,  on  opinion  below,  172  N.  Y.  617; 
Matter  of  Riemann,  42  Misc.  648-650;  Matter  of  Edson, 
38  App.  Div.  19,  affirmed,  on  opinion  below,  159  N.  Y. 
568. 

"It  is  very  evident  that  the  word  'deed'  as  used  in  this 
act  (present  §  220,  subd.  4)  has  no  reference  to  conveyance 
of  property  by  such  an  instrument  made  in  the  ordinary 
course  of  business  for  a  valuable  consideration,  but  is 
confined  to  conveyances  of  real  property  intended  as 
gifts."  Matter  of  Birdsall,  22  Misc.  180-193,  affirmed, 
without  opinion,  43  App.  Div.  624. 

In  Matter  of  Spaulding,  49  App.  Div.  541-546,  affirmed, 
without  opinion,  163  N.  Y.  607,  the  court  say:  "If  a 
person,  fully  realizing  that  his  death  is  to  occur  within  a 
few  hours,  should  convey  by  deed  real  estate  and  receive 
the  full  consideration  therefor,  it  would  not  be  claimed  that 
the  real  estate  so  conveyed  would  be  subject  to  the  tax 
in  question,  notwithstanding  the  conveyance  was  clearly 
made  in  contemplation  of  death.  Or,  if  a  person  under 
such  circumstances  should  transfer  personal  property  in 
payment  of  a  just  debt,  and  with  the  avowed  purpose  of 
having  the  matter  adjusted  before  his  death,  the  statute 
would  not  apply,  and  yet  the  transaction  would  be  within 
its  provisions  if  literally  construed."  Vide  etiam  Matter 
of  Miller,  77  App.  Div.  473-480;  Matter  of  Dobson,  73 
Misc.  170-174. 

Surrogate  Brown,  Monroe  County,  said  in  Matter  of 
Stebbins,  52  Misc.  438-443:  "The  statute  has  no  refer- 
ence to  transfers  made  upon  a  valuable  consideration, 
but  it  relates  merely  to  voluntary  transfers  without  con- 
sideration; for  the  tax,  as  above  stated,  is  not  upon  prop- 
erty but  upon  the  right  of  succession." 


TRANSFERS   BY   DEED    FOR  A    CONSIDERATION  39 

In  Matter  of  Heiser,  N.  Y.  Law  Journal,  July  19,  1913, 
Surrogate  Fowler  said,  "The  transfer  tax  statute  does  not 
impose  a  tax  upon  a  transfer  of  property  which  is  made  for 
a  valuable  consideration." 


RATES  OF  TAX  AND  EXEMPTIONS 


(1)  Exemptions  under  §  221. 

(2)  Extend   to   foreign   corpora- 

tions. 

(3)  Personal  property  other  than 

money  or  securities. 

(4)  Exemption  should  be  claimed 

at  time  of  appraisal. 

(5)  Amendments. 

(6)  Section  2216  added  by  Laws 

of  1913. 

(7)  Graded   ra^es  of  tax  under 

§  221a. 

(8)  Relationship    of  beneficiary. 

(9)  Exercise  of  Power  of  Appoint- 

ment. 

(10)  Taxable  amount  passing  to 

each      beneficiary      deter- 
mines rate  of  tax. 


(11)  Beneficiaries    divided    into 

two  classes  by  §  221a. 

(12)  Subdivision  1  of  §  221o. 

(13)  Subdivision  2  of  §  221a. 

(14)  Method  of  computing  tax. 

(15)  Beneficiary    enumerated    in 

subdivision  1. 

(16)  Beneficiary   under   subdivi- 

sion 2. 

(17)  Table     showing     rates     of 

tax. 

(18)  Order  fixing  tax. 

(19)  Computation  of  tax. 

(20)  When  exemption  prorated. 

(21)  Non-resident  estate. 

(22)  Rates   of   tax   under   prior 

statutes. 

(23)  Trust  Deed. 


The  statutory  provisions  relative  to  exemptions  and 
the  rates  of  tax  are  contained  in  the  three  sections  221, 
221a  and  221b,  supra,  page  5. 

(l)  Exemptions  under  §  221 

The  exemptions  granted  by  section  221  are  of  two 
classes.    The  first  gives  an  absolute  exemption  of  any  prop- 
erty of  whatsoever  kind,  including  money,  no  matter  of 
what  amount,  that  may  be  devised  or  bequeathed  for 
religious  ceremonies,  obser- 
vances or  commemorative 
services  of  or  for  the  de- 
ceased donor 
or  to 

any  person  who  is  a  bishop 
or  to  the  following  corporations 

religious  educational 

charitable  missionary 

benevolent  hospital 

infirmary 
40 


PERSONAL  PROPERTY  OTHER  THAN  MONEY,  ETC.   41 

including 

corporations  organized  corporations  organized 

exclusively  for  Bible  for  the  enforcement  of 

or  tract  purposes  laws  relating  to  chil- 

dren or  animals. 

(2)  Extend  to  foreign  corporations 

This  exemption  applies  not  only  to  New  York  corpora- 
tions of  the  character  indicated  but  also  to  corporations 
organized  under  the  laws  of  other  states,  the  law  having 
been  amended  by  chapter  732,  Laws  of  1911,  in  effect 
July  21,  1911,  so  as  to  include  foreign  corporations.  A 
bishop  who  was  a  nonresident  was  entitled  to  the  exemp- 
tion even  under  the  old  law.  Matter  of  Palmer,  33  App. 
Div.  307,  affirmed,  on  opinion  below,  158  N.  Y.  669. 

(3)  Personal  property  other  than  money  or  securities 

LIMITED  EXEMPTIONS.  The  other  class  of  exemptions 
is  set  forth  in  the  second  sentence  of  section  221,  and  ex- 
tends only  to  bequests  of  "personal  property  other  than 
money  or  securities."  This  restricted  exemption  is  granted 
to  a  corporation  or  association  organized  exclusively  for 

the  moral  or  mental  improve-         scientific 

ment  of  men  or  women 

literary  library 

patriotic  cemetery 

historical 

"purposes  or  for  two  or  more  of  such  purposes  and  used 
exclusively  for  carrying  out  one  or  more  of  such  purposes." 
The  exemption  is  given  to  corporations  or  associations  of 
the  character  indicated  wherever  incorporated  or  located. 
It  should  be  borne  in  mind,  however,  that  no  such  cor- 
poration or  association  shall  be  entitled  to  these  exemp- 
tions "if  any  officer,  member  or  employee  thereof  shall 
receive  or  may  be  lawfully  entitled  to  receive  any  pecun- 
iary profit  from  the  operations  thereof  except  reasonable 
compensation  for  services  in  effecting  one  or  more  of  such 
purposes  or  as  proper  beneficiaries  of  its  strictly  charitable 
purposes;  or  if  the  organization  thereof  for  any  such  avowed 


42  RATES   OF  TAX   AND   EXEMPTIONS 

purpose  be  a  guise  or  pretense  for  directly  or  indirectly 
making  any  other  pecuniary  profit  for  such  corporation  or 
association  or  for  any  of  its  members  or  employees  or  if  it 
be  not  in  good  faith  organized  or  conducted  exclusively 
for  one  or  more  of  such  purposes." 

(4)  Exemptions  should  be  claimed  at  time  of  appraisal 
Where  there  has  been  a  legacy  or  a  bequest  which  is  en- 
titled to  the  exemption  under  section  221  the  exemption 
should  be  claimed  by  the  beneficiary  at  the  tune  of  the 
appraisal  of  the  estate  by  the  transfer  tax  appraiser.    Mat- 
ter of  Townsend,  153  App.  Div.  85-86;  Matter  of  Neu- 
stadter,  N.  Y.  Law  Journal,  August  16,  1913.    This  claim 
should  be  made  by  affidavit  setting  forth  the  basis  upon 
which  the  claim  is  made.    For  form  of  affidavit  vide  post, 
page  687. 

(5)  Amendments 

The  policy  of  the  state  of  New  York  has  steadily  in- 
creased the  scope  of  the  exemptions  granted  under  sec- 
tion 221.  The  statutory  amendments  and  the  decisions 
affecting  exemptions  and  rates  of  tax  are  discussed,  post, 
pages  685  and  808. 

The  present  section  221a  has  been  the  law  since  July  21, 

1911.  Section  221  has  been  amended  three  times  since 
that  date.    Laws,  1912,  chapter  206;  Laws,  1913,  chapter 
356,  and  Laws,  1913,  chapter  795. 

By  the  Laws  of  1912,  chapter  206,  in  effect  April  8, 

1912,  corporations  organized  for  the  enforcement  of  laws 
relating  to  children  or  animals  were  transferred  from  the 
class  entitled  to  the  limited  exemptions  to  the  class  en- 
titled to  the  complete  exemptions. 

On  April  24,  1913  (Laws  of  1913,  chapter  356),  there 
was  inserted  in  said  section  221  the  following  provision: 

"  There  shall  also  be  exempted  from  and  not  subject 
to  the  provisions  of  this  article  bonds  or  other  obligations 
issued  by  the  state  of  New  York,  provided,  however,  that 
such  bonds  or  other  obligations  are  registered  in  the  name 
of  the  decedent  at  the  time  of  death,  or  in  the  name  of  one 


RELATIONSHIP   OF  BENEFICIARY"  43 

or  more  persons  or  corporations  in  trust  for  such  decedent 
at  the  time  of  such  decedent's  death." 

Above  provision  was  repealed  on  June  17, 1913  (Laws  of 
1913,  chapter  795).  In  estates  of  persons  who  died  while 
said  provision  was  in  force  the  transfers  of  bonds  or  other 
obligations  issued  by  the  state  of  New  York  are  exempt 
from  inheritance  taxation,  provided  they  were  registered 
as  therein  required. 

(6)  Section  221b  added  by  Laws  of  1913 

SECTION  221b  provides  that  "A  transfer  of  pictures, 
statuary,  works  of  art,  antiques',  books,  manuscripts  or 
other  similar  personal  property  shall  be  exempted  from 
and  not  subject  to  the  provisions  of  this  article,  if  within 
two  years  after  such  transfer  the  person  to  whom  such 
transfer  is  made  shall  present  the  same  to  the  state,  or  to 
a  municipal  corporation  of  the  state  for  educational, 
scientific,  literary,  library,  or  historical  purposes;  and  if 
the  tax  thereon  shall  have  been  theretofore  paid  the 
amount  thereof  shall  be  refunded  in  accordance  with  the 
provisions  of  this  article."  This  provision  is  entirely  new 
to  the  statute,  having  been  added  by  chapter  639  of  the 
Laws  of  1913,  in  effect  May  24,  1913. 

(7)  Graded  rates  of  tax  under  §  221a 

On  July  11,  1910  (Laws  of  1910,  chapter  706,  post, 
page  521)  was  put  in  effect  for  the  first  time  in  the  state  of 
New  York  the  principle  of  graded  rates  of  taxes,  the  rates 
ranging  from  one  per  cent  to  twenty-five  per  cent.  This 
period,  sometimes  called  the  "  Reign  of  Terror,"  lasted 
one  year  and  ten  days,  coming  to  an  end  on  July  21,  1911 
(Laws  of  1911,  chapter  732)  when  the  graded  rates,  al- 
though continued,  were  reduced  so  that  in  no  case  do 
they  exceed  eight  per  cent  (section  22 la) 

(8)  Relationship  of  beneficiary 

The  relationship  of  the  beneficiary  to  the  decedent  and 
the  value  of  the  taxable  property  passing  from  the  de- 
cedent to  the  beneficiary  determine  the  rate  of  tax  as  well 
as  the  amount  of  the  exemption. 


44  RATES   OF   TAX   AND    EXEMPTIONS 

ASSIGNMENT  of  gift  by  beneficiary  does  not  change 
rate  of  tax.  Matter  of  Cook,  187  N.  Y.  253-260,  post, 
page  336. 

If  the  legatee  or  devisee  "RENOUNCE  THE  GIFT  and 
refuse  to  receive  it,  no  tax  can  be  collected  with  respect 
to  him  because  there  has  been  no  transfer  to  him."  Mat- 
ter of  Wolfe,  89  App.  Div.  349,  affirmed,  without  opinion, 
179  N.  Y.  599,  post,  page  297. 

May  renounce  as  to  part  of  legacy.  Matter  of  Merritt, 
155  App.  Div.  228-232. 

(9)  Exercise  of  power  of  Appointment 

When  there  is  a  power  of  appointment  the  relationship 
of  the  beneficiary  to  the  donee  determines  the  rate  of  tax 
and  exemption  "in  the  same  manner  as  though  the  prop- 
erty to  which  such  appointment  relates  belonged  ab- 
solutely to  the  donee  of  such  power  and  had  been  be- 
queathed or  devised  by  such  donee  by  will."  Matter  of 
Rogers,  71  App.  Div.  461-465,  affirmed,  on  opinion  below, 
172  N.  Y.  617;  Isham  v.  N.  Y.  Association  for  the  Poor, 
177  N.  Y.  218;  section  220,  subdivision  6.  The  legislature 
has  not  provided  for  the  possible  difficulty  in  the  case  of 
two  donees  of  the  power,  of  different  relationship  to  the 
appointee.  Matter  of  Walworth,  66  App.  Div.  171-175. 

(10)  Taxable  amount  passing  to  each  beneficiary  deter- 
mines rate  of  tax 

The  value  of  the  property  of  the  decedent  in  the  aggre- 
gate is  not  what  determines  the  rate  of  tax  but  it  is  the 
taxable  amount  passing  to  each  individual  beneficiary. 
The  reverse  used  to  be  the  rule,  the  change  having  been 
made  on  July  11,  1910,  by  amendment  to  section  243 
(Laws  of  1910,  chapter  706). 

If  a  beneficiary  receives  property  some  of  which  is  sub- 
ject to  the  tax  and  some  not,  it  is  the  transfer  of  the  prop- 
erty subject  to  the  tax  which  determines  the  rate.  For 
instance,  the  value  of  the  total  property  passing  to  a  bene- 
ficiary amounts  to  one  hundred  thousand  dollars,  of  which 
one  half  is  real  estate  and  goods,  wares  and  merchandise 


SUBDIVISION    1    OF   §  221a  45 

situated  without  the  state  and  therefore  not  subject  to 
the  tax.  §§  220  and  243.  The  remaining  half  would  de- 
termine the  rate  of  tax,  and  the  tax  on  the  transfer  would 
be  on  the  basis  of  a  transfer  of  the  value  of  fifty  thousand 
dollars  and  not  on  the  basis  of  a  transfer  of  one  hundred 
thousand  dollars. 

(11)  Beneficiaries  divided  into  two  classes  by  §  22 la 
Section  221a  divides  beneficiaries  into  two  classes,  plac- 
ing the  favored  ones  in  subdivision  1  and  all  others  hi  sub- 
division 2.    The  first  five  thousand  dollars  of  transfer  to 
any  of  the  persons  mentioned  in  the  first  subdivision  is 
exempt,  while  the  persons  in  the  second  subdivision  are 
given  an  exemption  of  one  thousand  dollars. 

For  instance,  if  a  person  who  died  possessed  of  a  net 
estate  of  one  hundred  thousand  dollars  should  leave  it  by 
his  will  to  one  hundred  people  in  equal  shares,  there  would 
be  no  tax.  If  he  should  leave  it  in  equal  shares  to  twenty 
persons  who  come  within  the  terms  of  subdivision  1  of 
section  221a,  there  would  be  no  tax.  On  the  other  hand, 
if  he  gave  the  entire  one  hundred  thousand  dollars  to  a 
single  individual  who  was  one  of  those  mentioned  in  sub- 
division 1,  the  first  five  thousand  dollars  would  be  exempt 
and  there  would  be  a  tax  of  one  thousand  four  hundred 
dollars  on  the  remaining  ninety-five  thousand  dollars;  and 
if  to  a  single  individual  other  than  those  enumerated  in 
the  said  subdivision  1,  the  first  one  thousand  dollars  would 
be  exempt  and  there  would  be  a  tax  of  five  thousand  four 
hundred  and  forty  dollars  on  the  remaining  ninety-nine 
thousand  dollars. 

(12)  Subdivision  1  of  §  221a 

PERSONS  ENTITLED  TO  LOWER  RATES.  The  only  persons 
who  are  entitled  to  the  five  thousand  dollar  exemption 
and  the  lower  rates  of  subdivision  1,  section  22 la,  are: 

father  mother 

husband  wife 

child  brother 

sister  wife  of  a  son 


46  RATES   OF   TAX   AND   EXEMPTIONS 

widow  of  a  son  husband  of  a  daughter 

child  adopted  as  such     any  lineal  descendent  born 

in    conformity    with     in  lawful  wedlock 

the  laws  of  this  state 

child  to  whom  decedent  for 

not    less    than    ten    years 

prior  to  the  transfer  stood 

hi  the  mutually  acknowledged 

relation  of  a  parent,  provided, 

however,  such  relationship 

began    at    or    before    the 

child's    fifteenth    birthday 

and  was  continuous  for  ten 

years  thereafter 

A  WIDOW  OF  AN  ADOPTED  SON  is  a  "widow  of  a  son" 
within  the  meaning  and  intendment  of  those  words  as 
used  in  said  subdivision  1,  and  is  entitled  to  the  benefit  of 
the  exemption  and  the  rates.  Matter  of  Duryea,  128  App. 
Div.  205.  A  child  of  an  adopted  child  is  in  law  considered 
a  lineal  descendent  of  the  foster-parent  and  entitled  to 
the  rates  and  exemption  of  a  lineal  descendent.  Matter 
of  Cook,  187  N.  Y.  253-261.  Husband  of  a  deceased 
daughter  is  entitled  to  the  exemptions  and  rates  even 
though  he  has  married  again.  Matter  of  Ray,  13  Misc. 
480. 

DIVORCED  wife  of  a  son  is  not  entitled  to  the  rates  and 
exemption  of  this  subdivision  although  the  divorce  was 
obtained  by  the  wife  against  the  son.  Matter  of  Merritt, 
155  App.  Div.  228.  The  same  rule  applies  to  ILLEGITIMATE 
CHILDREN,  Matter  of  Beach,  154  N.  Y.  242-248,  and  also 
to  the  children  of  an  illegitimate  child  who  themselves 
were  born  in  lawful  wedlock.  Matter  of  Roebuck,  79 
Misc.  589. 

RELATIVES  OF  THE  HALF  BLOOD.  If  the  transfer  is  of 
personal  property  relatives  of  the  half  blood  have  the  same 
exemptions  as  the  representatives  of  the  whole  blood. 
Subdivision  13,  section  98  of  Decedent  Estate  Law,  post, 
page  555. 
If  the  transfer  is  of  real  property  it  would  appear  that 


METHOD    OF   COMPUTING   TAX  47 

the  provisions  of  section  90  of  the  Decedent  Estate  Law 
would  govern.  The  question  seems  not  to  have  been 
passed  upon  in  the  reported  decisions.  The  section  reads : 
"Relatives  of  the  half-blood  and  their  descendants,  shall 
inherit  equally  with  those  of  the  whole  blood  and  their 
descendants,  hi  the  same  degree,  unless  the  inheritance 
came  to  the  intestate  by  descent,  devise  or  gift  from  an 
ancestor;  in  which  case  all  those  who  are  not  of  the  blood 
of  such  ancestor  shall  be  excluded  from  such  inheritance." 

(13)  Subdivision  2  of  §  221a 

HIGHER  RATES  TO  THOSE  NOT  ENUMERATED.  All  those 
not  enumerated  in  the  first  subdivision  fall  within  the  pro- 
visions of  subdivision  2  of  section  22 la.  Where  a  person 
dies  intestate  and  his  heirs  and  next  of  kin  are  unknown 
the  tax  is  at  the  highest  rate.  Matter  of  Lind,  132  App. 
Div.  321,  affirmed,  without  opinion,  196  N.  Y.  570. 

(14)  Method  of  computing  tax 

Considerable  doubt  at  first  existed  regarding  the  method 
of  computing  the  tax  and  exemptions  under  the  present 
act,  the  surrogates  of  the  different  counties  construing  the 
statute  in  various  ways.  The  subject  has  now  been  set 
at  rest  by  the  Court  of  Appeals  in  Matter  of  Schwarz,  209 
N.  Y.  mem.,  post,  page  399,  which  overrules  Matter  of 
Elletson,  75  Misc.  582. 

(15)  Beneficiary  enumerated  in  subdivision  1 

If  a  man  should  give  by  his  will  the  sum  of  four  thousand 
five  hundred  dollars  to  his  brother  there  would  be  no  tax 
at  all.  If  he  should  give  him  five  thousand  five  hundred 
dollars  there  would  be  a  tax  of  five  dollars  on  five  hundred 
dollars.  Matter  of  Schwarz,  supra;  Matter  of  Eaton,  79 
Misc.  69;  Matter  of  Kip,  N.  Y.  Law  Journal,  March  28, 
1912,  opinion  quoted  post,  page  400. 

Where  the  money  or  the  value  of  the  property  subject 
to  the  tax  is  above  fifty-five  thousand  dollars  then  the 
principle  of  the  graded  rates  begins  to  work.  Above  fifty- 
five  thousand  dollars  the  next  two  hundred  fifty  thousand 
dollars  is  taxable  at  two  per  cent;  above  three  hundred 


48  RATES   OF   TAX   AND   EXEMPTIONS 

five  thousand  dollars  the  next  one  million  dollars  is  tax- 
able at  three  per  cent,  and  all  above  one  million  three  hun- 
dred five  thousand  dollars  the  tax  is  at  the  rate  of  four 
per  cent. 

The  application  of  this  can  best  be  illustrated  by  a 
hypothetical  case.  Assume  that  the  transfer  of  property 
subject  to  the  tax  from  the  estate  of  his  brother  is  of  the 
value  of  two  million  three  hundred  thousand  dollars. 
The  transfer  tax  would  be  seventy-five  thousand  three 
hundred  dollars,  calculated  as  follows: 

$       5,000 exempt 

50,000  at  1% $     500 

250,000  at  2% 5,000 

1,000,000  at  3% 30,000 

995,000  at  4% 39,800 


$2,300,000  $75,300 

(16)  Beneficiary  under  subdivision  2 

The  same  principle  applies  to  those  persons  who  are 
not  included  in  subdivision  1,  except  that  the  rates  com- 
mence at  five  per  cent  and  run  up  to  eight  per  cent,  and 
the  amount  of  the  exemption  is  one  thousand  dollars  in- 
stead of  five  thousand  dollars.  Assume  that  the  transfer  of 
property  subject  to  the  tax  to  a  nephew  (subdivision  2  of 
section  221a)  from  the  estate  of  his  uncle  is  of  the  value  of 
two  million  three  hundred  thousand  dollars.  The  transfer 
tax  would  be  one  hundred  sixty-seven  thousand  four 
hundred  twenty  dollars,  calculated  as  follows: 

$       1,000 exempt 

50,000  at  5% $    2,500 

250,000  at  6% 15,000 

1,000,000  at  7% 70,000 

999,000  at  8% 79,920 


$2,300,000  $167,420 

(17)  Table  showing  rates  of  tax 

Assume  that  the  entire  property  subject  to  the  tax  is  of 
the  value  of  six  million  seven  hundred  ninety  thousand 
dollars,  and  that  it  is  divided  by  the  will  of  the  decedent 
as  set  forth  below.  The  total  tax  on  the  six  million  eight 


TABLE    SHOWING   RATES   OF   TAX 


49 


hundred  ninety  thousand  dollars  thus  distributed  would 
be  three  hundred  four  thousand  four  hundred  ninety  dol- 
lars, calculated  as  follows: 


Value    Amount    Amount  of 
Beneficiary  of     of  Interest    Interest      Rate 


Tax 


Father  . 

Interest 
$       5000 

Exempt 
$  5000 

Taxable 

0 

Mother  

50,000 

5,000 

$     45  000    1% 

$       450 

Husband  

75,000 

5,000 

50,000    1% 

Brother  

305,000 

5,000 

20,000    2% 
50  000    1% 

900 

Sister  

325,000 

5,000 

250,000    2% 
50,000    1% 

5,500 

Daughter.  

1,305,000 

5,000 

250,000    2% 
20,000    3% 
50,000    1% 

6,100 

Son  

1,325,000 

5,000 

250,000    2% 
1,000,000    3% 
50,000    1% 

35,500 

Aunt  

1,000 

1,000 

250,000    2% 
1,000,000    3% 
20,000    4% 
0    — 

36,300 
0 

Not  related  
Not  related  

1,000 
4,000 

1,000 
1,000 

0    — 
3,000    5% 

0 
150 

Nephew  

5,000 

1000 

4,000    5% 

200 

Niece  

50,000 

1,000 

49,000    5% 

2,450 

Uncle             .... 

75,000 

1  000 

50000    5% 

Cousin  

301,000 

1,000 

24,000    6% 
50,000    5% 

3,940 

Grandmother  .  .  . 
Grandniece  

321,000 
1,301,000 

1,000 
1,000 

250,000    6% 
50,000    5% 
250,000    6% 
20,000    7% 
50,000    5% 

17,500 
18,900 

Grandnephew.  .  . 

Charitable 
Corporation.  .  . 

1,321,000 
20,000 

1,000 
20,000 

250,000    6% 
1,000,000    7% 
50,000    5% 
250,000    6% 
1,000,000    7% 
20,000    8% 

20,000    — 

87,500 

89,100 
0 

$6,790,000 

$304,490 

50 


RATES   OF   TAX   AND   EXEMPTIONS 


(18)  Order  fixing  tax 

An  illustration  of  the  application  of  section  22 la  is  af- 
forded in  the  following  order: 

"At  a  Surrogates'  Court  held  in 
and  for  the  County  of  New  York, 
at  the  Hall  of  Records,  in  the  Bor- 
ough of  Manhattan,  City  of  New 
York,  on  the  1st  day  of  August,  1913. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 


Order  fixing  Tax. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of 
JOHN  JACOB  ASTOR, 

Deceased. 

Upon  reading  the  report  of  the  appraiser  John  V. 
Coggey,  Esq.,  duty  filed  herein  on  the  14th  day  of  June, 
1913,  wherein  it  appears  that  the  said  decedent  died  on 
the  15th  day  of  April,  1912,  and  upon  motion  of  Carter, 
Ledyard  and  Milburn,  attorneys  for  the  executors, 

IT  is  ORDERED  AND  ADJUDGED  that  the  cash  value  of  the 
properties  referred  to  in  said  report,  the  transfer  of  which 
is  subject  to  the  tax  imposed  by  the  act  in  relation  to  tax- 
able transfers  and  the  tax  to  which  such  transfer  is  liable 
is  as  follows: 


Beneficiary 


New  York  Yacht  Club ! 

James  S.  Armstrong 

James  Roosevelt  Roosevelt 

Douglas  Robinson 

Nicholas  Biddle 

Robert  H.  M.  Ferguson 

William  A.  Dobbyn 

Thomas  Hade 

Herbert  A.  Pinkham 

Madeleine  Talmage  Force  Astor 7,673,896.00 

Ava  Alice  Muriel  Astor 4,851,758.00 

John  Jacob  Astor 2,917,672.00 

William  Vincent  Astor 68,959,599.80 


Cash  Value  of 
interest  the 
transfer  of 
which  is  taxable 
$  500.00 

29,000.00 
19,000.00 
19,000.00 
19,000.00 
9,000.00 
24,000.00 
9,000.00 
9,000.00 


Tax  assessed 
thereon 

$  25.00 

1,450.00 

950.00 

950.00 

950.00 

450.00 

1,200.00 

450.00 

450.00 

290,455.84 

177,570.32 

100,206.88 

2,741,883.99 


JOHN  P.  COHALAN,  Surrogate.' 


COMPUTATION   OF   TAX 


51 


It  is  sometimes  the  practice  to  set  forth  in  the  order 
only  the  taxable  interest  passing  to  the  beneficiaries.  To 
illustrate,  the  legacy  to  the  New  York  Yacht  Club  was 
one  thousand  five  hundred  dollars  of  which  one  thousand 
dollars  was  exempt,  leaving  five  hundred  dollars  as  the 
taxable  amount  of  the  legacy  to  be  set  forth  in  the  order 
fixing  the  tax.  The  legacy  of  thirty  thousand  dollars  to 
St.  Paul's  School  of  Concord  was  reported  exempt  by  the 
appraiser  under  the  provisions  of  the  first  sentence  of 
section  221,  and  therefore  does  not  appear  hi  the  taxing 
order  of  the  surrogate. 

(19)  Computation  of  tax 

The  total  tax  of  three  million,  three  hundred  sixteen 
thousand,  nine  hundred  ninety-two  dollars  and  three 
cents  was  calculated  as  follows: 


Beneficiary 

New  York  Yacht 
Club 1 

St.  Paul's  School. . 

J.  S.  Armstrong. . . 

J.  R.  Roosevelt.  .  . 

Douglas  Robinson . 

Nicholas  Biddle.  . . 

R.  H.  M.  Ferguson 

Wm.  A.  Dobbyn. . 

Thomas  Hade 

H.  A.  Pinkham.  .  . 

Madeline  Talmage 
Force  Astor  . . 


Ava  Alice  Muriel 
Astor.  . 


Amount 

of  Amount  of 
Value  of      Interest       Interest 
Interest      Exempt       Taxable 


Rate        Tax 


1,500 

$1,000  $ 

500 

5%$ 

25.00 

30,000 

30,000 

0 

0.00 

30,000 

1,000 

29,000 

5% 

1,450.00 

20,000 

1,000 

19,000 

5% 

950.00 

20,000 

1,000 

19,000 

5% 

950.00 

20,000 

1,000 

19,000 

5% 

950.00 

10,000 

1,000 

9,000 

5% 

450.00 

25,000 

1,000 

24,000 

5% 

1,200,00 

10,000 

1,000 

9,000 

5% 

450.00 

10,000 

1,000 

9,000 

5% 

450.00 

7,678,896.00   5,000 


4,856,758.00   5,000 


John  Jacob  Astor  .     2,922,672.00   5,000 


50,000 

250,000 

1,000,000 

6,373,896 

50,000 

250,000 

1,000,000 

3,551,758 

50,000 

250,000 

1,000,000 

1,617,672 


1% 
2% 
3% 
4%  290,455.84 


1% 
2% 
3% 

4% 
1% 
2% 
3% 
4% 


177,570.32 


100,206.88 


52  RATES   OF   TAX  AND   EXEMPTIONS 

Amount 

of         Amount  of 
Beneficiary  Value  of       Interest       Interest        Rate         Tax 

Interest       Exempt       Taxable 
William  Vincent 

Astor $68,964,599.80  $5,000         $50,000       1% 

250,000       2% 
1,000,000       3% 
67,659,599.80  4%  $2,741,883.99 


$3,316,992.03 

(20)  When  exemption  prorated 

IN  MATTER  OF  TITLE  GUARANTEE  &  TRUST  Co.,  81 
Misc.  106,  several  of  the  beneficiaries  were  entitled  to 
legacy  presently  payable  and  also  in  addition  to  an  in- 
terest in  the  remainder  of  a  trust  fund.  The  question 
arose  whether  the  deduction  of  the  exemption  under 
§  22 la  should  be  deducted  from  the  legacy  presently 
payable  or  from  the  corpus  of  the  trust  fund  in  which  the 
beneficiary  had  a  remainder  interest.  Surrogate  Cohalan 
disposed  of  the  question  by  saying,  page  112:  "As  the 
statute  does  not  provide  that  any  particular  portion  of 
the  property  passing  to  a  beneficiary  shall  be  exempt,  but 
only  that  of  the  entire  amount  transferred  $5,000  shall 
be  exempt,  the  beneficiaries  are  not  entitled  to  set  apart 
any  particular  $5,000  for  the  exemption. 

''  The  $5,000  is  to  be  deducted  from  the  value  of  the  en- 
tire legacy,  and  those  entitled  to  participate  in  the  trust 
fund  disposed  of  in  paragraph  tenth  of  the  will  are  entitled 
only  to  an  exemption  on  that  amount  in  the  proportion 
which  the  entire  value  of  the  bequests  made  to  them  bears 
to  the  amount  to  which  they  are  entitled  under  that  para- 
graph. The  amount  of  the  tax  as  so  ascertained  is  to  be 
deducted  by  the  executor  from  the  amount  paid  over  to 
the  legatees  under  paragraph  tenth  of  the  will,  and  the 
tax  upon  the  remainder  of  their  respective  interests  in 
decedent's  estate  is  to  be  paid  out  of  the  respective  trust 
funds  in  which  they  are  interested  as  remaindermen." 

(21)  Non-resident  estates 

The  taxable  amount  of  the  New  York  portion  of  a  non- 


RATES   OF   TAX   UNDER   PRIOR   STATUTES  53 

resident  estate  passing  to  each  beneficiary  determines 
the  rate  of  tax,  vide  post,  page  150. 

(22)  Rates  of  tax  under  prior  statutes 

The  rates  of  tax  have  remained  unchanged  since  the 
amendment  by  Laws  of  1911,  chap.  732,  post,  page  527, 
in  effect  July  21,  1911.  For  rates  under  Laws  of  1910, 
chap.  706,  vide  post,  page  521,  in  effect  July  11,  1910 
(Matter  of  Lane,  157  App.  Div.  694),  vide  Matter  of 
Jourdan,  206  N.  Y.  653,  post,  page  386.  For  rates  prior 
to  1910  amendment  vide  post,  page  809. 

(23)  Trust  deed 

IN  MATTER  OF  ANDREW  G.  AGNEW,  N.  Y.  Law  Journal, 
December  13,  1913,  the  decedent  died  a  resident  on 
October  6,  1912,  leaving  a  last  will  and  testament.  On 
December  28,  1903,  he  had  executed  and  delivered  an 
irrevocable  deed  of  trust  by  which  he  assigned  and  trans- 
ferred certain  personal  property  therein  mentioned  to 
trustees,  to  pay  the  income  to  him  during  his  life  and  upon 
his  death  to  distribute  the  trust  fund  hi  accordance  with 
the  provisions  of  the  deed  of  trust. 

Surrogate  Cohalan  held:  "*  *  *  the  property  trans- 
ferred by  the  deed  of  trust  is  subject  to  a  tax  at  the  rate 
prescribed  by  the  statute  in  effect  at  the  date  when  the 
deed  was  executed.  The  property  transferred  by  the 
decedent's  will  is  subject  to  a  tax  at  the  rate  prescribed 
by  the  statute  in  force  at  the  date  of  decedent's  death, 
and  the  value  of  the  interests  passing  to  the  respective 
beneficiaries  under  the  deed  of  trust  should  not  be  added 
to  the  amounts  received  by  them  as  legatees  under  the 
will." 

Vide  Matter  of  Atterbury,  N.  Y.  Law  Journal,  March 
25,  1913,  opinion  quoted  post,  page  871,  and  other  cases 
cited  sub  Trust  Deed,  post,  page  867. 


PROCEDURE 


PRELIMINARY  TO  APPOINTMENT  OF  APPRAISER 


(1)  Rights   of   the   parties   gov- 

erned by  the  statute  in 
existence  at  time  of  trans- 
fer. 

(2)  Procedure  by  statute  in  force 

when  proceeding  taken. 

(3)  Each  proceeding  has  its  own 

problem. 

(4)  Procedure  and  practice  not 

uniform. 

(5)  Non-resident  estates  discuss- 

ed in  subsequent  chapter. 

(6)  Jurisdiction  of  surrogate. 


(7)  Search  of  safe  deposit  box  for 

will. 

(8)  Order   permitting   search   of 

safe  deposit  box. 

(9)  Waiver    from    state    comp- 

troller. 

(10)  Affidavit  re  data  required  by 

§238. 

(11)  Release  of  safe  deposit  box. 

(12)  Transfer  of  securities. 

(13)  Separate  consents  issued. 

(14)  Partnership    funds   or  safe 

deposit  box. 


(l)  Rights  of  the  parties  governed  by  the  statute  in 
existence  at  the  time  of  the  transfer 

"The  rights  of  the  parties  and  the  amount  of  the  tax 
are  controlled  by  the  statute  in  existence  at  the  time  of 
the  transfer."  Matter  of  Abraham,  151  App.  Div.  441- 
442;  Matter  of  Webber,  id.  539;  Matter  of  Miller,  110 
N.  Y.  216-223;  Matter  of  Harbeck,  161  N.  Y.  211-217; 
Matter  of  Pettit,  65  App.  Div.  30-33,  affirmed,  on  opinion 
below,  171  N.  Y.  654;  Matter  of  Keeney,  194  N.  Y.  281- 
287,  sustained  in  222  XL  S.  525,  sub  nom.  Keeney  v.  New 
York;  Matter  of  Dwight,  N.  Y.  Law  Journal,  October  8, 
1911  (opinion  quoted  post,  page  872)  affirmed,  without 
opinion,  149  App.  Div.  912;  Matter  of  Lord,  111  App. 
Div.  152-154,  affirmed,  without  opinion,  186  N.  Y.  549, 
sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn; 
Matter  of  Mason,  120  App.  Div.  738-740,  affirmed,  with- 
out opinion,  sub  nom.  Matter  of  Naylor,  189  N.  Y.  556; 
Matter  of  Atterbury,  N.  Y.  Law  Journal,  March  25, 
1913,  opinion  quoted  post,  page  871;  Matter  of  Stuart, 
id.,  May  10, 1913,  opinion  quoted  post,  page  772. 

The  practitioner  therefore  should  consult  the  statute 
under  which  the  rights  are  to  be  determined.  The  statute 
54 


PROCEDURE   AND   PRACTICE    NOT   UNIFORM  55 

in  its  present  amended  form  is  set  forth  supra,  page  3,  and 
the  prior  acts  will  be  found  post,  page  403. 

(2)  Procedure  by  statute  in  force  when  proceeding  taken 
The  method  of  procedure  in  inheritance  tax  proceedings 

is  controlled  by  the  statute  in  force  when  the  proceedings 
are  taken.  Matter  of  Davis,  149  N.  Y.  539-545;  Matter 
of  Sloane,  154  N.  Y.  109-113;  Matter  of  Abraham,  supra. 

(3)  Each  proceeding  has  its  own  problem 

Justice  Werner  remarked  that  "it  has  been  justly  ob- 
served by  some  jurist  possessed  of  philosophical  percep- 
tion 'that  no  will  has  a  twin  brother.'  This  sage  epigram 
points  directly  at  the  difficulties  encountered  by  courts  in 
trying  to  construe  wills  in  the  light  of  authority."  Matter 
of  King,  200  N.  Y.  189-192.  The  shifting  phases  of  con- 
ditions arising  in  estates  make  it  possible  to  say  that  many 
transfer  tax  proceedings  lack  not  only  a  twin  brother,  but 
seem  without  even  a  cousin  of  remote  degree. 

The  construction  of  wills  is  often  involved  in  these 
proceedings.  Matter  of  Cager,  111  N.  Y.  343-347;  Matter 
of  Kimberly,  150  N.  Y.  90-93;  Matter  of  Burgess,  204 
N.  Y.  265-271;  Matter  of  Lane,  157  App.  Div.  694. 
In  addition,  the  appraiser  has  at  tunes  cast  upon  him  the 
duty  of  determining  the  "fair  market  value"  (second  sen- 
tence of  §  230)  of  property  which  has  no  market  value. 
Matter  of  Brandreth,  28  Misc.  468-474,  affirmed,  169  N. 
Y.  437,  and  cases  cited  sub  Closely  Held  Stock. 

The  transfer  tax  appraisers  in  solving  the  many  and 
intricate  problems  brought  before  them  for  determination 
act  upon  the  principle  enunciated  by  Justice  Moody  when 
he  said:  "Mistakes  may  occur  and  sometimes  do  occur, 
but  it  is  better  that  they  should  be  endured  than  that,  in  a 
vain  search  for  infallibility,  questions  shall  remain  open 
indefinitely."  Tilt  v.  Kelsey,  207  U.  S.  43-56. 

(4)  Procedure  and  practice  not  uniform 

It  would  seem  that  with  appraisals  being  conducted  in 
each  of  the  sixty-two  counties  of  the  state  it  would  be 
impossible  to  outline  a  method  of  procedure  adaptable 


56         PRELIMINARY   TO   APPOINTMENT   OF   APPRAISER 

to  the  circumstances  of  every  case  that  might  arise  under 
the  conditions  existing  in  any  of  the  counties.  It  would  be 
futile  to  attempt  such  a  task.  Even  the  legal  theories 
upon  which  the  tax  is  assessed  have  been  inconsistent. 
"Thus  the  legislature  intended,  as  I  think,  to  repeal  the 
maxim  mobilia  personam  sequuntur,  so  far  as  it  was  an 
obstacle,  and  to  leave  it  unchanged,  so  far  as  it  was  an 
aid,  to  the  imposition  of  a  transfer  tax."  Matter  of  Whit- 
ing, 150  N.  Y.  27-30,  a  decision  prior  to  the  1911  amend- 
ment. 

While  the  courts  have  been  adopting  inconsistent 
theories  in  the  application  of  legal  principles,  it  is  not 
unnatural  that  the  appraisers  have  not  always  been  con- 
sistent in  the  ever-changing  conditions  under  which  their 
work  has  been  performed.  "But,"  as  was  said  by  Justice 
Miller  in  Matter  of  Tiffany,  143  App.  Div.  327-334, 
"there  should  be  some  consistency  in  the  application  of 
those  theories." 

A  uniform  practice  and  procedure  in  inheritance  tax 
matters  is  a  consummation  devoutly  to  be  wished.  An 
aim  of  this  work  is  to  furnish  the  practitioner  precedents 
for  each  step  in  an  inheritance  tax  proceeding.  It  is  not 
claimed  that  the  forms  given  are  the  only  ones  which 
can  be  used,  or  that  the  practice  indicated  is  adopted 
by  each  of  the  surrogate's  courts  throughout  the  state. 
The  forms  are,  however,  in  each  instance  precedents  in 
actual  use  and  the  practice  outlined  is  that  followed  in  at 
least  some  of  the  jurisdictions. 

(5)  Non-resident  estates  discussed  in  subsequent  chapter 
The  amendment  of  §§220  and  243  by  chapter  732, 

Laws  of  1911,  in  effect  July  21,  1911,  has  greatly  simplified 
the  practice  and  procedure  in  estates  of  non-residents. 
It  would  only  lead  to  confusion  if  this  practice  and  pro- 
cedure were  taken  up  in  conjunction  with  estates  of  resi- 
dents, and  therefore  the  subject  of  estates  of  non-residents 
has  been  treated  separately,  post,  page  133. 

(6)  Jurisdiction  of  surrogate 

"The  surrogate's  court  of  each  county  has  jurisdiction, 


SEARCH  OF  SAFE  DEPOSIT  BOX  FOR  WILL      57 

exclusive  of  every  other  surrogate's  court,"  to  hear  and 
determine  all  questions  arising  under  the  provisions  of  the 
inheritance  tax  statute,  "  where  the  decedent  was,  at  the 
time  of  his  death,  a  resident  of  that  county,  whether  his 
death  happened  there  or  elsewhere."  Subdivision  1  of 
§  2476  of  Code  of  Civil  Procedure;  §  228  of  the  Tax  Law; 
Matter  of  Wolfe,  137  N.  Y.  205-211;  Matter  of  Ullmann, 
137  id.  403-408;  Matter  of  Seaver,  63  App.  Div.  283. 

ISSUANCE  OF  LETTERS  is  not  necessary  to  give  surrogate 
jurisdiction  in  transfer  tax  proceedings.  2  State  Depart- 
ment Reports,  497-500. 

(7)  Search  of  safe  deposit  box  for  will 

If  the  decedent  dies  testate  and  his  will  is  deposited  hi  a 
safe  deposit  box,  the  practitioner  will  find  that  his  first 
problem  is  getting  the  will  out  of  the  box.  The  safe  deposit 
company  usually  will  not  allow  the  box  to  be  opened 
except  upon  an  order  of  the  surrogate  and  upon  notice 
to  the  state  comptroller  under  §  227. 

The  application  to  the  surrogate  for  the  order  is  cus- 
tomarily granted  ex  parte.  The  following  precedent 
indicates  the  character  of  allegations  necessary  in  the 
application : 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 


Petition  to  Open  Safe  Deposit 
Box. 


In  the  Matter  of  Proving  the 
Last  Will  and  Testament  of 
DAVID  C.  ANDREWS, 

Deceased. 

To  the  Surrogates'  Court  of  the  County  of  New  York: 
The  Petition  of  Frances  L.  Andrews  residing  at  No.  210 

West  79th  Street,  in  the  Borough  of  Manhattan,  City  and  State 

of  New  York,  respectfully  shows: 

That  she  is  the  widow  of  the  decedent  herein. 

That  the  decedent,  David  C.  Andrews,  departed  this  life  on 

or  about  the  21st  day  of  February,  1913,  and,  at  the  time  of  his 

decease,  resided  at  No.  210  West  79th  Street,  in  the  City  of  New 

York,  and  was  at  the  time  of  his  death  a  resident  of  the  County 

of  New  York. 


58         PRELIMINARY   TO   APPOINTMENT   OF   APPRAISER 

That  said  David  C.  Andrews  made  and  executed  a  will  on  or 
about  the  13th  day  of  October,  1899,  wherein  and  whereby  he 
appointed  Frank  S.  Andrews  (since  deceased)  and  Edward 
Morrison  executors  of  said  will,  and,  in  the  event  of  the  death, 
failure  to  qualify  or  resignation  of  either  the  said  Frank  S. 
Andrews  or  the  said  Edward  Morrison,  the  said  decedent  ap- 
pointed S.  Stan  wood  Menken  as  the  sole  successor  of  such  execu- 
tor who  would  otherwise  serve. 

That  your  petitioner  verily  believes  that  the  said  decedent 
left  no  other  last  will  and  testament,  but  that  the  paper  executed 
on  or  about  the  13th  day  of  October,  1899,  as  aforesaid,  was  his 
last  will  and  testament. 

That  said  David  C.  Andrews  left  him  surviving  his  son, 
Joseph  Andrews,  as  his  only  heir-at-law  and  next  of  kin,  who  is 
an  infant  under  the  age  of  fourteen  years. 

That  at  the  time  of  his  decease  the  said  decedent  had  a  safe 
deposit  box  in  The  New  York  Produce  Exchange  Safe  Deposit 
and  Storage  Company  in  the  Produce  Exchange  Building  at  the 
corner  of  Stone  Street  and  Broadway,  in  the  Borough  of  Man- 
hattan, City,  County  and  State  of  New  York.  That  your 
petitioner  verily  believes  that  said  paper  executed  on  or  about 
the  13th  day  of  October,  1899,  is  now  in  existence  and  is  in  the 
safe  deposit  box  of  The  New  York  Produce  Exchange  Safe 
Deposit  and  Storage  Company.  That  in  order  that  the  estate  of 
said  decedent  may  be  administered,  it  is  necessary  that  his  said 
will  be  found  and  probated.  That  it  is  the  intention  of  the 
said  Edward  Morrison  and  S.  Stanwood  Menken,  the  said 
executors  of  the  said  will,  to  probate  the  same  in  the  surrogate's 
court  in  the  county  of  New  York. 

Wherefore  your  petitioner  prays  for  an  order,  directing  The 
New  York  Produce  Exchange  Safe  Deposit  and  Storage  Com- 
pany to  open  the  private  safe  or  box  of  the  said  David  C. 
Andrews,  deceased,  in  the  presence  of  an  officer  of  said  company, 
a  representative  of  the  Comptroller  of  the  State  of  New  York 
and  your  petitioner  for  the  purpose  of  examining  the  contents 
of  said  safe  or  box  to  find  said  will  and  directing  said  officer  or 
other  representative  of  said  company  if  such  will  is  found,  to 
deposit  the  same  in  the  Surrogates'  Court  of  the  County  of  New 
York. 

And  your  petitioner  states  that  no  prior  or  other  application 
has  been  made  for  an  order  directing  the  examination  of  said 


ORDER   PERMITTING    SEARCH   OF   SAFE   DEPOSIT   BOX      59 

box  hi  The  New  York  Produce  Exchange  Safe  Deposit  and 
Storage  Company. 

Dated,  New  York,  February  24,  1913. 

FRANCES  L.  ANDREWS, 

Petitioner. 
State  of  New  York, 
County  of  New  York, 

Frances  L.  Andrews,  being  duly  sworn,  deposes  and  says: 
That  she  is  the  petitioner  above  named;  that  she  has  read  the 
foregoing  petition  and  knows  the  contents  thereof;  that  the 
same  is  true  to  her  own  knowledge,  except  as  to  the  matters 
therein  stated  to  be  alleged  on  information  and  belief,  and 
that  as  to  those  matters,  she  believes  it  to  be  true. 

FRANCES  L.  ANDREWS. 
Sworn  to  before  me  this 

24th  day  of  February,  1913. 

J.    J.    McFARLAND, 

Notary  Public,  Kings  Co., 
Certificate  filed  in 
New  York  County,  No.  31. 

(8)  Order  permitting  search  of  safe  deposit  box 
The  order  made  upon  the  presentation  of  this  petition 

followed  the  usual  form: 

At  a  Surrogates'  Court,  held  in  and 
for  the  County  of  New  York,  at 
the  Surrogates'  office  in  the  Hall 
of  Records  in  the  Borough  of 
Manhattan  in  the  City  of  New 
York  on  the  24th  day  of  Feb- 
ruary, 1913. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 


Order  to  Open  Safe  Deposit 
Box. 


In  the  Matter  of  Proving  the  Last 
Will  and  Testament  of 
DAVID  C.  ANDREWS, 
Deceased. 

Upon  the  annexed  petition  of  Frances  L.  Andrews  and  on 
motion  of  Philbin,  Beekman,  Menken  &  Griscom,  attorneys  for 
said  petitioner,  The  New  York  Produce  Exchange  Safe  Deposit 
and  Storage  Company  is  ordered  and  directed  and  hereby 


60         PRELIMINARY   TO    APPOINTMENT   OF   APPRAISER 

authorized  to  allow  Frances  L.  Andrews  to  open  the  private 
safe  or  box  of  David  C.  Andrews,  deceased,  in  the  presence  of  an 
officer  of  said  Company  and  of  a  representative  of  the  State 
Comptroller  and  without  removing  anything  therefrom  except 
the  last  will  and  testament,  if  any  be  found,  examine  the  con- 
tents of  said  safe  or  box  for  said  will,  and  if  said  will  is  found, 
said  officer  of  said  Company  or  other  representative  of  said 
Company  is  hereby 

ORDERED  AND  DIRECTED  to  deposit  the  same  with  this  Court. 

JOHN  P.  COHALAN, 

Surrogate. 

Upon  the  granting  of  the  order  a  certified  copy  should 
be  served  on  the  safe  deposit  company.  If  the  county 
is  one  in  which  the  state  comptroller  has  appointed  an 
attorney  a  copy  of  the  order  should  be  served  upon  the 
attorney,  otherwise  upon  the  state  comptroller  at  Albany. 

An  appointment  should  then  be  made  with  the  repre- 
sentative of  the  state  comptroller  to  meet  the  representa- 
tive of  the  estate  at  the  office  of  the  safe  deposit  company. 

At  the  appointed  hour  the  representative  of  the  state 
comptroller,  the  safe  deposit  company  official  and  the 
attorney  for  the  estate  meet  at  the  safe  deposit  vault. 
The  representative  of  the  state  comptroller  at  the  time  of 
opening  the  box,  but  not  before,  gives  to  the  safe  deposit 
company  a  waiver. 

(9)  Waiver  from  state  comptroller 

The  form  used  in  New  York  county  is 

State  of  New  York 

Office  of 
Transfer  Tax  Attorney  for 

The  State  Comptroller 
In  the  County  of  New  York. 

September  8,  1913. 
Lincoln  Safe  Deposit  Company 
Dear  Sirs: 

Re  Estate  of  John  Jones,  deceased 

The  Comptroller  of  the  State  of  New  York  hereby  waives 
the  issuance  of  the  ten  days'  notice,  required  by  §  227  of  the 
Taxable  Transfers  Law,  for  the  opening  of  the  safe  deposit  box 


AFFIDAVIT  RE   DATA   REQUIRED   BY   §  238  61 

in  your  custody  belonging  to  this  estate,  and  further  consents  to 
the  release  of  will  found  therein,  to  the  representatives  of  said 
decedent,  and  reseal  box. 

Very  truly  yours, 

THOMAS  E.  RUSH, 
Attorney  for  State  Comptroller. 

The  box  is  then  opened  in  the  presence  of  all  three,  a 
search  is  made  for  the  will  and  if  found  it  is  taken  out  by 
the  representative  of  the  safe  deposit  company  and  the 
box  resealed  by  him.  Nothing  is  removed  from  the  safe 
deposit  box  at  this  time  except  the  will.  In  compliance 
with  the  terms  of  the  order  of  the  surrogate  the  representa- 
tive of  the  safe  deposit  company  forthwith  deposits  said 
will  with  the  clerk  of  the  surrogate's  court.  The  will  is  then 
offered  for  probate  in  the  ordinary  course. 

It  is  not  the  usual  practice  to  make  an  inventory  of  the 
contents  of  the  box  at  this  time,  the  inventory  being  made 
after  the  will  is  admitted  to  probate.  Vide  page  68. 

(10)  Affidavit  re  data  required  by  §  238 

Section  238  provides:  "The  state  comptroller  shall 
furnish  to  each  surrogate  a  book,  which  shall  be  a  public 
record,  and  in  which  he  shall  enter  the  name  of  every 
decedent  upon  whose  estate  an  application  to  him  has 
been  made  for  the  issue  of  letters  of  administration,  or 
letters  testamentary,  or  ancillary  letters,  the  date  and 
place  of  death  of  such  decedent,  the  estimated  value  of  his 
real  and  personal  property,  the  names,  places  of  residence 
and  relationship  to  him  of  his  heirs-at-law,  the  names  and 
places  of  residence  of  the  legatees  and  devisees  in  any  will 
of  any  such  decedent,  the  amount  of  each  legacy  and  the 
estimated  value  of  any  real  property  devised  therein,  and 
to  whom  devised.  These  entries  shall  be  made  from  the 
data  contained  in  the  papers  filed  on  any  such  application, 
or  in  any  proceeding  relating  to  the  estate  of  the  decedent." 

In  order  to  comply  with  this  direction  of  the  statute 
it  is  the  practice  of  the  surrogate's  court  to  require  the 
petitioner  for  letters  to  file  at  the  time  of  presentation 
of  the  petition  an  affidavit  setting  forth  the  data. 


62         PRELIMINARY   TO   APPOINTMENT   OF   APPRAISER 

The  printed  forms  furnished  by  some  of  the  surrogates' 
courts  describe  this  affidavit  as  an  "  affidavit  under 
chapter  399,  Laws  of  1892."  Section  238  of  the  present 
statute  is  the  one  referred  to.  The  data  is  given  in  the 
following  form: 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 


In  the  Matter  of  Proving  the 
Last  Will  and  Testament  of 

JOHN  PIERPONT  MORGAN,  .. 

„  '      \  Affidavit  under  §  238. 

As  a  Will  of  Real  and  Personal 
Property. 

County  of  New  York,  ss.: 

John  Pierpont  Morgan,  Jr.,  being  duly  sworn,  says:  that  he  is 
the  petitioner  herein.  That  the  above-named  decedent  died  on 
the  31st  day  of  March,  1913,  at  Rome,  Italy. 

That  the  estimated  value  of  the  real  property  in  this  state,  of 
which  said  decedent  died  seized,  is  over  Ten  Thousand  ($10,000) 
dollars. 

That  the  estimated  value  of  the  personal  property  of  which 
said  decedent  died  possessed,  is  over  Ten  Thousand  ($10,000) 
dollars. 

That  the  names  of  the  heirs-at-law  and  next  of  kin  of  said 
decedent,  their  places  of  residence,  and  relationship  to  the 
decedent,  are  as  follows: 

NAME  RESIDENCE 

SHIP 

Frances  Louisa  Tracy  Morgan . .  219  Madison  Ave.,  Borough 

of  Manhattan,  New  York 
City,  N.  Y Widow. 

John  Pierpont  Morgan,  Jr Glen  Cove,  Long  Island, 

N.  Y Son. 

Louisa  Pierpont  Satterlee 37  East  36th  Street,  Borough 

of  Manhattan,  New  York 

City,  N.  Y Daughter. 

Juliet  Pierpont  Hamilton Sterlington,  Rockland  Co., 

N.  Y Daughter. 

Annie  Tracy  Morgan.  .• 219  Madison  Ave.,  Borough 

of  Manhattan,  New  York 

City,  N.  Y Daughter. 


AFFIDAVIT   RE   DATA   REQUIRED   BY   §  238  63 

That  the  names  and  places  of  residence  of  the  legatees  and 
devisees  in  said  will,  the  amount  or  value  of  each  legacy,  and  the 
estimated  value  of  any  real  property  devised  therein,  are  as 
follows: 


vr  T,  AMOUNT  OB  VALUE  OF 

NAME  OF  LEGATEE  RESIDENCE  ^ 

~  VALUE  CF      DEVISE 

OK  DEVISEE 

LEGACY 

Frances  Louisa  Tracy  Morgan. 219  Madison  Ave., 

Borough  of  Man- 
hatt an ,  New 
York  City,  N.  Y.  Unknown.. .  .Unknown. 

John  Pierpont  Morgan,  Jr., . .  Glen  Cove,   Long 

Island,  N.  Y. .  .  .   Unknown.. .  .Unknown. 

Louisa  Pierpont  Satterlee. .  .37   East  36th  St.,  Beneficial 

Borough  of  Man-  interest  for 
hattan,  New  life  in  trust 
York  City,  N.  Y.  of  $3,000,- 

000 

Issue  of  Louisa  Morgan  Sat- 
terlee  37  East  36th  St.,  Remainder 

Borough  of  Man-     in  trust  of 

hattan,  New      $3,000,000 

York  City,  N.  Y. .  subject  to 

provisions 

of  will. 

Juliet  Pierpont  Hamilton ....  Sterlington,  Rock-  Beneficial 

land  Co.,  N.  Y. .  interest  for 
life  in  trust 
of  $3,000,- 
000. 

Issue  of  Juliet  Morgan  Ham- 
ilton  Sterlington,  Rock-  Remainder 

Land  Co.,  N.  Y.  interest  in 
trust  of  $3,- 
000,000  sub- 
ject to  pro- 
visions of 
will. 


The  other  bequests  in  the  will  are  set  forth  in  like  manner, 
closing  with: 

Each  servant  of  testator's  household  at  New  York,  Cragston, 
Prince's  Gate  and  Dover  House,  who  has  been  continuously 
employed  by  him  for  not  less  than  five  years  next  preced- 


64         PRELIMINARY   TO    APPOINTMENT   OF   APPRAISER 

ing   March    31,    1913,    other    than    those    above   mentioned, 
$1,000. 

JOHN  PIEKPONT  MORGAN,  Jr. 
Sworn  to  before  me,  this 
17th  day  of  April,  1913. 
EDNA  M.  BLACKMAR, 
Notary  Public, 

County  of  New  York. 

In  view  of  the  fact  that  this  affidavit  is  made  before 
the  administration  of  the  estate  is  commenced  it  is  ap- 
parent that  the  estimated  amounts  to  be  inserted  in 
the  affidavit  are  necessarily  very  incomplete  approxima- 
tions. The  sum  inserted  as  the  estimated  amount  is 
not  conclusive  upon  the  estate,  and  attorneys  have  fallen 
into  the  habit  of  under-estimating  rather  than  over- 
estimating. 

In  some  of  the  counties  it  is  the  practice  of  the  surrogate 
to  use  this  affidavit  to  obtain  the  information  upon  which, 
under  the  provisions  of  the  second  sentence  of  §  230,  he 
may  make,  upon  his  own  motion,  an  order  directing  that 
the  appraisal  be  had. 

(11)  Release  of  safe  deposit  box 

The  recent  opinion  of  the  Appellate  Division  handed 

down  on  November  7,  1913,  is  set  forth  post,  page  837. 

,The  effect  of  this  decision  may  be  far  reaching,  but  at 

the  present  writing  it  has. seemed  best  to  give  the  practice 

as  it  has  existed  for  many  years. 

After  the  granting  of  letters  the  representatives  of  the 
estate  usually  desire  forthwith  to  obtain  possession  of  the 
contents  of  the  safe  deposit  box  or  vault.  Section  227  is 
the  provision  of  the  statute  which  governs. 
'  The  usual  practice  is  for  the  attorney  for  the  estate 
to  apply  to  the  state  comptroller  for  a  waiver,  making  the 
application  to  the  attorney  for  the  state  comptroller  in 
counties  where  there  is  an  attorney,  otherwise  to  the 
comptroller's  office  in  Albany.  There  should  accompany 
the  application  for  waiver  a  certificate  from  the  clerk 
of  the  surrogate's  court  showing  that  letters  have  been 


RELEASE  OF  SAFE  DEPOSIT  BOX  65 

issued.  This  application  should  state  the  name  of  the 
estate,  the  date  of  death,  the  date  of  granting  letters, 
the  residence  of  decedent  at  the  date  of  death,  the  place 
of  death,  the  name  and  address  of  the  applicant,  who  is 
usually  the  attorney  for  the  executor,  and  the  name  and 
address  of  the  executor  or  administrator,  together  with 
the  name  and  address  of  the  safe  deposit  company.  Upon 
the  filing  of  such  an  application  for  waiver  the  representa- 
tive of  the  state  comptroller  does  not  give  to  the  attorney 
for  the  estate  the  waiver  %sked  for.  He  does,  however, 
make  an  appointment  to  meet  the  attorney  for  the  estate 
at  the  office  of  the  safe  deposit  company. 

THE  RULING  OF  STATE  COMPTROLLER,  dated  January  16, 
1913,  1  State  Department  Reports,  601,  gives  the  reason 
for  this  practice.  The  ruling  is  set  forth  in  response  to  an 
enquiry  from  the  People's  Bank  of  Johnstown,  N.  Y.,  and 
is  as  follows: 

"Your  favor  of  the  fourteenth  inst.,  referring  to  the 
practice  of  transferring  the  contents  of  a  safe  deposit  box, 
or  securities,  deposits  or  other  assets,  belonging  to  the 
estate  of  a  deceased  person,  to  the  representatives  of  the 
estate,  and  particularly  as  to  whether  the  comptroller's 
representative  should  deliver  to  the  bank  his  written 
consent  to  the  delivery  of  the  contents  of  such  box  to  the 
representatives  of  the  deceased  person  before  he  examines 
the  contents  of  said  box  or  the  securities,  deposits  or  other 
assets  contained  therein,  was  duly  received. 

"  During  the  lifetime  of  the  owner  of  a  safe  deposit-  box 
neither  the  bank  nor  the  state  can  be  interested  in  the 
securities  or  other  property  the  owner  puts  in  or  takes  from 
the  box.  Consequently,  upon  application  of  the  proper 
person  the  bank  will  deliver  the  box  or  securities  to  the 
owner,  who  generally  retires  to  a  room  designated  and 
provided  by  the  bank  or  other  depositary  where  he  can 
examine  his  property  privately,  and  when  his  inspection 
is  ended  the  box  is  locked,  or  the  securities  returned  to  the 
vaults,  and  no  one  but  the  owner  knows  whether  a  security 
has  been  withdrawn  or  other  securities  added. 

"  When  the  owner  of  the  box  or  the  seeurities  dies,  how- 
5 


66         PRELIMINARY   TO    APPOINTMENT   OF   APPRAISER 

ever,  then  the  statute  immediately  imposes  certain  duties 
upon  the  bank  or  other  depositary  and  confers  certain 
rights  upon  the  state  comptroller. 

"  Section  227  of  the  Transfer  Tax  Law  provides,  in  sub- 
stance, as  follows :  That  no  safe  deposit  company,  bank  or 
other  institution,  person  or  persons  having  in  possession  or 
under  control  securities,  deposits  or  other  assets  belonging 
to  a  decedent  shall  deliver  or  transfer  the  same  to  the 
executors,  administrators  or  legal  representatives  of  said 
decedent  unless : 

"1.  Notice  of  the  time  and  place  of  such  intended  de- 
livery or  transfer  be  served  on  the  state  comptroller  at 
least  ten  days  prior  to  such  delivery; 

"2.  Nor  shall  such  transfer  be  made  without  retaining  a 
sufficient  portion  or  amount  thereof  to  pay  any  tax  and 
interest  due  upon  the  transfer  of  such  securities; 

"3.  Unless  the  state  comptroller  consents  thereto  in 
writing; 

"4.  And  it  shall  be  lawful  for  the  said  state  comptroller, 
personally  or  by  representative,  to  examine  said  securities, 
deposits  or  other  assets  at  the  time  of  such  delivery  or 
transfer. 

"  From  the  foregoing  it  is  apparent  that  the  bank  or 
other  depositary  must,  upon  the  death  of  the  owner  of  a 
safe  deposit  box,  give  the  state  comptroller  ten  days'  notice 
prior  to  the  time  the  bank  intends  to  deliver  or  transfer 
the  contents  of  the  box  and  permit  the  state  comptroller, 
at  the  time  of  such  delivery  or  transfer,  to  examine  the 
deposits,  securities  or  assets,  personally  or  by  representa- 
tive, and  also  the  bank  must  retain  a  sufficient  portion 
thereof  to  pay  any  tax  which  may  be  found  due,  unless 
the  state  comptroller  consents  thereto  in  writing. 

"From  this  analysis  of  §  227  of  the  Transfer  Tax  Law 
it  is  the  understanding  of  this  department  that  when 
application  has  been  regularly  made  by  the  executor, 
administrator  or  legal  representative  of  the  estate  of  a 
deceased  person  for  the  transfer  of  the  securities  and  a 
date  designated  for  the  delivery  thereof  by  notice  or  agree- 
ment, that  when  all  the  interested  persons  are  assembled 


RELEASE    OF   SAFE   DEPOSIT   BOX  67 

it  is  the  duty  of  the  bank  or  other  depositary  to  still 
retain  in  its  possession  and  under  its  immediate  control 
and  supervision  the  securities,  deposits  or  other  assets 
belonging  to  the  decedent  until  the  state  comptroller  or 
his  representative,  if  he  is  present  pursuant  to  notice  or 
other  arrangement,  has  had  opportunity  to  examine  all  the 
securities,  deposits  or  other  assets,  and  that  the  bank  has 
no  authority  to  deliver  the  securities,  deposits  or  other 
assets  to  the  executors,  administrators  or  legal  repre- 
sentatives until  this  examination  has  been  made  by  the  state 
comptroller  or  his  representative. 

"  If  our  view  of  the  statute  is  correct  the  answer  to  your 
inquiry  must  be  that  the  state  comptroller  or  his  represent- 
ative should  not  deliver  to  the  bank  the  written  consent  to 
the  transfer  or  delivery  of  the  securities,  deposits  or  assets 
until  after  he  has  made  his  examination  of  such  securities, 
deposits  or  other  assets  belonging  to  the  decedent." 

At  the  appointed  time  the  representative  of  the  state 
comptroller  and  the  attorney  for  the  estate  meet  at  the 
office  of  the  safe  deposit  company  and  at  that  time  the 
representative  of  the  state  comptroller  brings  with  him  a 
waiver  in  the  following  form: 

State  of  New  York 

Office  of 
Transfer  Tax  Attorney  for 

The  State  Comptroller 
In  the  City  of  New  York 

December  26,  1913. 
Lincoln  Safe  Deposit  Company 
Dear  Sirs: 

Re  Estate  of  John  Jones 

The  Comptroller  of  the  State  of  New  York,  hereby  waives  the 
issuance  of  the  ten  days'  notice,  required  by  §  227  of  the  Tax- 
able Transfers  Law,  for  the  opening  of  the  safe  deposit  box  in 
your  custody  belonging  to  this  estate,  and  further  consents  to 
the  transfer  of  any  securities  or  other  property  found  therein,  to 
the  representatives  of  said  decedent. 

Very  truly  yours, 

THOMAS  E.  RUSH, 
Attorney  for  the  State  Comptroller. 


68         PRELIMINARY   TO    APPOINTMENT   OF   APPRAISER 

It  will  be  noted  that  the  waiver  to  the  safe  deposit 
company  is  broader  in  its  language  than  the  one  issued 
at  the  tune  that  an  examination  of  the  box  was  being 
made  for  the  purpose  of  discovering  whether  the  will 
was  in  the  box.  The  safe  deposit  company  usually  re- 
quires that  the  attorney  for  the  estate  shall  before  the 
opening  of  the  box  furnish  it  with  a  certificate  from  the 
clerk  of  the  surrogate's  court  showing  that  letters  have 
been  issued.  1  State  Department  Reports,  579.  The 
certificate  having  been  handed  to  the  representative  of 
the  safe  deposit  company,  and  the  waiver  exhibited  to 
him,  he  thereupon  permits  the  safe  deposit  box  to  be 
opened. 

The  representative  of  the  state  comptroller  then  pro- 
ceeds to  make  an  itemized  inventory  of  all  of  the  contents 
of  the  box.  Very  often  there  will  be  in  the  box  securities 
or  property  which  do  not  belong  to  the  decedent.  In 
such  a  case  the  attorney  for  the  estate  should  ask  the 
representative  of  the  state  comptroller  to  note  upon  the 
inventory  the  fact  that  a  claim  is  made  that  the  securities 
or  property  in  question  do  not  belong  to  the  decedent. 
Considerable  confusion  sometimes  arises  at  the  opening 
of  a  safe  deposit  box  and  an  error  is  fallen  into  of  thinking 
that  inasmuch  as  a  representative  of  the  state  comptroller 
insists  upon  making  a  list  of  the  securities  and  property  in 
the  box  which  do  not  belong  to  the  decedent,  that  such  act 
on  his  part  is  hi  some  way  conclusive  upon  the  estate. 
It  is  not  so  at  all  for  the  representative  of  the  state  comp- 
troller is  simply  performing  his  administrative  duty  of 
reporting  to  his  superior  the  contents  of  the  box.  The 
question  as  to  who  owns  the  property  contained  in  the 
box  will  later  on  be  tried  out  and  settled  in  the  transfer 
tax  proceeding.  Vide  Matter  of  Francis,  N.  Y.  Law 
Journal,  August  12, 1913,  opinion  quoted  sub  Ownership  of 
Property,  post,  page  749;  Matter  of  Lawrence,  id.,  Febru- 
ary 15,  1913,  post,  page  701. 

After  this  inventory  has  been  made  by  the  representa- 
tive of  the  state  comptroller  the  safe  deposit  box  is  then 
free.  The  inventory  so  made  is  kept  by  the  representa- 


TRANSFER   OF   SECURITIES  69 

tive  of  the  state  comptroller  in  his  files,  and  when  the 
transfer  tax  proceedings  are  held  before  the  appraiser 
the  attorney  for  the  state  comptroller  has  the  inventory 
before  him  to  compare  with  the  list  of  assets  filed  by  the 
estate.  Sometimes  errors  arise  and  it  is  well  for  the 
attorney  for  the  estate  to  make  a  duplicate  copy  of  this 
inventory  for  the  files  of  the  estate. 

(12)  Transfer  of  securities 

The  delivery  or  transfer  of  securities,  deposits  or  other 
assets  is  governed  by  §  227.  It  is  not  the  practice  to  give 
the  ten  days'  notice  mentioned  in  said  section,  but  to 
make  an  application  for  a  consent  to  such  delivery  or 
transfer.  This  application  is  made  direct  to  the  comp- 
troller in  counties  where  there  is  no  attorney  for  the  comp- 
troller but  in  counties  where  there  is  an  attorney,  the 
application  is  made  to  the  attorney.  The  application  is 
usually  made  by  the  attorney  for  the  estate  and  should  be 
addressed  to  either  the  state  comptroller  or  his  attorney, 
as  the  case  may  be.  No  set  form  is  used,  but  the  following 
may  be  used  as  a  guide. 

Sir: 

John  Jones  died  at  St.  Luke's  Hospital,  in  the  Borough  of 
Manhattan,  City  of  New  York,  on  the  1st  day  of  September, 
1913.  At  the  time  of  his  death  he  was  a  resident  of  the  county  of 
New  York.  Letters  testamentary  have  been  duly  issued  by  the 
Surrogates'  Court,  County  of  New  York,  on  the  15th  day  of 
September  1913  to  Henry  Smith  who  resides  at  1744  Broadway 
in  the  Borough  of  Manhattan,  City  of  New  York.  Herewith 
enclosed  certificate  of  clerk  of  the  Surrogates'  Court  showing 
that  letters  have  been  issued.  As  attorney  for  said  executor,  I 
ask  that  in  pursuance  of  the  provisions  of  §  227  of  the  Tax  Law, 
waivers  be  issued  for  the  transfer  of  the  following: 

1 00  Shares  of  the  Preferred  Stock  of  American  Car  and  Foundry 
Company; 

100  Shares  of  the  Common  Stock  of  Chicago  and  Northwest- 
ern Railway  Company; 

100  Shares  of  the  stock  of  the  New  York  Central  and  Hudson 
River  Railroad  Company; 


70        PRELIMINARY   TO   APPOINTMENT  OF  APPRAISER 

Ten  $1,000  bonds  of  the  Atchison,  Topeka  and  Santa  Fe  Rail- 
way Company,  General  Mortgage,  4%  100-year  Gold 
Coupon  Bond,  payable  October  1,  1995; 

Five  $500  bonds  of  the  Northern  Pacific  Railway  Company, 
Prior  Lien  Railway  and  Land  Grant,  4%  Gold  Bond, 
payable  January  1,  1997; 

Garfield  National  Bank $3,405.68 

Columbia-Knickerbocker  Trust  Company  5,000,  with  interest 
Bank  for  Savings 1,340.87,  with  interest 

(13)  Separate  consents  issued 

Upon  the  presentation  of  such  an  application  separate 
consents  addressed  to  the  respective  corporations  will  be 
issued  and  delivered  to  the  applicant.  The  consents 
granted  upon  such  an  application  follow  this  form: 

State  of  New  York 

Office  of 
Transfer  Tax  Attorney  for 

The  State  Comptroller 
In  the  City  of  New  York 

October  1,  1913. 
Chicago  and  Northwestern  Railway  Company 

Dear  Sirs: 

Re  Estate  of  John  Jones 

The  Comptroller  of  the  State  of  New  York  hereby  waives  the 
issuance  of  the  ten  days'  notice,  required  by  §  227  of  the  Tax- 
able Transfers  Law  and  further  consents  to  the  transfer,  by 
you,  to  the  representatives  of  this  estate,  or  otherwise,  of  the 
following  personal  property  now  standing  on  your  books  in  the 
name  of  the  decedent : 

One  hundred  shares  of  Common  Stock. 

Yours  very  truly, 

THOMAS  E.  RUSH, 
Attorney  for  State  Comptroller. 

The  consents  so  obtained  are  to  be  delivered  to  the 
respective  corporations  to  whom  the  various  consents  are 
addressed,  at  the  time  the  transfer  is  to  be  made. 

It  is  suggested  that  the  attorney  for  the  estate  retain  in 
his  files  a  copy  of  his  application  for  consents  and  also 
copies  of  the  consents.  He  will  find  that  upon  the  transfer 


PARTNERSHIP   FUNDS   OR   SAFE   DEPOSIT  BOX  71 

tax  proceeding  the  attorney  for  the  state  comptroller  will 
have  in  his  files  the  original  application  and  a  copy  of  the 
,  consent,  and  that  a  comparison  of  the  figures  given  in  the 
affidavit  of  assets  will  be  made  at  the  time  of  the  hearing 
before  the  appraiser.  Frequently  affidavits  of  assets  are 
prepared  which  do  not  at  all  conform  in  their  schedule  of 
assets  with  the  applications  and  consents.  It  is  to  be 
assumed  that  this  defect  is  due  to  the  fact  that  attorneys 
do  not  have  before  them  copies  of  the  applications  and 
consents  when  they  prepared  the  affidavit  of  assets. 

Often  after  the  original  application  for  waivers  has 
been  made  some  new  asset  will  be  discovered  for  which 
a  waiver  is  necessary.  A  like  application  should  be  made 
for  such  a  waiver  as  made  in  the  first  instance.  It  will 
expedite  matters  to  present  again  a  certificate  of  the 
clerk  of  the  surrogates'  court  showing  that  letters  have 
been  issued.  The  issuance  of  these  waivers  is  not  de- 
pendent upon  transfer  tax  proceedings  having  been  com- 
menced. 

If  letters  have  not  been  issued  (supra,  page  57)  it  is 
usually  the  practice  for  the  representative  of  the  state 
comptroller  to  request  that  an  affidavit  be  furnished 
setting  forth  the  assets  of  the  estate. 

(14)  Partnership  funds  or  safe  deposit  box 

RULING  OF  STATE  COMPTROLLER,  dated  February  21, 
1913,  2  State  Department  Reports,  496,  holds  that  con- 
sent should  be  obtained  under  §  227  when  one  of  the 
partners  dies;  opinion  quoted  post,  page  753.  Vide  People 
v.  Mercantile  Safe  Deposit  Company,  158  App.  Div., 
opinion  quoted  post,  page  837. 


PROCEDURE 

DESIGNATION  OF  APPRAISER  AND  NOTICE  OF  HEARING 

(1)  The  appraiser.  (6)  Necessary  parties. 

(2)  Surrogate  on  his  own  motion         (7)  Transferees    other    than    by 

may  order  appraisal.  will  or  intestacy. 

(3)  Practice  in  certain  counties.         (8)  Notice  should  be  explicit  as 

(4)  Petition  for  appointment  of  to  property  to  be  appraised. 

appraiser.  (9)  Practice  in  New  York  County . 

(5)  Order   appointing   appraiser.         (10)  Special  guardian. 

(1)  The  appraiser 

The  county  treasurer  acts  as  appraiser  (first  sentence  of 
§  230)  except  in  the  seventeen  counties  of  Albany,  Bronx, 
Dutchess,  Erie,  Kings,  Monroe,  Nassau,  New  York, 
Niagara,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer, 
Richmond,  Suffolk  and  Westchester  (§  229). 

In  the  seventeen  enumerated  counties  appraisers  are 
appointed  by  the  state  comptroller  who  hold  office  at  his 
pleasure.  People  ex  rel.  McNeile  v.  Glynn,  128  App. 
Div.  257;  People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35; 
Matter  of  Weeks  v.  Kraft,  147  App.  Div.  403.  In  such 
counties  the  surrogate  cannot  designate  as  appraiser  any 
person  other  than  the  person,  or  one  of  the  persons,  ap- 
pointed by  the  state  comptroller  under  the  provisions  of 
§  229.  Matter  of  Sondheim,  32  Misc.  296,  affirmed,  69 
App.  Div.  5. 

For  general  functions  of  appraiser  vide  Matter  of  Barnes 
and  other  cases  cited  sub  Appraiser,  post,  page  596. 

(2)  Surrogate  on  his  own  motion  may  order  appraisal 
The  Surrogate  may,  upon  his  own  motion,  without  any 

previous  application  oh  the  part  of  anyone,  make  an  order 
directing  the  County  Treasurer,  or  in  the  seventeen  coun- 
ties mentioned,  designating  the  person  or  one  of  the  per- 
sons appointed  to  act  as  Transfer  Tax  Appraiser  "to  fix 
the  fair  market  value  of  property  of  persons  whose  estates 
shall  be  subject  to  the  payment  of  any  tax  imposed  "  by  the 
transfer  tax  statute  (second  sentence  of  §  230).  In  many 
of  the  counties  the  Surrogate  as  a  matter  of  practice  makes 
72 


SURROGATE   MAY   ORDER  APPRAISAL  73 

such  an  order  on  his  own  initiative.    Matter  of  O'Dono- 

hue,  44  App.  Div.  186-189.    The  order  so  made  is  hi  the 

following  form: 

At  a  Surrogate's  Court  held  in  and  for 
the  County  of  Rockland,  at  the  Sur- 
rogate's office  hi  Clarkstown,  on  the 
27th  day  of  February,  1913. 

Present — WILLIAM  MCCAULEY,  Surrogate. 

In  the  Matter  of  the  Estate  of  ~  j  •  *• 

TT  _  ,  Order  Appointing 

HELEN  G.  LAWTON,  , 

'  ,  Appraiser 

Deceased. 


It  appearing  to  the  satisfaction  of  the  Surrogate  that  certain 
property  left  by  the  above  named  Helen  G.  Lawton  of  Orange- 
town,  deceased,  is  subject  to  a  tax,  under  Article  X  of  the  Tax 
Law,  as  amended,  hi  relation  to  Taxable  Transfers;  now  in  pur- 
suance of  the  statute  in  such  cases  made  and  provided: 

I  do  hereby  appoint  Walter  G.  Hamilton,  Esq.,  County 
Treasurer  of  the  County  of  Rockland,  N.  Y.,  appraiser  for  the 
purpose  of  fixing  the  fair  market  value  of  the  property  which  is 
subject  to  the  payment  of  said  tax. 

And  I  direct  said  appraiser  to  give  notice  by  mail  to  all  per- 
sons known  to  have  a  claim  or  interest  hi  the  property  to  be 
appraised,  including  the  State  Comptroller,  of  the  tune  and 
place  when  he  will  appraise  the  same. 

And  I  further  order  and  direct  that  at  the  time  and  place  in 
such  notice  mentioned,  the  said  appraiser  shall  appraise  the 
said  property  at  its  fair  market  value  and  take  proof  of  the  debts 
of  the  deceased  and  the  expenses  of  the  administration  of  said 
estate  and  forthwith  make  a  report  of  his  proceedings,  in  writing, 
to  the  Surrogate. 

And  it  is  further  ordered  that  the  said  appraiser  forthwith 
give  notice  by  mail  to  the  following  named  persons  (and  to  all 
others)  known  to  have  or  claiming  an  interest  in  the  property 
of  the  said  Helen  G.  Lawton,  deceased,  subject  to  the  payment 
of  said  taxes,  viz. : 

Henry  G.  Lawton,  son,  executor,  Nyack,  N.  Y. 

Mary  J.  Jackson,  daughter,  Haverstraw,  N.  Y. 

Margaret  H.  White,  sister,  Morristown,  N.  J. 

Elizabeth  Murray,  legatee,  Palisades,  N.  Y. 

Enter, 
WILLIAM  MCCAULEY,  Surrogate. 


74  DESIGNATION    OF   APPRAISER   AND    NOTICE 

(3)  Practice  in  certain  counties 

The  practice  differs  in  the  various  counties  as  to  the 
procedure  after  the  order  appointing  appraiser  has  been 
made  by  the  surrogate.  Outside  of  New  York  and  a  few 
other  counties  the  practice  is  quite  general  for  the  ap- 
praiser to  take  the  next  step  without  any  action  on  the 
part  of  the  representatives  of  the  estate.  In  such  counties 
the  appraiser,  in  pursuance  of  the  provisions  of  the  third 
sentence  of  §  230,  forthwith  gives  notice  by  mail  to  all 
"  persons  known  to  have  a  claim  or  interest  in  the  property 
to  be  appraised,  including  the  state  comptroller,  and  to 
such  persons  as  the  surrogate  may  by  order  direct,  of  the 
time  and  place  when  he  will  appraise  such  property." 

The  names  and  addresses  of  the  persons  to  whom  no- 
tices are  to  be  sent  are  obtained  from  the  data  filed  in 
pursuance  of  the  provisions  of  the  first  and  second  sen- 
tences of  §  238.  Vide  supra,  page  61.  The  order  ap- 
pointing appraiser  usually  sets  forth  the  names  and 
addresses  of  the  persons  to  whom  the  appraiser  is  to  give 
notice.  As  to  notice  and  necessary  parties  vide  post, 
page  77. 

(4)  Petition  for  appointment  of  appraiser 

In  New  York  County  the  general  practice  is  for  the  sur- 
rogate to  designate  an  appraiser  upon  the  petition  of  some 
person  interested  in  the  estate.  This  petitioner  usually 
is  the  executor  or  administrator.  Upon  the  presentation 
of  the  petition  to  the  surrogate  it  is  not  necessary  to  give 
notice  to  anyone,  the  application  for  the  designation  of 
an  appraiser  being  ex  parte.  The  form  used  in  New  York 
County  is  as  follows : 

SURROGATES'  COURT,  NEW  YORK  COUNTY. 


Petition  for  Appointment  of 
Appraiser. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of 

JOHN  JACOB  ASTOR, 

Deceased. 

To  the  Surrogates '  Court  of  the  County  of  New  York: 
The  petition  of  Nicholas  Biddle  respectfully  shows: 
First:  That  John  Jacob  Astor  died  on  the  18th  day  of  April, 


PETITION   FOR   APPOINTMENT  OF   APPRAISER  75 

1912,  at  sea,  being  at  the  time  of  his  death  a  resident  of  the 
County  of  New  York,  State  of  New  York,  and  leaving  a  last 
Will  and  Testament  which  was  duly  admitted  to  probate  by 
the  Surrogates'  Court  of  the  County  of  New  York  on  the  22d 
day  of  May,  1912,  and  that  letters  testamentary  thereon  were 
duly  issued  by  said  court  on  the  same  day  to  your  petitioner  and 
to  James  Roosevelt  Roosevelt  and  Douglas  Robinson,  the  ad- 
dress of  each  of  whom  is  No.  23  West  26th  Street,  Borough  of 
Manhattan,  City  of  New  York. 

Second:  That  as  your  petitioner  is  informed  and  believes  the 
property  of  said  decedent  or  some  portion  thereof  or  some 
interest  therein  is  or  may  be  subject  to  the  payment  of  the  tax 
imposed  by  the  law  in  relation  to  taxable  transfers  of  property. 
Third:  That  all  the  persons  who  are  now  in  being  and  the 
corporations  who  are  interested  in  said  estate  and  who  are 
entitled  to  notice  of  all  proceedings  herein  and  their  post-office 
addresses  are  as  follows: 

Hon.  William  Sohmer,  Comptroller,  Albany,  N.  Y. 
William  Vincent  Astor,  23  West  26th  Street,  Borough  of 

Manhattan,  City  of  New  York. 
Madeleine    Talmage    Force    Astor,    240    Fifth    Avenue, 

Borough  of  Manhattan,  City  of  New  York. 
Ava  Alice  Muriel  Astor,  %  Ava  L.  W.  Astor,  18  Grosvenor 

Square,  London,  England. 
St.  Paul's  School,  Concord,  New  Hampshire. 
New  York  Yacht  Club,  37  West  44th  Street,  Borough  of 

Manhattan,  City  of  New  York. 

James  S.  Armstrong,  Red  Hook,  Dutchess  County,  N.  Y. 
James  Roosevelt  Roosevelt,  23  West  26th  Street,  Borough 

of  Manhattan,  City  of  New  York. 
Douglas   Robinson,    23   West   26th   Street,    Borough   of 

Manhattan,  City  of  New  York. 

Nicholas  Biddle,  23  West  26th  Street,  Borough  of  Manhat- 
tan, City  of  New  York. 

Robert  H.  M.  Ferguson,  Silver  City,  New  Mexico. 
William  A.  Dobbyn,  23  West  26th  Street,  Borough  of 

Manhattan,  City  of  New  York. 

Thomas  Hade,  366  East  207th  Street,  Borough  of  Man- 
hattan, City  of  New  York. 

Herbert  A.  Pinkham,  Rhinebeck,  Dutchess  County,  N.  Y. 

That  all  the  above-named  persons  are  of  full  age  and  sound 

mind  except  William  Vincent  Astor,  who  is  a  minor  over  the 


76  DESIGNATION    OF   APPRAISER   AND    NOTICE 

age  of  fourteen  years  and  Ava  Alice  Muriel  Astor,  who  is  a 
minor  under  the  age  of  fourteen  years. 

THEREFORE  your  petitioner  prays  that  you  will  designate  an 
appraiser  as  provided  by  law. 
Dated,  July  llth,  1912. 

NICHOLAS  BIDDLE, 

Petitioner. 


State  of  New  York,      ) 

'     \ss.: 
>rM 


County  of  New  York, 

Nicholas  Biddle,  being  duly  sworn,  deposes  and  says:  That 
he  is  the  petitioner  in  the  above-entitled  proceeding;  that  he 
has  read  the  foregoing  petition  and  knows  the  contents  thereof 
and  that  the  same  is  true  to  his  own  knowledge  except  as  to  the 
matters  therein  stated  to  be  alleged  on  information  and  belief 
and  that  as  to  those  matters  he  believes  it  to  be  true. 

NICHOLAS  BIDDLE. 
Sworn  to  before  me  this 

llth  day  of  July,  1912. 

PHILIP  C.  BROWN, 
Notary  Public, 

New  York  County,  No.  169. 

New  York  Register,  No.  4022. 

(5)  Order  appointing  appraiser 

The  order  granted  upon  this  application  follows  this 
form: 

At  a  Surrogates'  Court  held  in  and 
for  the  County  of  New  York  at 
the  Hall  of  Records  in  the 
Borough  of  Manhattan,  City  of 
New  York,  on  the  15th  day  of 
July,  1912. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate 

In  the  Matter  of  the  Transfer 

Tax  upon  the  Estate  of  ... 

Order  Appointing  Appraiser. 
JOHN  JACOB  ASTOR, 

Deceased. 


On  reading  and  filing  the  petition  of  Nicholas  Biddle,  one  of 
the  executors  of  the  last  Will  and  Testament  of  John  Jacob 
Astor,  deceased,  I  do  hereby,  pursuant  to  the  requirements  of 


NECESSARY    PARTIES  77 

§  230  of  Chapter  LX  of  the  Consolidated  Laws  direct  John  V. 
Coggey,  Esq.,  to  fix  the  fair  market  value  of  the  property  which 
was  of  the  above-named  decedent,  and  which  is  subject  to  the 
payment  of  any  tax  imposed  by  Article  X,  Chapter  62  of  the 
Laws  of  1909  and  the  acts  amendatory  thereof  and  supple- 
mental thereto.  JOHN  P.  COHALAN, 

Surrogate. 

(6)  Necessary  parties 

In  preparing  the  petition  for  the  appointment  of  the 
appraiser  the  practitioner  should  be  careful  to  include  the 
names  and  addresses  of  all  the  persons  or  corporations 
who  may  have  a  claim  or  interest  in  the  property  to  be 
appraised.  The  reason  for  this  is  that  the  appraiser  uses 
the  list  so  given  as  the  one  from  which  he  sends  out  the 
notices  of  appraisal.  Therefore,  if,  when  the  tax  proceed- 
ings are  underway  it  appears  that  all  the  persons  interested 
in  the  estate  have  not  been  included  in  the  petition,  it  will 
then  become  necessary  for  the  appraiser  to  send  out  a 
notice  to  such  additional  persons.  Matter  of  Wood,  40 
Misc.  155-156.  Comptroller  is  a  necessary  party.  §  230. 

IN  INTESTACY  there  should  be  set  forth  the  name  of 
the  widow  or  husband  and  the  names  of  all  the  heirs  at 
law  and  next  of  kin  in  cases  where  the  decedent  owned 
both  real  and  personal  property.  Where  the  decedent 
dies  possessed  of  only  personal  property  then  there  should 
be  given  the  name  of  the  husband  or  widow  and  the  names 
of  the  next  of  kin. 

WHERE  THERE  is  A  WILL  it  is  not  necessary  to  include 
the  names  of  any  persons  except  those  named  in  the  will  as 
beneficiaries.  Of  course,  if  there  is  a  will  contest,  then  the 
determination  as  to  who  would  be  the  interested  parties 
and  consequently  the  proper  parties  to  the  transfer  tax 
proceedings,  cannot  be  determined  until  the  will  contest 
is  out  of  the  way.  Matter  of  Westurn,  152  N.  Y.  93-103. 
The  statute  recognizes  the  possibility  of  this  contingency 
and  in  §  223  provides  that  if  "by  reason  of  claims  made 
upon  the  estate,  necessary  litigation  or  other  unavoidable 
cause  of  delay"  the  tax  cannot  be  determined  and  paid, 
then  the  10%  per  annum  penalty  shall  not  begin  to  run 


78  DESIGNATION    OF   APPRAISER   AND    NOTICE 

until  the  cause  of  the  delay  has  been  removed.    Vide  cases 
cited  sub  Interest  post,  page  721. 

(7)  Transferees  other  than  by  will  or  intestacy 

In  both  cases  of  testacy  and  intestacy,  there  should 
also  be  inserted  in  the  petition  for  the  appointment  of 
an  appraiser,  the  names  and  addresses  of  all  persons  sub- 
ject to  the  provisions  of  subdivisions  4  and  6  of  §  220. 
The  necessity  of  including  the  names  of  such  persons  is 
often  overlooked.  The  importance  of  including  the 
correct  names  and  addresses  hi  this  petition  is  due  to  the 
fact  that  failure  to  give  the  statutory  notice  is  a  jurisdic- 
tional  defect.  Matter  of  McPherson,  104  N.  Y.  306-321; 
Matter  of  Wolfe,  137  N.  Y.  205-213;  Matter  of  Winters, 
21  Misc.  552-555. 

"THE    ORDERLY   AND    ECONOMICAL   ADMINISTRATION    OF 

THE  TRANSFER  TAX  STATUTE  requires  that  all  questions 
arising  in  connection  with  the  taxability  of  the  assets  of  an 
estate  should  be  determined  in  one  proceeding."  Matter 
of  Catherine  G.  Leeds,  N.  Y.  Law  Journal,  April  23,  1913. 
In  the  Leeds  estate  an  appraiser  was  appointed  and  the 
executors  filed  the  customary  affidavit  of  assets.  They 
did  not  include  in  the  list  of  assets  certain  property  in 
which  the  decedent  had  a  life  interest.  The  trustee  of 
the  fund  in  which  decedent  had  a  life  interest  petitioned 
the  surrogate  under  the  first  sentence  of  §  231  asking  for 
an  order  declaring  that  the  transfer  of  the  remainder  was 
not  taxable.  Surrogate  Fowler  in  denying  the  application 
said,  that  "while  technically  it  may  not  constitute  a  part 
of  the  estate  of  Catherine  G.  Leeds  at  the  tune  of  her 
death,  the  word  estate  in  the  title  of  the  transfer  tax 
proceeding  is  used  in  a  general  sense  and  comprehends  all 
property  passing  to  beneficiaries  or  legatees  either  under 
the  will  of  Catherine  G.  Leeds  or  by  virtue  of  any  deed  of 
trust  executed  by  her.  *  *  *  Therefore  the  taxa- 
bility of  the  interest  of  Catherine  G.  Leeds  in  the  corpus 
of  the  trust  fund  which  passed  upon  her  death  to  her 
heirs  should  be  determined  in  the  proceeding  now  pending 
before  the  appraiser  for  the  purpose  of  appraising  the 


NOTICE   SHOULD  BE   EXPLICIT  79 

assets  of  her  estate  under  the  provisions  of  the  Transfer 
Tax  Law.  The  application  for  exemption  is  therefore 
denied,  but  without  prejudice  to  the  right  of  the  heirs  and 
legatees  of  Catherine  G.  Leeds  to  raise  this  question  before 
the  appraiser  in  the  proceeding  now  pending  before  him  to 
determine  the  tax  upon  the  estate  of  Catherine  G.  Leeds, 
deceased." 

(8)  Notice  should  be  explicit  as  to  property  to  be  ap- 

praised 

Justice  Gaynor  in  Matter  of  Backhouse,  110  App.  Div. 
737-739,  affirmed,  without  opinion,  185  N.  Y.  544,  said: 
"The  surrogate  had  power  to  modify  his  decree,  and 
should  have  done  so,  first,  because  the  said  children  were 
not  bound  by  it  in  so  far  as  it  imposed  the  tax  in  respect  of 
the  property  they  took  under  their  grandfather's  will, 
for  they  were  only  notified  of  an  appraisal  of  their  father's 
estate,  and  that  was  therefore  the  limit  of  the  jurisdiction 
of  the  appraiser  and  surrogate  on  their  default."  Vide 
etiam  decision  of  Surrogate  Beckett  hi  Matter  of  Lowndes, 
60  Misc.  506  (1908). 

The  practice  has  not,  in  many  instances,  followed  the 
rule  laid  down  in  the  Backhouse  case,  supra.  It  would 
seem,  however,  that  Justice  Gaynor's  statement  of  the 
law  is  accurate,  and  that  the  notice  of  the  appraiser  should 
be  explicit  as  to  the  property  to  be  appraised,  especially 
when  the  appraiser  purposes  to  appraise  property  that 
"while  technically  it  may  not  constitute  a  part  of  the 
estate"  of  the  decedent,  still  is  to  be  appraised  in  the 
decedent's  estate  under  the  rule  laid  down  in  the  Leeds 
case,  supra. 

(9)  Practice  in  New  York  County 

In  many  of  the  counties  the  practice  as  to  the  sending 
of  the  notice  is  as  outlined  supra,  page  74.  In  New  York 
the  practice  is  for  the  attorney  for  the  estate  to  obtain  a 
certified  copy  of  the  order  appointing  appraiser  and  to 
file  it  with  the  transfer  tax  appraiser  designated  in  the 
order.  The  appraiser  will  not  receive  this  certified  copy 


80  DESIGNATION    OF   APPRAISER  AND   NOTICE 

of  the  order,  however,  unless  there  is  filed  with  it  an  affida- 
vit for  appraisal.  Upon  filing  with  the  appraiser  one 
certified  copy  of  said  order  and  one  copy,  not  certified,  of 
the  petition  upon  which  the  order  was  granted,  the 
original  affidavit  for  appraisal  and  two  copies  of  said 
affidavit,  the  appraiser  for  the  first  time  takes  cognizance 
of  the  proceeding. 

The  appraiser  thereupon,  in  accordance  with  the 
provisions  of  the  third  sentence  of  §  230,  sends  out,  by 
mail,  a  notice  to  all  the  persons  named  in  the  petition. 
The  notice  is  in  the  following  form: 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 


Notice  of  Appraisal. 


In  the  Matter  of  the  Appraisal, 
under  the  Transfer  Tax  Law, 
of  the  Estate  of 
MARGARET  MACNEILAN, 

Deceased. 

You  will  please  take  notice,  that,  by  virtue  of  an  order  of  one 
of  the  Surrogates  of  the  County  of  New  York,  made  and  dated 
the  4th  day  of  October,  1912,  and  pursuant  to  the  provisions 
of  the  law  relating  to  Taxable  Transfers  of  property,  I  shall  on 
the  llth  day  of  December,  1912,  at  11 :15  o'clock  in  the  forenoon 
of  that  day,  at  room  No.  2900,  City  Investing  Building,  165 
Broadway,  in  the  Borough  of  Manhattan,  City  of  New  York, 
proceed  to  appraise,  at  its  fair  market  value,  all  the  property 
of  said  above-named  decedent,  late  of  the  County  of  New  York, 
passing  by  the  last  Will  and  Testament  or  by  the  Intestate 
Laws  of  said  State,  which  is  subject  to  the  payment  of  the  tax 
imposed  by  the  said  law. 

Dated  New  York,  November  27,  1912. 

SOLOMON  GOLDENKRANZ, 

Appraiser. 

The  statute  does  not  provide  any  time  for  said  notice, 
and  the  courts  have  not  laid  down  any  rule.  There  must 
be  a  reasonable  time,  however.  The  appraiser  usually 
gives  a  ten  days'  notice  unless  some  of  the  parties  reside 
at  a  great  distance  from  the  place  of  appraisal,  in  which 


SPECIAL   GUARDIAN  81 

case  the  length  of  time  of  the  notice  is  made  to  conform  to 
the  circumstances. 

If  all  the  parties  appear  by  attorney  who  hi  his  notice 
of  appearance  waives  notice  of  hearing  the  appraiser  will 
dispense  with  the  same  except  to  the  state  comptroller 
who  usually  accepts  a  short  notice.  There  is  a  rule  hi  the 
office  of  the  appraisers  of  New  York  County  that  "no  hear- 
ing will  be  placed  upon  the  calendar  on  less  than  forty- 
eight  hours'  notice." 

(10)  Special  guardian 

The  last  paragraph  of  §  231  provides  that  the  surrogate 
may  at  any  stage  of  the  proceedings  appoint  a  special 
guardian.  It  was  formerly  the  practice  to  appoint  special 
guardians  but  this  practice  is  now  discouraged  by  the 
courts.  Matter  of  Post,  5  App.  Div.  1 13 ;  Matter  of  Kemp, 
7  App.  Div.  609,  affirmed,  on  opinion  below,  151  N.  Y. 
619;  Matter  of  Jones,  54  Misc.  202. 


PROCEDURE 


THE  APPRAISAL 


(1)  Duties   of   appraiser   as   de- 

fined by  statute. 

(2)  Surrogate   may   act   as    ap- 

praiser. 

(3)  Application  to  surrogate  to 

declare  estate  exempt. 

(4)  Proceedings   before   the   ap- 

praiser. 

(5)  The  record  must  be  complete. 

(6)  Report   will   be   remitted   if 

record  insufficient. 


(7)  The  affidavit  for  appraisal. 

(8)  Form    for    affidavit    of    ap- 

praisal. 

(9)  One  original  and  two  copies 

to  be  filed  with  appraiser. 

(10)  Instructions  issued  by  ap- 

praisers' office. 

(11)  Preparation  of  schedules. 

(12)  Schedule    D  —  Beneficiaries 

and  their  interests. 


(l)  Duties  of  appraiser  as  defined  by  statute 

The  statute  (second  sentence  of  §230)  provides  that 
the  surrogate  "shall  by  order  direct"  the  appraiser  "to 
fix  the  fair  market  value  of  property  of  persons  whose 
estates  shall  be  subject  to  the  payment  of  any  tax  imposed 
by  this  article."  It  then  proceeds  to  define  the  duties 
of  the  appraiser  as  follows:  "Every  such  appraiser  shall 
forthwith  give  notice  by  mail  to  all  persons  known  to 
have  a  claim  or  interest  in  the  property  to  be  appraised, 
including  the  state  comptroller,  and  to  such  persons  as 
the  surrogate  may  by  order  direct,  of  the  time  and  place 
when  he  will  appraise  such  property. 

"  He  shall  at  such  time  and  place  appraise  the  same  at 
its  fair  market  value  as  herein  prescribed;  and  for  that 
purpose  the  said  appraiser  is  authorized  to  issue  subpoenas 
and  to  compel  the  attendance  of  witnesses  before  him 
and  to  take  the  evidence  of  such  witnesses  under  oath 
concerning  such  property  and  the  value  thereof;  and  he 
shall  make  report  thereof  and  of  such  value  in  writing,  to 
the  said  surrogate,  together  with  the  depositions  of  the 
witnesses  examined,  and  such  other  facts  in  relation 
thereto  and  to  said  matter  as  the  surrogate  may  order 
or  require." 

For  cases  regarding  functions  of  appraiser  vide  page  596. 
82 


APPLICATION   TO    DECLARE    ESTATE   EXEMPT  83 

(2)  Surrogate  may  act  as  appraiser 

The  foregoing  are  the  only  statutory  provisions  relative 
to  the  duties  of  an  appraiser,  except  that  the  first  sen- 
tence of  §231  provides  that  "the  surrogate  may  so  de- 
termine the  cash  value  of  all  such  estates  and  the  amount 
of  tax  to  which  the  same  are  liable,  without  appointing  an 
appraiser."  Under  the  authority  thus  conferred  the  sur- 
rogate sometimes  acts  as  appraiser.  Matter  of  Baker, 
38  Misc.  151-152,  affirmed,  178  N.  Y.  575;  Matter  of  Cam- 
eron, 97  App.  Div.  436-437,  affirmed,  181  N.  Y.  560; 
Matter  of  Costello,  189  N.  Y.  288-290. 

If  the  surrogate  elects  to  act  as  appraiser,  his  duties 
and  powers  are  similar  to  those  of  the  appraiser  as  set 
forth  in  the  above  quoted  portion  of  §  230. 

(3)  Application  to  surrogate  to  declare  estate  exempt 

As  a  matter  of  general  practice  the  surrogate  does  not 
act  as  appraiser,  but  directs  an  official  appraiser  to  fix 
the  fair  market  value.  An  application  to  declare  estate 
exempt  is  frequently  made,  however,  to  the  surrogate, 
and  if  a  clear  case  is  established  the  surrogate  will  grant 
an  order  declaring  estate  free  from  tax.  This  is  in  effect 
an  appraisal  by  the  surrogate,  and  the  application  should 
be  made  on  notice.  Matter  of  Collins,  104  App.  Div. 
184;  Matter  of  Schmidt,  39  Misc.  77. 

THE  NOTICE  OF  MOTION  should  be  served  upon  the  at- 
torney for  the  state  comptroller,  and  if  all  the  parties 
interested  in  the  estate  do  not  unite  in  the  petition  it 
would  seem  that  a  notice  of  motion  should  be  served  on 
those  not  joining.  It  is  not  the  practice,  however,  to 
insist  upon  notice  being  given  to  anyone  other  than  the 
state  comptroller. 

The  facts  entitling  the  estate  to  exemption  should  be 
very  fully  set  forth  in  the- petition.  No  set  form  can  be 
given  for  such  affidavit,  but  it  is  suggested  to  counsel 
that  there  be  used  the  same  form  as  the  affidavit  for  ap- 
praisal post,  page  87. 

UPON  THE  RETURN  DAY  if  the  attorney  for  the  state 
comptroller  does  not  raise  an  objection  and  the  petition 


84  THE   APPRAISAL 

is  in  proper  form  the  surrogate  usually  grants  the  order. 
If,  however,  there  is  an  objection  on  the  part  of  the  at- 
torney for  the  state  comptroller  and  it  is  made  to  appear 
that  there  is  a  question  whether  the  estate  is  or  is  not 
exempt,  the  surrogate  ordinarily  denies  the  applica- 
tion. 

THE  ORDER  exempting  estate  customarily  follows  this 
form: 

At  a  Surrogates'  Court  held  in  and 
for  the  County  of  New  York 
in  the  Hall  of  Records,  Borough 
of  Manhattan,  New  York  City, 
on  the  6th  day  of  August,  1913. 


Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 

Order  Declaring  Estate  Exempt. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of 
ELLEN  DOWER, 
Deceased. 


Upon  reading  and  filing  the  verified  petition  of  Adelaide  Van 
Tassell  Brett,  executrix  under  the  last  will  and  testament  of  the 
above  named  Ellen  Dower,  deceased,  wherein  it  appears  that 
the  said  decedent  died  on  February  14th,  1913,  a  resident  of  the 
County  of  New  York,  and  that  the  transfer  of  the  property  of 
the  said  decedent  is  not  subject  to  tax  under  the  law  relating  to 
taxable  transfers  of  property,  and  that  due  notice  of  this  appli- 
cation was  given  to  Thomas  E.  Rush,  attorney  for  the  State 
Comptroller,  and  after  hearing  Ernst,  Lowenstein  &  Cane, 
attorneys  for  the  executrix  herein,  in  support  of  the  said  appli- 
cation and  the  attorney  for  the  State  Comptroller  stating  in 
open  Court  that  there  was  no  opposition  to  granting  the  relief 
prayed  for, 

Now,  on  motion  of  Ernst,  Lowenstein  &  Cane,  the  said  attor- 
neys for  the  executrix,  it  is  hereby 

ORDERED,  ADJUDGED  and  DECREED  that  the  transfer  of  the 
property  of  the  above  entitled  estate  be  and  the  same  hereby  is 
declared  to  be  exempt  from  taxation  under  the  laws  relating  to 
taxable  transfers  of  property. 

JOHN  P.  COHALAN, 

Surrogate. 


THE   RECORD   MUST  BE    COMPLETE  85 

(4)  Proceedings  before  the  appraiser 

AT  THE  TIME  AND  PLACE  mentioned  in  the  notice  (vide 
supra,  page  80),  the  appraiser  will  proceed  to  appraise 
the  property.  No  witnesses  need  be  produced  unless 
the  appraiser,  or  the  attorney  for  the  state  comptroller, 
after  examining  the  papers,  asks  that  testimony  be  taken. 
In  a  majority  of  the  cases  coming  before  the  appraisers, 
no  testimony  is  taken.  If  the  appraiser  requires  addi- 
tional information,  he  usually  is  satisfied  with  a  supple- 
mental affidavit. 

If  TESTIMONY  is  taken  the  rules  of  evidence  apply;  vide 
Testimony,  post,  page  853. 

(6)  The  record  must  be  complete 

AT  THE  HEARING  the  appraiser  in  examining  the  papers 
will  often  ask  for  information  regarding  certain  allega- 
tions in  the  schedules.  The  attorney  for  the  estate  will 
thereupon  make  an  oral  statement  which  clearly  explains 
the  items  in  question,  and  he  is  then  apt  to  think  that 
the  incident  is  closed.  As  a  matter  of  fact  it  is  not.  It 
is  necessary  for  the  attorney  to  file  a  supplemental  affida- 
vit or  affidavits  in  which  will  be  incorporated  the  expla- 
nations he  has  given  to  the  appraiser.  The  reason  of 
this  is  very  clear  because  everything  upon  which  the  ap- 
praiser has  acted  must  be  in  the  record. 

It  may  not  be  possible  to  anticipate  every  question 
which  may  be  asked,  but  it  is  quite  possible  so  to  prepare 
the  schedules  as  to  anticipate  questions  which  would 
naturally  arise.  Much  confusion  will  be  avoided  it  at- 
torneys will  bear  in  mind  that  the  statute  provides  (fourth 
sentence  of  §  230)  that  after  the  appraiser's  work  is  fin- 
ished "he  shall  make  report  thereof"  to  the  surrogate.  It 
is  the  surrogate,  not  the  appraiser,  who  determines  the 
tax.  Matter  of  Fuller,  62  App.  Div.  428-431,  citing  the 
first  sentence  of  §  231. 

The  surrogate  cannot  pass  upon  the  report  of  the  ap- 
praiser unless  the  entire  matters  considered  by  the  ap- 
praiser are  before  him.  It  therefore  behooves  the  attorney 
for  the  estate  to  see  that  the  record  is  complete.  The 


86  THE   APPRAISAL 

very  fact  the  papers  require  explanation  establishes  that 
they  should  be  supplemented  so  the  surrogate  will  have 
before  him  a  complete  record  of  facts  upon  which  to  base 
his  acceptance  or  rejection  of  the  report  of  the  appraiser. 

(6)  Report  will  be  remitted  if  record  insufficient 

It  is  not  an  infrequent  occurrence  for  the  surrogate 
to  remit  the  appraiser's  report  for  this  reason.  In  Matter 
of  Froelich,  N.  Y.  Law  Journal,  April  30,  1913,  the 
surrogate  remitted  to  the  appraiser  the  report  because 
"that  part  of  his  report  upon  which  the  surrogate  must 
depend  for  the  facts  necessary  to  a  determination  of 
the  correctness  of  the  appraiser's  conclusions,  is  entirely 
insufficient  to  enable  the  surrogate  to  determine  the  ques- 
tion raised."  Vide  etiam  Matter  of  Valentine,  N.  Y.  Law 
Journal,  December  4,  1913,  post,  page  622. 

(7)  The  affidavit  for  appraisal 

THE   RECORD   TRANSMITTED   TO   THE   SURROGATE   in   an 

ordinary  case  consists  of  the  affidavit  for  appraisal.  This 
record  should  be  complete.  It  should  state  facts  and 
not  conclusions.  If  the  volume  of  business  were  not 
so  great,  it  might  be  that  each  transfer  tax  proceeding 
would  resolve  itself  into  a  trial  the  purpose  of  which 
would  be  to  discover  all  the  taxable  assets  in  a  decedent's 
estate,  but  this  cannot  be,  and  as  a  result  a  great  propor- 
tion of  the  estates  are  passed  upon  in  affidavit  form.  If 
the  affidavit  is  properly  prepared  and  the  estate  is  not 
a  complicated  one  its  disposition  is  quickly  made.  If 
the  affidavit  is  carelessly  prepared  then  there  arises  the 
necessity  for  supplemental  affidavit  or  affidavits. 

There  is  no  set  form  for  the  affidavit,  but  in  certain 
counties  there  has  been  prepared  by  the  state  comptroller's 
office  a  printed  form  of  affidavit  with  printed  schedules. 

THE  ADVANTAGE  TO  THE   PRACTITIONER  IN  USING  THIS 

PRINTED  FORM  is  that  the  appraiser  by  looking  through 
the  form  can  readily  see  whether  anything  has  been 
stricken  out  and  if  there  has  not,  he  knows  at  a  glance 
that  all  the  technical  questions  required  by  the  practice 


FORM    FOR   AFFIDAVIT   FOR   APPRAISAL  87 

and  rulings  of  the  surrogate  have  been  covered  in  the 
affidavit.  On  the  other  hand,  if  an  attorney  prepares 
an  affidavit  it  becomes  necessary  to  read  the  affidavit 
carefully  for  the  purpose  of  discovering  whether  all  the 
essential  allegations  are  therein  contained.  It  is  there- 
fore suggested  to  the  practitioner  that  if  the  proceeding 
is  hi  a  county  where  forms  are  furnished  that  he  obtain 
from  the  appraisers'  office  the  printed  form  and  use  it 
rather  than  one  of  his  own  composition.  If  he  desires  to 
change  the  form,  his  changes  can  be  readily  observed 
and  passed  upon  if  made  on  the  printed  form. 

(8)  Form  for  affidavit  for  appraisal 

The  printed  form  commonly  in  use  is  as  follows: 


SURROGATE'S  COURT,  COUNTY  OF 

Affidavit  for  Appraisal. 


In  the  Matter  of  the  Ap- 
praisal, under  the  Trans- 
fer Tax  Law  of  the 
Estate  of 

Deceased. 


The  affidavit  of  administrator  executor  of  the  estate 

of  the  above-named  decedent,  for  the  determination  of  the  tax, 
if  any,  to  be  paid  upon  the  assets  of  the  said  estate  under  the 
Law  in  Relation  to  Taxable  Transfers  of  Property  respectfully 
shows: 

First:  That  the  said  decedent  died  a  resident  of  the  State  of 

New   York   on   the  day   of  191  ,    Intestate, 

leaving  a  Last  Will  and  Testament,  copy  of  which  is  hereto  annexed, 

which  was  duly  admitted  to  probate  by  the  Surrogate's  Court  of 

County,  on  the  day  of  191  ,  and  that  Letters 

of  Administration  Testamentary  were  duly  issued  by  the  said 

Surrogate's  Court  of  County  on  the  day  of  , 

191  ,  to  this  deponent,  whose  post  office  address  is  and 

whose  post  office  address  is  and  whose 

post  office  address  is 

Second:  That  as  such  administrator  executor  deponent  is  per- 
sonally familiar  with  the  affairs  of  said  estate,  the  property  con- 
stituting the  assets  thereof  and  their  fair  market  value,  and  with 
the  debts,  expenses  and  charges  properly  and  legally  liable  as 


88  THE   APPRAISAL 

deductions  therefrom.  That  the  decedent  at  the  time  of  his  or 
her  death  had  no  safe  deposit  box  except 

That  to  the  best  of  deponent's  knowledge,  information  and 
belief,  there  is  no  person  better  informed  than  deponent  upon 
the  said  affairs  of  this  estate  excepting  ,  who  is  in  pos- 

session of  special  knowledge  as  to  said  matters,  or  some  of  them, 
and  whose  supplemental  affidavit  is  hereunto  annexed. 

Third:  That  Schedule  A  hereunto  annexed  in  its  various  sub- 
schedules  sets  forth  fully  and  in  detail  all  the  real  property  in 
the  State  of  New  York,  and  all  the  personal  property  wheresover 
situated,  owned  by  the  decedent  or  in  which  said  decedent  had 
any  right,  title  or  interest  at  the  time  of  his  or  her  death,  or  of 
which  he  or  she  made  any  gift,  grant  or  conveyance  in  contem- 
plation of  death,  or  to  take  effect  at  or  after  death,  or  which  by 
reason  thereof,  fell  into  or  became  part  of  the  assets  of  this  estate 
by  reversion,  remainder  or  otherwise,  excepting  such  as  may 
have  passed  by  virtue  of  the  exercise  by  the  decedent  of  any 
power  of  appointment  vested  in  him  or  her  by  the  Will  or  Deed 
or  other  instrument  of  another,  and  enumerated  hi  Schedule  C. 

Schedule  Al  sets  forth  each  and  every  parcel  of  real  estate  in 
the  State  of  New  York  of  which  decedent  died  seized  and  pos- 
sessed, or  in  which  he  or  she  had  any  right,  title  or  interest,  to- 
gether with  a  statement  of  the  liens  and  encumbrances  upon 
each  at  the  date  of  death,  giving  in  the  case  of  mortgages,  the 
date,  place,  liber  and  page  of  record  thereof.  It  also  sets  forth 
hi  the  first  marginal  column  the  assessed  valuation  of  each  of 
said  parcels  for  the  year  in  which  the  decedent  died  and  in  the 
second  marginal  column  the  estimated  market  value  thereof 
(as  appraised  by  a  competent  expert  in  real  estate  values,  whose 
supplemental  affidavit  is  herewith  submitted). 

Schedule  A2  sets  forth  all  of  the  moneys  left  by  the  decedent 
at  the  time  of  his  or  her  death,  whether  in  his  immediate  pos- 
session, standing  to  his  credit  or  in  which  he  had  any  right,  title 
or  interest,  in  banks  of  deposit,  savings  banks,  trust  companies, 
or  other  institutions,  individually,  giving  also  separately  the 
accrued  interest  thereon,  if  any,  down  to  the  last  interest  day 
prior  to  decedent's  death  in  the  case  of  savings  banks,  and  down 
to  the  date  of  decedent's  death  in  all  other  cases. 

Schedule  A3  sets  forth  all  wearing  apparel,  jewelry,  silverware, 
pictures,  books,  works  of  art,  household  furniture,  horses,  car- 
riages, automobiles,  boats,  and  any  and  all  other  personal  chattels 
of  whatsoever  kind  or  nature,  left  by  the  decedent,  together 


FORM   FOR  AFFIDAVIT   FOR   APPRAISAL  89 

with  the  fairly  estimated  market  value  thereof  (as  appraised  by 
a  competent  expert  whose  supplementary  affidavit  is  herewith 
submitted).  It  also  contains  a  statement  of  all  bonds  and  mort- 
gages held  by  decedent  and  of  all  claims  due  and  owing  decedent 
at  the  time  of  his  or  her  death,  and  of  all  the  promissory  notes 
or  other  instruments  in  writing  for  the  payment  of  money  of 
which  he  or  she  died  possessed,  of  whatsoever  nature,  with  in- 
terest thereon,  if  any  (except  such  as  are  included  in  the  state- 
ment of  the  decedent's  interest  in  a  co-partnership  or  business 
set  forth  in  Schedule  A5],  giving  the  face  values  and  estimated 
fair  market  values  thereof  and  if  such  estimated  fair  market 
values  be  less  than  the  face  value,  setting  forth  in  brief  the  rea- 
son for  such  depreciation  as  to  each  item.  Said  Schedule  A3 
also  contains  a  statement  of  any  and  all  moneys  payable  to  the 
estate  from  life  insurance  policies  carried  by  decedent. 

Schedule  A4  sets  forth  all  the  corporate  stocks,  bonds  with 
accrued  interest  thereon  to  the  date  of  decedent's  death,  or  other 
investment  securities  owned  by  the  decedent  at  the  time  of  his 
or  her  death,  with  the  market  value  thereof  at  such  time,  and  in 
the  case  of  rare  and  unlisted  corporate  securities  giving  the  State 
of  incorporation  of  the  corporation  issuing  the  same,  its  capital- 
ization, the  value  and  nature  of  its  assets,  its  liabilities,  its  sur- 
plus, the  book  value  of  its  stock,  the  dividends  paid  and  any 
other  facts  which  may  be  pertinent  affecting  the  value  of  said  se- 
curities. 

Schedule  AS  sets  forth  the  interest  of  decedent  at  the  time  of 
his  or  her  death  in  any  co-partnership  or  business,  stating  the 
nature  and  location  thereof,  the  total  capital  employed,  the 
gross  profits,  expenses  and  net  profits  of  the  business  for  at  least 
three  years  prior  to  decedent's  death,  and  any  other  facts  per- 
taining to  such  business  as  may  be  pertinent  to  a  fair  and  just 
appraisal  of  decedent's  interest  in  said  business  and  the  good- 
will thereof.  (Submitted  to  the  appraiser  herewith  is  a  certif- 
icate and  two  copies  thereof  showing  the  amount  of  the  dece- 
dent's interest  in  such  business  and  good-will  thereof,  made  by 
a  competent  accountant). 

Schedule  A6  sets  forth  in  itemized  form,  together  with  the  fair 
market  value  thereof,  any  other  property  owned  or  left  by  de- 
cedent at  the  time  of  his  or  her  death  and  not  included  in  the 
preceding  sub-schedules,  or  in  Schedule  E. 

Fourth:  That  Schedule  B  hereunto  annexed  in  its  various  sub- 
schedules  sets  forth  the  funeral  expenses,  ministration  expenses 


90  THE  APPRAISAL 

and  counsel  fees  paid  or  incurred  in  connection  with  the  estate, 
together  with  the  debts  of  and  claims  against  the  decedent  (ex- 
cept liens  and  incumbrances  upon  real  estate),  whether  allowed, 
paid  or  contested  and  rejected  by  the  administrator  executor. 
Deponent  also  claims  to  be  allowed  as  a  deduction  herein  the 
lawful  commissions  of  the  administrator  executor  and  trustee. 

Schedule  Bl  sets  forth  the  funeral  expenses.  Schedule  B2  sets 
forth  the  expenses  of  administration  and  counsel  fees  paid  or 
estimated.  Schedule  B8  sets  forth  the  valid  debts  due  and  owing 
by  decedent  at  the  time  of  his  or  her  death  and  allowed  as  just 
and  fair  by  the  administrator  executor,  together  with  a  separate 
list  of  such  claims  as  have  been  contested  or  rejected  by  him 
(except  such  as  enter  into  the  computation  of  decedent's  interest 
in  any  co-partnership  or  business  as  set  forth  in  Schedule  A6}. 
Schedule  B4  sets  forth  any  and  all  items  claimed  by  the  admin- 
istrator executor  as  proper  deductions  herein,  and  not  included  hi 
the  prior  sub-schedules. 

Fifth:  That  Schedule  C  hereunto  annexed  sets  forth  all  the 
property,  real  and  personal,  which  passed  at  decedent's  death 
by  virtue  of  the  exercise  by  him  or  her  of  any  power  of  appoint- 
ment vested  hi  him  or  her  by  the  will,  deed  or  other  instrument 
of  another,  together  with  the  fair  market  value  of  each  and  every 
item  thereof  and  a  statement  in  brief  of  the  source  and  derivation 
of  such  power,  copies  of  which  will,  deed  or  other  instrument  are 
submitted  herewith.  Said  Schedule  C  also  sets  forth  all  sums  by 
way  of  commissions  properly  and  legally  chargeable  against 
such  property. 

Sixth:  That  Schedule  D  hereunto  annexed  contains  a  state- 
ment of  the  names  of  all  persons  beneficially  interested  hi  this 
estate  at  the  time  of  decedent's  death,  the  nature  of  their  respec- 
tive interests,  their  relationship  if  any  to  the  decedent,  together 
with  the  ages  at  the  time  of  decedent's  death  of  all  minors, 
annuitants  and  beneficiaries  for  life  under  decedent's  will,  if  any. 
It  also  contains  a  statement  showing  which  of  the  beneficiaries 
named  hi  decedent's  will,  if  any,  died  prior  to  decedent,  the  dates 
of  their  deaths,  their  survivors,  and  the  relationship  of  such 
survivor  to  decedent. 

Seventh:  That  Schedule  E  sets  forth  property  of  every  kind 
held  by  the  decedent  in  trust  for  or  jointly  with  another  or  others. 

Eighth:  That  deponent  has  made  due  and  diligent  search  for 
property  of  every  kind,  nature  and  description  left  by  the  dece- 
dent, and  has  been  able  to  discover  only  that  set  forth  in  Sched- 


FORM   FOR   AFFIDAVIT   FOR  'APPRAISAL  91 

ules  A  and  E,  and  that  no  information  of  other  property  of  the 
decedent  has  come  to  his  or  her  knowledge,  and  that  he  verily 
believes  that  decedent  left  no  property  except  as  therein  set 
forth.  That  all  the  sums  claimed  as  deductions  in  Schedule  B 
are  lawful,  just  and  fair,  that  to  the  best  of  deponent's  knowl- 
edge, information  and  belief,  the  decedent  made  no  gift,  grant 
or  conveyance  of  any  property,  real  or  personal,  in  contempla- 
tion of  death,  or  to  take  effect  at  or  after  death,  except  as  may 
be  so  specifically  set  forth  in  the  appropriate  sub-schedule  of 
Schedule  A. 

Deponent  further  says  that  wherever  hi  any  of  said  sub- 
schedules  the  word  "none"  has  been  written  in  or  wherever 
such  sub-schedule  has  been  left  blank,  such  word  or  omission 
is  to  be  taken  as  equivalent  to  an  affirmative  allegation  by  de- 
ponent that  the  decedent  left  no  property  of  the  land  to  which 
said  sub-schedule  relates. 

Dated,  New  York  City  ,  191  . 

State  of  New  York,  ]  - 

r*  t  I  ss: 

County  of 

,  being  duly  sworn,  says  that  he  is  the  affiant  named 
in  the  foregoing  affidavit  for  appraisal,  that  he  has  read  the  said 
petition  and  the  schedules  thereunto  annexed,  and  knows  the 
contents  thereof,  and  that  same  are  true  of  his  own  knowledge, 
except  as  to  the  matters  therein  stated  to  be  alleged  on  infor- 
mation and  belief,  and  that  as  to  those  matters  he  believes  them 
to  be  true. 
Sworn  to  before  me  this 

day  of  ,  191 

State  of  New  York, 

i    so  • 

County  of 

,  being  duly  sworn,  says  that  he  resides  at 
That  by  reason  of  the  fact  that 


he  has  special  knowledge  of  the  articles  and  things  set  forth  in 

Schedules  of    the    affidavit    of  ,    verified    the 

day  of  ,  19     ,  hereunto  annexed.    That  he  has 

read  said  Schedules  and  knows  the  contents  thereof. 


92  THE    APPRAISAL 

That  the  values  of  the  assets  therein  set  forth  and  the  several 
sums  claimed  as  deductions  therein  are  just  and  true  to  best  of 
deponent's  own  information  and  belief,  and  that  the  deponent 
hereby  adopts  said  Schedules  ,  and  accepts  and  makes 

same  part  of  this  affidavit  as  if  here  set  forth  fully  and  in  detail. 
Deponent  further  says  he  knows  of  no  other  property  left  by  de- 
cedent herein  except  as  set  forth  at  Schedule  A  of  said  appli- 
cation. 
Sworn  to  before  me  this 

day  of  ,   191 

(9)  One  original  and  two  copies  to  be  filed  with  ap- 

praiser 

There  should  be  filed  with  the  appraiser  one  original 
of  the  affidavit  and  two  copies  thereof.  In  pursuance 
of  the  provisions  of  the  last  sentence  of  §  230  the  appraiser 
is  required  to  make  his  report  in  duplicate,  one  of  which 
he  files  in  the  office  of  the  surrogate  and  the  other  in  the 
office  of  the  state  comptroller.  The  third  copy  is  re- 
tained in  the  office  of  the  appraiser  as  an  office  copy  for 
his  files. 

One  certified  copy  of  the  order  appointing  appraiser 
and  one  copy  of  the  petition  upon  which  the  order  is  made 
are  filed  with  the  appraiser  as  indicated  supra,  page  79. 
With  this  exception  there  should  be  filed  three  of  all 
other  papers,  one  original  and  two  copies.  If  the  original 
of  any  paper  introduced  in  evidence  is  not  required  to 
be  filed,  then  there  should  be  furnished  three  copies. 

(10)  Instructions  issued  by  appraisers'  office 

In  the  counties  of  Kings  and  New  York  the  appraisers' 
office  issue  instructions  for  the  use  of  the  forms  as  follows: 

The  following  instructions  regarding  the  use  of  the  accom- 
panying forms  are  issued  for  the  guidance  of  counsel  in  the 
preparation  of  cases  for  the  Transfer  Tax  proceeding. 

These  particular  forms  are  designed  for  estates  of  RESIDENT 

DECEDENTS  Only. 

They  are  available  for  use  by  either  executors  or  administra- 
tors. When  used  by  either,  strike  out  the  allegations  in  the 
petition  applicable  to  the  other.  In  cases  where  supplementary 
affidavits  of  appraisal  are  not  to  be  submitted,  strike  out  the 


INSTRUCTIONS   ISSUED   BY  APPRAISERS'    OFFICE        93 

allegation  in  parenthesis  in  the  body  of  the  petition  referring 
thereto. 

The  use  of  these  forms  is  not  intended  to  preclude  the  sub- 
mission of  supplementary  affidavits  as  to  any  matter  relevant 
to  the  appraisal  and  not  covered  by  the  allegations  contained  in 
the  petition,  nor  to  preclude  the  taking  of  testimony  whenever 
necessary. 

The  affidavit  of  verification  and  a  supplemental  affidavit  to 
be  filled  in  and  sworn  to  by  any  person  having  more  particular 
knowledge  than  the  executor  or  administrator  as  to  the  items 
of  assets  or  deduction  contained  in  any  sub-schedule  will  be 
found  on  the  inside  page  of  the  back  cover. 

Nothing  but  the  schedule  and  sub-schedule  sheets  are  to  be 
placed  within  the  cover  form.  Three  copies  of  the  will,  and  of 
any  and  of  all  supplementary  papers  are  to  be  submitted  sepa- 
rately as  heretofore. 

Counsel  will  please  be  particularly  careful  to  see  that  the 
values  placed  upon  the  several  items  of  assets  and  the  items  of 
deductions  claimed  are  typewritten  in  only  in  the  columns  of 
the  appropriate  sub-schedules  designated,  "  ESTIMATED  MARKET 
VALUE,"  "AMOUNT"  AND  "CLAIMED,"  as  the  case  may  be. 
As  to  the  real  estate,  the  assessed  valuation  for  the  year  of  the 
decedent's  death  must  also  be  given  in  the  column  provided 
therefor.  NOTHING  is  TO  BE  WRITTEN  IN  THE  COLUMNS  DESIG- 
NATED "VALUE  AS  APPRAISED  IN  THIS  PROCEEDING"  AND  "AL- 
LOWED." These  are  intended-to  be  filled  in  by  the  Appraiser  at 
or  subsequent  to  the  hearing. 

The  sub-schedule  sheets  are  furnished  to  counsel  loose  so  that 
they  may  be  conveniently  run  through  the  typewriter.  When 
returned  to  this  office,  they  are  to  be  put  through  the  type- 
writer here  to  receive  the  figures  fixed  and  determined  by  the 
Appraiser,  in  the  column  designated  "VALUE  AS  APPRAISED  IN 
THIS  PROCEEDING,"  therefore  they  must  be  returned  loose  or 
held  by  temporary  clips  only.  They  must  not  be  permanently 
bound. 

Should  it  be  necessary  to  use  additional  sheets  for  any  sched- 
ule, please  have  the  same  ruled  in  double  column  in  all  respects 
like  the  printed  form.  Such  additional  sheets  may,  however, 
be  designated  by  the  sub-schedule  number  only  as  A4,  B3,  etc. 

Assets,  deductions  and  all  other  data  relating  to  POWER  OP 
APPOINTMENT  PROPERTY,  must  be  set  forth  in  SCHEDULE  C 

ONLY. 


94  THE    APPRAISAL 

As  to  any  property  standing  in  the  name  of  the  decedent, 
jointly  or  in  trust  for  any  other  person,  counsel  are  required  to 
submit  supplementary  affidavits  setting  forth  the  precise  facts 
and  circumstances  relative  thereto. 

(11)  Preparation  of  the  schedules 

The  schedules  should  be  so  prepared  as  not  to  require 
supplemental  information  in  order  to  perfect  the  record. 
This  seems  a  declaration  of  the  self-evident,  but  the  ex- 
amination, in  the  course  of  duty,  of  many  proceedings 
impels  the  belief  that  some  attorneys  do  not  appreciate 
the  advisability  of  having  the  papers  properly  prepared  in 
the  first  instance. 

SUPPLEMENTAL  AFFIDAVITS  ARE  TO  BE  AVOIDED.  From 
the  standpoint  of  the  appraiser  it  means  multiplying  his 
work  for  the  reason  that  when  the  supplemental  affidavit 
comes  in  he  has  to  take  up  the  case  anew  to  see  whether 
it  meets  the  requirements.  And  this  is  not  all,  for  fre- 
quently some  new  angle  will  develop  from  the  supplemen- 
tal affidavit  which  will  require  further  elucidation.  This 
means  delay,  and  increased  labor  on  the  part  of  the  ap- 
praiser and  the  attorney  for  the  estate  as  well  as  for  the 
attorney  for  the  state  comptroller. 

With  the  exception  of  Schedule  D  the  schedules  have 
been  taken  up  ad  seriatim  in  the  following  chapters. 

(12)  Schedule  D — Beneficiaries  and  their  interests 
This  is  the  schedule  which  the  appraiser  examines  to  find 

out  how  the  property  of  the  decedent  is  to  be  distributed. 
It  should  contain  a  statement  of  the  names  of  all  persons 
beneficially  interested  in  the  estate  at  the  time  of  dece- 
dent's death,  the  nature  of  their  respective  interests,  their 
relationship,  if  any,  to  the  decedent,  together  with  the  ages 
at  the  time  of  decedent's  death  of  all  minors,  annuitants 
and  beneficiaries  for  life  under  decedent's  will,  if  any. 

It  should  also  contain  a  statement  showing  which  of  the 
beneficiaries  named  hi  decedent's  will,  if  any,  died  prior 
to  decedent.  Morgan  v.  Cowie,  49  App.  Div.  612-615. 

If  the  devise  or  bequest  to  beneficiaries  who  prede- 
cease testator  does  not  fall  into  the  residuary  estate  then 


BENEFICIARIES   AND   THEIR   INTEREST  95 

set  forth  facts  to  show  to  whom  interest  goes.  For  in- 
stance, if  one-half  of  a  certain  sum  is  bequeathed  to  A, 
a  daughter  of  testator,  and  the  other  half  to  B,  a  sister  of 
testator,  with  the  proviso  that  the  share  of  each  shall  go 
to  the  descendants  if  the  beneficiary  does  not  survive,  and 
either  or  both  A  and  B  die  sooner  than  the  testator, 
leaving  descendants,  give  the  facts  which  will  enable  the 
appraiser  to  make  proper  distribution. 

As  to  death  of  residuary  legatee  vide  discussion  in 
Matter  of  Hoffman,  201  N.  Y.  247. 

In  case  of  intestacy  give  the  stirpes.  Do  not  say  A,  B, 
C,  D  and  E,  grandchildren,  but  A  and  B,  children  of  X,  a 
daughter  who  predeceased  decedent,  and  C,  D  and  E, 
children  of  Y,  a  son  who  predeceased  decedent. 

If  claim  to  lower  rates  under  subdivision  1  of  §  22 la 
is  made  because  of  the  beneficiary  being  an  adopted 
child,  set  forth  the  facts  of  the  adoption.  Matter  of 
Fisch,  34  Misc.  146-147;  Matter  of  Butler,  58  Hun,  400, 
affirmed,  without  opinion,  136  N.  Y.  649. 

Mutually  acknowledged  relationship  of  parent  and  child 
should  be  established  if  beneficiary  is  to  obtain  benefit 
of  the  lower  rates.  Matter  of  Birdsall,  22  Misc.  180-187, 
affirmed,  without  opinion,  43  App.  Div.  624;  Matter  of 
McMurray,  96  App.  Div.  128;  Matter  of  Davis,  98  App. 
Div.  546-549,  reversed  on  other  points  in  184  N.  Y.  299. 

Beneficiary  is  competent  witness  to  give  "  evidence 
bearing  upon  question  of  the  relation  and  the  acknowl- 
edgment thereof  between  himself  and  the  testator."  Mat- 
ter of  Brundage,  31  App.  Div.  348-352,  and  cases  cited 
post,  page  857. 


PROCEDURE 

THE  SCHEDULES  OF  ASSETS 


(1)  Schedule  A1 — Real  property. 

Foreign  real  estate  not  tax- 
able. 

Certificate  under  §  236. 

Rent. 

Assessed  value. 

Appraisal  by  real  estate  ex- 
pert. 

Mortgages  to  be  deducted. 

Dower. 

Taxes. 

Devolution  of  title. 

(2)  Schedule  A2— Cash  on  hand 

and  on  deposit. 
Accrued  interest. 
Discrepancies 

(3)  Schedule  A3 — Personal  chat- 

tels, mortgages,  promis- 
sory notes,  claims  due 
decedent,  life  insurance. 

Occupation    of    decedent. 

Wearing  apparel. 

Tangible  property  within 
state. 

Jewelry,     silverware,     etc. 

Expert  appraisals  must  be 
in  affidavit  form. 

Must  be  itemized. 

Mortgages. 

Claims  in  favor  of  dece- 
dent. 


Unrecorded  operations  of 
the  appraiser's  mind. 

Life  insurance  policy. 

Absence  from  schedules  of 
property  specified  in  will. 

Property  in  safe  deposit 
not  belonging  to  dece- 
dent. 

Debt  forgiven  by  will. 

(4)  Schedule  A4 — corporate  stock 

and  bonds. 
Listed  securities. 
Rule  hi  the  Kennedy  case. 
Large  blocks  of  stock. 
Pledged  securities. 
Real  estate  corporation. 

(5)  Schedule  A5 — interest  of  de- 

cedent hi  any  co-partner- 
ship or  business. 

Certificate  of  accountant. 

Assets  of  a  co-partnership 
not  within  state. 

(6)  Schedule  A6 — Property  not  in- 

cluded mother  schedules. 
Interest  in  the  estate  of  an- 
other. 

(7)  Schedule    C — Power   of   ap- 

pointment. 

(8)  Schedule  E — Property  held  in 

trust  for  or  jointly  with 
others. 


"It  is  unfortunately  true,"  said  Surrogate  Baker,  Yates 
County,  in  Matter  of  Jones,  65  Misc.  121-123,  "that 
many  of  our  citizens  are  disposed  to  look  upon  a  breach 
of  our  tax  laws  as  a  matter  of  thrift  and  to  believe  that 
they  may  violate  such  laws  without  being  conscious  of 
moral  turpitude." 

That  this  is  not  the  attitude  of  all  is  shown  by  the  fact 
that  in  transfer  tax  proceedings  most  people  are  con- 
96 


SCHEDULE  A1 — REAL  PROPERTY  97 

scientious  to  the  last  penny.  However,  it  must  be  ac- 
knowledged, there  are  those  who  come  within  Surrogate 
Baker's  delineation.  As  a  result  it  has  become  the  practice 
to  inquire  very  thoroughly  into  the  assets  of  the  estate, 
and  also  to  scrutinize  with  critical  eye  the  deductions 
demanded. 

The  following  schedules  are  designed  to  cover  the  ques- 
tions which  are  apt  to  arise. 

(1)  Schedule  A1  — Real  Property 

In  this  Schedule  A1  should  be  set  forth  each  and  every 
parcel  of  real  estate  in  the  State  of  New  York  of  which 
the  decedent  died  seized  or  in  which  he  had  any  right, 
title  or  interest. 

REAL  ESTATE  SITUATED  WITHOUT  THE  STATE  OF  NEW 
YORK  is  NOT  TAXABLE  and  should  not  be  set  forth  in  the 
schedules.  Matter  of  Swift,  137  N.  Y.  77;  Keeney  v. 
New  York,  222  U.  S.  525-537. 

CONTRACT  OF  SALE  OF  LANDS  IN  ANOTHER  STATE  en- 
tered into  before  decedent's  death,  but  deed  not  delivered 
until  day  after  death  was  held  not  taxable  hi  Matter  of 
Baker,  67  Misc.  360. 

CERTIFICATE  UNDER  §  236.  In  preparing  this  schedule 
it  is  well  to  bear  in  mind  that  the  last  paragraph  of  §  236 
provides:  "Any  person  shall,  upon  the  payment  of  fifty 
cents,  be  entitled  to  a  certificate  of  the  state  comptroller 
that  the  tax  upon  the  transfer  of  any  real  estate  of  which 
any  decedent  died  seized  has  been  paid,  such  certificate 
to  designate  the  real  property  upon  which  such  tax  is  paid, 
the  name  of  the  person  so  paying  the  same,  and  whether 
in  full  of  such  tax.  Such  certificate  may  be  recorded  in  the 
office  of  the  county  clerk  or  register  of  the  county  where 
such  real  property  is  situate,  in  a  book  to  be  kept  by  him 
for  that  purpose,  which  shall  be  labeled  'transfer  tax." 

After  the  proceeding  is  all  over  and  the  certificate  re- 
ferred to  is  applied  for  it  will  be  found  that  the  certificate 
will  contain  a  description  of  the  real  estate  as  it  appeared 
in  this  Schedule  A1.  Therefore  it  behooves  the  one  who  is 
preparing  Schedule  A1  to  make  the  description  definite 
7 


98  THE    SCHEDULES   OF   ASSETS 

enough  to  be  of  service  when  the  time  comes  to  obtain  the 
certificate  under  §  236.  As  to  just  how  definite  this  descrip- 
tion should  be  depends  upon  the  location  and  character 
of  the  property.  In  many  cases  the  last  deed  description 
could  be  used.  In  addition  there  should  be  given  a  brief 
recital  of  the  improvements,  if  any,  erected  upon  the 
premises.  If  there  are  no  improvements,  so  state. 

"RENT  reserved  to  the  deceased  which  had  accrued  at 
the  time  of  his  death,"  subd.  7  of  §  2712  of  Code  of  Civil 
Procedure  and  §  2720,  is  an  asset  and  should  be  set  forth. 

THE  LAST  ASSESSED  VALUE  before  decedent's  death 
should  be  given  for  each  parcel  of  land. 

APPRAISAL  BY  REAL  ESTATE  EXPERT.  It  is  the  practice 
for  the  appraiser  to  ask  the  estate  to  furnish  an  appraisal 
of  the  real  estate  by  a  competent  expert.  This  affidavit 
should  be  complete  enough  to  show  to  the  appraiser  that 
the  person  who  makes  it  is  qualified  as  an  expert  in  values 
of  real  estate  in  the  neighborhood  of  the  property  ap- 
praised. 

THE  FORM  OF  AFFIDAVIT  should  conform  with  the  cir- 
cumstances of  the  case.  The  following  is  one  in  general 
use. 

Surrogates'  Court,  County  of  Ne\v  York. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of 
JOHN  JONES, 

Deceased. 


Affidavit  as  to  Value  of 
Real  Estate. 


County  of  New  York,  ss: 

John  Doe,  being  duly  sworn,  deposes  and  says  that  he  has 
been  for  the  past  twenty  years  and  more  a  resident  of  the  City 
and  County  of  New  York  and  during  that  time  continuously 
engaged  as  a  real  estate  auctioneer  and  broker  in  the  purchase, 
sale  and  appraisement  of  lands  and  buildings  in  said  City  and 
County.  That  his  place  of  transacting  business  is  No.  165 
Broadway,  Borough  of  Manhattan,  City  of  New  York. 

Deponent  says  that  he  is  familiar  with  values  of  real  estate 
in  said  county,  and  especially  in  the  immediate  neighborhood 
of  the  property  herein  appraised.  That  he  knows  the  value  of 


SCHEDULE  A1 — REAL  PROPERTY  99 

the  property  belonging  to  the  estate  of  the  above  named  dece- 
dent; that  he  has  not  any  personal  interest  in  said  property  and 
is  not  in  any  way  connected  with  said  estate  or  the  attorney 
of  said  estate. 

Deponent  says  that  at  the  request  of  Richard  Roe,  Esq.,  at- 
torney for  Henry  Smith,  executor  of  said  estate,  he  has  made  on 
the  10th  day  of  November,  1913,  a  personal  examination  of  the 
real  estate  of  the  aforesaid  decedent  for  the  purpose  of  ascer- 
taining its  fair  market  value  on  the  15th  day  of  October,  1913, 
at  which  time,  as  this  deponent  is  informed,  the  aforesaid  John 
Jones,  a  resident  of  the  County  of  New  York,  died  seized  of 
the  parcel  of  real  estate  hereinafter  described. 

Location:  No.  1880 Avenue,  east  side,  60.5  feet  south 

of Place,  Borough  of  the .    Dimensions  of  Land: 

32  x-feet  by  9  feet,  see  diagram,  Size  of  Building:  about 

20  x  25  feet,  Stories  in  height:  Two  stories, 

Materials  of  Building:  Frame  on  stone  foundation, 
Purpose  of  use:  Dwelling,  old  and  adds  very  little,  if  anything, 
to  the  value  of  the  land. 

(Diagram) 

These  premises  are  designated  on  the  Tax  Maps  of  the  City 
of  New  York  as  Borough  of  the  —  — ,  Section  eleven,  Volume 
four,  Block  2950,  Lot  16. 

The  sum  for  which  said  premises  were  assessed  by  the  City 
of  New  York  for  the  taxes  due  and  payable  on  the  1st  day  of 
May,  1914,  was  five  thousand  seven  hundred  and  fifty  dol- 
lars. 

The  sum  for  which  it  rents  annually  is  six  hundred  dollars. 

The  fair  market  value  of  said  premises  at  the  time  of  the 
death  of  the  within  named  decedent,  namely,  the  15th  day  of 
October,  1913,  was,  in  the  opinion  of  this  deponent,  six  thou- 
sand two  hundred  and  fifty  dollars.  That  in  arriving  at  the  said 
fair  market  value  deponent  has  taken  into  consideration  actual 
sales  of  neighboring  real  estate  similarly  situated  during  the 
year  immediately  preceding  said  15th  day  of  October,  1913. 

JOHN  DOE. 
Sworn  to  before  me  this 

22nd  day  of  November,  1913. 
PETER  ROE, 
Notary  Public, 

New  York  County. 


100  THE    SCHEDULES   OF   ASSETS 

THE    AFFIDAVIT   OF   THE    REAL   ESTATE    EXPERT    should 

always  recite  the  assessed  value.  The  appraiser  gauges 
to  some  extent  the  value  of  the  real  estate  by  its  assessed 
value.  If  the  appraisal  is  less  than  the  assessed  value  the 
affidavit  of  appraisal  should  give  fully  the  reasons  why  the 
value  is,  in  the  opinion  of  the  real  estate  expert  making 
the  affidavit,  less  than  the  assessed  value.  From  the 
standpoint  of  the  transfer  tax  appraiser  there  is  a  strong 
presumption  that  the  real  estate  is  worth  at  least  the 
assessed  value,  as  otherwise  the  decedent  in  his  lifetime 
would  have  had  the  assessment  reduced. 

COMPETENT  EVIDENCE  OF  VALUE  of  real  estate  is  in- 
sisted upon  by  the  surrogate.  Vide  §  122  of  Decedent 
Estate  Law,  page  113. 

In  Matter  of  Mitchell,  N.  Y.  Law  Journal,  March  9, 
1912,  Surrogate  Cohalan  remitted  the  appraiser's  report 
for  further  evidence  as  to  the  value  of  decedent's  real 
estate,  the  surrogate  saying:  " There  was  no  competent 
evidence  before  the  appraiser  as  to  the  value  of  decedent's 
interest  in  the  farm  at  Great  Neck  or  the  real  estate  at 
Wading  River,  Long  Island.  The  fact  that  this  property 
had  been  appraised  by  a  transfer  tax  appraiser  of  Nassau 
County  in  June,  1906,  at  a  certain  valuation  would  not 
warrant  the  appraiser  herein  in  accepting  that  valua- 
tion as  the  clear  market  value  of  the  property  in  Decem- 
ber, 1910." 

As  to  SALE  PRIOR  TO  APPRAISAL  vide  Matter  of  Arnold, 
114  App.  Div.  244-246.  SALE  SUBSEQUENT  TO  APPRAISAL 
vide  Matter  of  Meyer,  209  N.  Y.  386,  post,  page  397; 
opinion  of  surrogate  in  same  case  quoted  from  post,  page 
812. 

IF  THE  STATE  COMPTROLLER  IS  NOT  SATISFIED  with  the 

valuation  placed  upon  the  real  estate  by  the  expert  for 
the  estate,  he  will  present  to  the  appraiser  an  affidavit  of 
another  expert  engaged  on  behalf  of  the  state  comptroller. 
In  the  large  majority  of  cases  the  question  of  the  valuation 
of  the  real  estate  is  settled  upon  the  affidavits  submitted. 
However,  in  some  cases  the  point  is  of  sufficient  impor- 
tance to  justify  the  taking  of  testimony  and  the  cross- 


SCHEDULE  A1 — REAL  PROPERTY          10! 

examination  on  the  witness  stand  of  the  experts  who  have 
placed  the  valuation  upon  the  real  estate. 

Such  a  situation  arose  in  Matter  of  Turner,  N.  Y.  Law 
Journal,  July  8,  1913,  and  the  executrices  not  being  satis- 
fied with  the  determination  arrived  at  by  the  appraiser 
took  an  appeal  under  the  first  sentence  of  §  232  from  the 
pro  forma  order  entered  under  §  231.  Surrogate  Cohalan 
in  affirming  the  report  said:  "Upon  the  hearing  before 
the  appraiser  real  estate  experts  were  examined  on  behalf 
of  the  estate  in  order  to  show  the  value  of  decedent's 
real  property  in  this  county.  A  real  estate  expert  was  also 
examined  on  behalf  of  the  state  comptroller.  There  was 
a  material  difference  between  their  estimates  of  the  value 
of  decedent's  real  property.  The  appraiser  adopted  the 
valuation  of  the  state  comptroller's  expert.  An  examina- 
tion of  the  testimony  shows  that  this  valuation  was  not 
unreasonable  or  unwarranted,  and  the  surrogate  therefore 
will  not  interfere  with  the  finding  of  the  appraiser." 

IF  DEDUCTION  is  ASKED  FOR  MORTGAGES  give  the  names 
of  mortgagor  and  mortgagee,  the  date  of  the  mortgage, 
its  maturity  date,  rate  of  interest,  date  and  place  of 
recording  mortgage  and  liber  and  page  of  mortgage.  If 
any  payment  has  been  made  on  account  of  the  mortgage, 
so  state.  Also  calculate  and  set  out  interest  accrued  and 
unpaid  to  the  date  of  the  death  of  decedent. 

Mortgages  should  be  deducted  from  the  value  of  the 
real  estate  and  therefore  should  be  inserted  in  Schedule 
A1  and  not  in  B3.  Matter  of  Sutton,  3  App.  Div. 
208-212,  affirmed,  on  opinion  below,  149  N.  Y.  618; 
Matter  of  Berry,  23  Misc.  230;  Kitching  v.  Shear,  26  Misc. 
436-438;  Matter  of  Offerman,  25  App.  Div.  94. 

As  TO  BLANKET  MORTGAGES  vide  Matter  of  Tremberger, 
N.  Y.  Law  Journal.  March  6,  1912,  opinion  quoted  post, 
page  659;  etiam  same  case  in  N.  Y.  Law  Journal,  Octo- 
ber 31,  1913,  post,  page  661. 

UNPAID  TAXES  assessed  against  the  real  estate  prior  to 
the  decedent's  death,  are  proper  deductions  and  should 
be  set  forth.  As  to  what  constitutes  assessment  vide 
Matter  of  Babcock,  115  N.  Y.  450;  Matter  of  Freund,  143 


102  THE    SCHEDULES   OF  ASSETS 

App.  Div.  335-337,  affirmed,  on  opinion  of  McLaughlin,  J., 
below,  202  N.  Y.  556;  Matter  of  Maresi,  74  App.  Div.  76- 
79;  Matter  of  Brundage,  31  App.  Div.  348;  Matter  of 
Liss,  39  Misc.  123;  Matter  of  Hoffman,  42  id.  90,  citing 
subd.  2  of  §  2719  of  Code  of  Civil  Procedure.  In  setting 
forth  the  taxes  give  the  year  for  which  they  were  assessed. 

IF  DOWER  is  CLAIMED  as  a  deduction  give  date  of  birth 
of  widow.  Vide  cases  cited  sub  Dower.  Do  not  attempt 
to  compute  the  dower,  for  the  statute  provides  (third 
paragraph  of  §  230  and  second  paragraph  of  §  231)  that 
the  calculation  is  to  be  made  by  the  superintendent  of 
insurance;  the  practice  is  for  the  appraiser,  acting  on 
behalf  of  the  surrogate  to  make  the  request  for  such 
calculation. 

As  to  tables  used  by  superintendent  of  insurance  vide 
post,  page  581. 

DEVOLUTION  OF  TITLE  should  be  given  where  the 
interest  of  the  decedent  is  other  than  a  fee  simple  in  the 
entire  property.  This  does  not  mean  that  it  is  necessary 
to  give  an  abstract  of  the  title  of  decedent,  but  the  record 
should  be  made  complete  enough  to  show  what  the  interest 
is  and  how  the  interest  arose.  Matter  of  Willets,  119 
App.  Div.  119,  affirmed,  without  opinion,  190  N.  Y.  527, 
furnishes  an  illustration  of  the  trouble  caused  in  inher- 
itance tax  proceedings  by  reason  of  failure  to  observe 
this  rule. 

(2)  Schedule  A2 — Cash  in  hand  and  on  deposit. 

ALL  MONEYS  left  by  the  decedent  at  the  tune  of  his 
death,  whether  in  his  immediate  possession,  standing  to 
his  credit  or  hi  which  he  had  any  right,  title  or  interest, 
in  banks  of  deposit,  savings  banks,  trust  companies,  or 
other  institutions,  should  be  itemized  and  set  forth  in 
this  schedule.  This  means  money  wherever  situated,  and 
deposits  no  matter  whether  in  a  New  York  or  foreign 
bank.  Subdivisions  1  and  4  of  §  220  and  §  243. 

JOINT  AND  TRUST  ACCOUNTS  should  be  set  forth  in 
Schedule  E. 

INTEREST   ACCRUED    and    unpaid,    distinct   from   the 


SCHEDULE   A2 — CASH   IN   HAND,    ETC.  103 

principal,  should  be  set  forth  separately.  In  the  case  of 
savings  banks  interest  should  be  given  down  to  the  last 
interest  day  prior  to  decedent's  death;  in  all  other  cases 
down  to  the  date  of  death.  Accrued  interest  to  date  of 
death  has  been  held  to  be  subject  to  the  tax.  Matter  of 
Vassar,  127  N.  Y.  1-8;  Matter  of  Hewitt,  181  N.  Y.  547, 
opinion  not  reported,  vide  post,  page  301. 

Trifling  as  it  may  seem  the  failure  of  attorneys  to  ob- 
serve the  rule  regarding  interest  causes  much  annoyance. 
If  for  any  reason  the  account  does  not  draw  interest  it 
should  be  so  stated.  Or  if  the  attorney  cannot  con- 
veniently give  separately  the  accrued  interest,  then  there 
should  be  an  affirmative  statement  that  the  amount  given 
includes  interest. 

ACCOUNTS  WITH  BROKERAGE  FIRMS  should  be  accom- 
panied with  a  statement  of  the  nature  of  the  account. 

DISCREPANCIES  very  frequently  occur  between  the 
amount  stated  in  the  application  for  waiver  under  §  227 
and  the  sum  appearing  in  this  schedule.  The  reason  for 
the  variances  should  be  explained,  as  for  instance: 

SCHEDULE  A 

A2.  CASH  IN  HAND  AND  ON  DEPOSIT 

Value  as 
appraised 
Amount  in  this 
proceeding 

Cash  in  hand  $  168.32 

Bowery  Savings  Bank,  Book  No.  784,349  345.86 
Interest  to   last    interest    day   prior   to 

death  of  decedent  3.15 

The  amount  as  set  forth  in  my  application  for 
waiver  to  the  Comptroller  of  the  State  of 
New  York  is  in  excess  of  the  amount  above 
set  forth  by  reason  of  the  fact  that  the  figure 
mentioned  in  the  application  for  waiver  was 
an  offhand  estimate  made  prior  to  balancing 
the  pass  book  of  the  decedent.  The  amount 
above  given  is  the  correct  amount. 


104  THE    SCHEDULES   OF   ASSETS 

Chemical  National  Bank  $3,746.75 

No  Interest  allowed 

The  amount  as  set  forth  hi  my  application  for 
waiver  to  the  Comptroller  of  the  State  of 
New  York  is  hi  excess  of  the  amount  above 
set  forth  because  intermediate  between  the 
time  of  decedent's  death  and  the  probate  of 
the  will  certain  collections  from  outstanding 
accounts  due  to  decedent  were  made  and 
deposited  in  the  decedent's  account  in 
Chemical  National  Bank.  The  amount 
above  given  is  the  correct  amount  on  deposit 
at  the  time  of  decedent's  death.  The  collec- 
tions so  made  are  set  forth  hi  Schedule  A3. 

Columbia-Knickerbocker  Trust  Com- 
pany 1,600.00 

Accrued  interest  thereon  to  date  of 

decedent's  death  16.34 

German  Savings  Bank,  Book  No. 
45372  $3,000.00 

Does  not  include  interest  because  decedent 
had  withdrawn  from  the  bank  all  interest 
accrued  down  to  and  including  the  last 
interest  day  prior  to  his  death. 

Sometimes  an  estate  is  unfortunate  in  having  an  account 
in  a  BANK  WHICH  HAS  BEEN  CLOSED.  If  this  contingency 
arises  a  statement  should  be  made  setting  forth  just  what 
the  condition  is  regarding  the  account  so  far  as  the  affiant 
is  able  to  state.  In  such  a  case  it  is  often  possible  to  get 
an  affidavit  from  one  in  a  position  to  make  authoritative 
statements  and  if  this  is  so  an  affidavit  should  be  obtained 
and  annexed  to  the  papers. 

By  error  attorneys  will  sometimes  give  as  the  amount 
on  deposit  to  the  credit  of  the  decedent  a  sum  collected 
and  deposited  since  decedent's  death.  This  should  not 
be  done  for  what  the  statute  requires  is  an  appraisal  of 
the  property  of  which  decedent  died  seized  or  possessed. 
Subdivision  1  of  §  220.  Deposits  so  made  usually  come 
from  the  debts  due  the  decedent,  dividends  on  securities 


SCHEDULE   A3 — PERSONAL   CHATTELS,    ETC.  105 

or  money  realized  by  the  legal  representatives  of  the  estate 
upon  the  sale  of  property  of  the  decedent.  These  items 
should  be  set  under  their  proper  headings  and  not  under 
this  Schedule  A2  which  is  designed  to  include  only  the 
cash  in  hand  and  on  deposit  at  the  time  of  decedent's 
death. 

(3)  Schedule  A3 — Personal  chattels,  mortgages,  prom- 
issory notes,  claims  due  decedent,  life  insurance 

OCCUPATION  OF  DECEDENT  should  be  given.  If  he  had 
no  occupation  at  the  time  of  his  death,  so  state.  The 
reason  for  this  is  that  this  information  will  aid  the  ap- 
praiser to  form  an  opinion  regarding  the  character  and 
extent  of  the  personal  chattels  of  decedent.  Frequently 
attorneys  will  file  affidavits  which  will  state  that  the 
decedent  had  absolutely  no  personal  effects.  The  almost 
inevitable  result  of  such  a  statement  is  that  the  appraiser 
requires  a  supplemental  affidavit  explaining  why  the 
decedent  was  devoid  of  personal  belongings.  Attorneys 
should  anticipate  this  natural  inquiry. 

WEARING  APPAREL  is  an  item  which  sometimes  causes 
unnecessary  concern.  In  the  cases  where  the  clothing  of 
the  decedent  is  of  the  ordinary  kind  make  a  statement  as 
to  its  nature,  and  if  it  has  no  market  value  say  so.  If, 
however,  there  are  garments  of  value  such  as  furs,  laces, 
embroideries  and  the  like,  then  an  appraisal  should  be 
submitted,  with  an  itemized  list.  Vide  Matter  of  Astor, 
post,  page  107. 

THE  1911  AMENDMENT.  It  should  be  borne  in  mind  in 
the  preparation  of  this  Schedule  A3  that  chapter  732  of 
the  Laws  of  1911,  in  effect  July  21,  1911,  made  a  very 
important  change  relative  to  the  imposition  of  a  tax  upon 
tangible  personal  property  of  a  resident.  The  law  as  now 
amended  provides  that  in  the  case  of  a  resident  the  tax  is 
imposed  on  the  transfer  "of  any  intangible  property,  or  of 
tangible  property  within  the  state."  Subdivisions  1  and  4  of 
§  220.  For  wording  before  the  1911  amendment  vide  Prior 
Statutes,  post,  page  520. 

THE  WORDS  "  TANGIBLE  PROPERTY,"  the  1911  amend- 


106 

ment  to  §  243  provides,  shall  be  taken  to  mean  ''corporeal 
property  such  as  real  estate  and  goods,  wares  and  mer- 
chandise, and  shall  not  be  taken  to  mean  money,  deposits 
in  bank,  shares  of  stock,  bonds,  notes,  credits  or  evidences 
of  an  interest  in  property  and  evidences  of  debt."  It 
further  provides  that  the  words  "intangible  property" 
shall  be  taken  to  mean  "  incorporeal  property,  including 
money,  deposits  in  bank,  shares  of  stock,  bonds,  notes, 
credits,  evidences  of  an  interest  in  property  and  evidences 
of  debt." 

THE  AMENDMENT  is  NOT  RETROACTIVE,  and  therefore 
it  applies  only  to  transfers  made  since  the  amendment 
went  into  effect.  Matter  of  Abraham,  151  App.  Div.  441 ; 
Matter  of  Webber,  id.  539;  Matter  of  Niles,  N.  Y.  Law 
Journal,  January  5,  1912;  Matter  of  Bolton,  157  App. 
Div.  935,  appeal  pending. 

THERE  SHOULD  BE  SEPARATELY  LISTED  the  tangible 
property  within  the  state.  No  reported  judicial  ruling  on 
the  subject  has  been  made,  but  the  practice  is  to  ask  that 
all  the  tangible  personal  property  be  set  forth.  In  a  non- 
resident estate  it  has  been  held  that  "  there  is  no  reason 
why  the  executor  of  the  will  should  be  put  to  the  annoy- 
ance and  expense  of  preparing  inventories  and  exhibiting 
the  condition  of  an  estate  as  to  items  not  taxable  in  the 
State  of  New  York."  Matter  of  Bishop,  82  App.  Div. 
112-115. 

If  the  claim  is  made  that  certain  of  the  tangible  property 
of  which  the  decedent  died  seized  or  possessed  is  not 
subject  to  tax  because  it  was  not  within  the  state,  the 
practitioner  should  set  forth  very  clearly  where  such 
property  was  located  without  the  state  at  the  time  of  the 
death  of  decedent  and  the  circumstances  under  which  it 
was  so  located. 

JEWELRY,  SILVERWARE,  PICTURES,  BOOKS,  WORKS  OF 
ART,  household  furniture,  horses,  carriages,  automobiles, 
boats,  wearing  apparel,  and  any  and  all  other  personal 
chattels  of  whatsoever  kind  or  nature  are  to  be  set  forth 
in  this  schedule.  Such  of  the  property  as  is  subject  to  the 
tax  should  be  itemized  and  a  value  given  for  each  article. 


SCHEDULE    A3 — PERSONAL   CHATTELS,    ETC.  107 

It  must  be  remembered  that  the  duty  of  the  appraiser  is 
to  fix  the  fair  market  value  of  these  assets  and  he  cannot 
do  so  unless  they  are  described  in  such  a  way  as  to  permit 
of  his  passing  judgment  on  their  value. 

REPORT  OF  THE  APPRAISER  REMITTED  by  Surrogate 
Cohalan  in  Matter  of  Leggett,  N.  Y.  Law  Journal, 
January  13,  1911,  the  surrogate  saying:  "In  the  affidavit 
of  appraisal  of  personal  property  left  by  decedent,  con- 
sisting of  jewelry,  pictures,  household  furniture,  &c.,  there 
is  no  enumeration  or  description  of  the  articles  appraised, 
and  therefore  no  basis  upon  which  the  appraiser  or  the 
court  can  determine  the  correctness  or  accuracy  of  such 
appraisal.  The  appraiser's  report  will  be  remitted  to  him 
for  the  purpose  of  supplying  the  deficiencies  and  correcting 
the  errors  above  indicated." 

In  Matter  of  Caroline  W.  Astor,  N.  Y.  Law  Journal, 
February  3,  1910,  Surrogate  Cohalan  remitted  the  report 
of  the  appraiser.  An  appeal  was  taken  but  dismissed, 
137  App.  Div.  922,  because  it  was  not  an  order  appealable 
under  §  2570  of  the  Code  of  Civil  Procedure.  The  opinion 
of  the  surrogate  stated  that  the  report  was  remitted  for 
the  following  reasons: 

RECORD  SHOULD  SHOW  THAT  APPRAISAL  INCLUDES  ALL 
CHATTELS  IN  THIS  STATE. 

"The  decedent  died  in  October,  1908.  The  affidavit 
as  to  the  value  of  the  rugs,  furniture  and  bric-a-brac  was 
made  in  March,  1909.  This  affidavit  states  that  deponent 
made  an  examination  of  the  contents  of  the  premises 
No.  842  Fifth  Avenue  on  that  date.  This  affidavit  should 
be  supplemented  by  the  affidavit  of  some  one  acquainted 
with  the  rugs,  furniture  and  bric-a-brac  in  the  premises 
occupied  by  the  decedent  to  the  effect  that  the  articles 
mentioned  in  the  affidavit  constituted  all  the  furniture, 
rugs  and  bric-a-brac  belonging  to  the  decedent  in  this  State 
at  the  time  of  her  death. 

APPRAISALS  MUST  BE  IN  AFFIDAVIT  FORM. 

"The  report  also  contains  a  statement  made  by  Gorham 
&  Company  to  the  effect  that  they  examined  certain 
silverware  at  the  premises  of  the  decedent.  This  state- 


10S  THE    SCHEDULES   OF    ASSETS 

mcnt  is  insufficient;  it  should  be  in  the  form  of  an  affidavit 
with  the  qualifications  of  the  appraiser  duly  stated.  It 
should  also  be  supplemented  by  an  affidavit  to  the  effect 
that  the  silverware  in  question  was  fully  enumerated  in  the 
appraisal,  and  that  it  was  the  only  silverware  left  by  the 
decedent  in  the  State  of  New  York  at  the  time  of  her  death. 

"The  appraisal  made  by  Messrs.  Tiffany  &  Company 
as  to  the  value  of  decedent's  jewelry  should  also  be  in 
the  form  of  an  affidavit  instead  of  a  mere  statement  of  the 
value;  the  same  applies  to  the  statement  of  Messrs. 
Duveen  Brothers  as  to  the  value  of  the  antiques  and 
works  of  art. 

APPRAISALS  MUST  BE  ITEMIZED. 

"The  affidavit  of  Caroline  S.  Wilson  as  to  the  value  of 
the  LACES,  SHAWLS,  &c.,  left  by  the  decedent  is  insuffi- 
cient because  it  does  not  contain  an  itemized  statement  of 
the  value  of  the  various  articles  on  which  an  aggregate 
valuation  of  $5,000  is  placed;  secondly,  because  the  affiant 
does  not  state  her  qualifications  to  make  such  an  appraisal; 
and  in  addition  to  this,  she  is  a  party  in  interest." 

THE  PRACTICE  is  to  require  an  affidavit  as  to  the  value 
of  the  personal  property  to  be  made  by  some  competent 
expert  in  values  of  the  particular  kind  of  article  appraised 
by  him.  It  may  be  necessary  to  submit  affidavits  of 
several  experts  for  the  reason  that  the  expert  must  be  one 
who  is  experienced  in  values  of  the  particular  kind  of 
property  concerning  which  he  is  deposing.  For  instance, 
the  decedent  may  have  died  possessed  of  a  saloon  with  a 
stock  of  fixtures  and  liquors,  and  he  also  may  have  died 
possessed  of  jewels  and  precious  stones,  and  also  paintings 
and  works  of  art.  In  such  a  case  it  is  necessary  to  obtain 
appraisals  from  men  skilled  in  the  particular  subject  of 
the  property  appraised. 

NAME  AND  ARTIST  OF  PICTURES  SHOULD  BE  GIVEN.  In 
Matter  of  Kahn,  N.  Y.  Law  Journal,  March  16,  1912, 
Surrogate  Cohalan  remitted  the  report  of  the  appraiser, 
saying:  "The  appraiser  failed  to  insert  in  the  appropriate 
columns  the  value  placed  by  him  upon  the  different  items 
constituting  the  assets  of  decedent's  estate.  The  executor 


SCHEDULE  A3 — PERSONAL  CHATTELS,  ETC.     109 

alleges  in  his  affidavit  that  the  value  of  the  household 
furniture,  pictures  and  works  of  art  left  by  the  decedent 
was  the  sum  of  $5,000.  A  supplementary  affidavit  made 
by  Morris  Lowenbein  and  accepted  by  the  transfer  tax 
appraiser  gives  the  value  of  this  property  as  $3,022.  In 
Lowenbein's  affidavit  there  is  the  following  item:  '11 
pictures  (in  parlor),  $200;  7  pictures  (dining  room),  $85.' 
The  appraiser  should  give  the  title  of  each  of  the  pictures, 
and,  wherever  possible,  the  name  of  the  artist,  and  the 
value  of  each  picture." 

THE   ARRANGEMENT  OP  THE   ITEMIZED   LIST  of   chattels 

in  the  expert's  affidavit  of  appraisal  should  follow  the 
same  order  in  which  they  are  set  out  in  this  schedule. 
Frequently  there  will  appear  in  the  papers  a  list  of  assets 
several  pages  long.  It  is  part  of  the  duty  of  the  appraiser 
to  check  up  the  articles  in  the  affidavit  to  see  at  what  sum 
the  expert  has  valued  them  and  if  they  do  not  follow  the 
same  order  it  entails  additional  unnecessary  labor. 

MORTGAGES  held  by  decedent  should  be  included  in  this 
schedule.  There  should  be  given  the  names  of  the  parties, 
the  date  of  the  mortgage,  a  brief  designation  of  the  prem- 
ises mortgaged,  the  amount  of  the  principal,  the  interest 
rate  and  the  interest  dates,  the  place,  date,  liber  and  page 
of  recording  mortgage.  If  any  amount  has  been  paid  on 
account  of  the  principal  of  the  mortgage,  so  state,  giving 
date  of  payment. 

ACCRUED  INTEREST  ON  MORTGAGES  to  date  of  decedent's 
death  should  be  calculated  by  the  attorney  for  the  estate, 
and  be  separately  recited  under  the  principal  of  the  mort- 
gage. 

A  CLAIM  THAT  MORTGAGE  IS  NOT  WORTH  ITS  FACE  VALUE 

should  be  supported  by  a  very  complete  statement  of 
facts  so  that  the  appraiser  can  draw  his  own  conclusions 
as  to  the  value  of  the  mortgage. 

ALL  CLAIMS  in  favor  of  decedent  should  be  included  no 
matter  whether  the  representatives  of  the  estate  consider 
them  to  be  good  or  bad. 

The  question  of  the  value  of  the  claims  is  one  to  be 
determined  by  the  appraiser.  Give  him  the  facts  and  let 


110  THE    SCHEDULES   OF   ASSETS 

him  draw  the  conclusions.  Do  not  say  that  a  claim  is 
worthless,  but  tell  why  you  have  reached  the  conclusion 
that  it  is  worthless.  Calculate  the  interest,  if  any,  on  all 
claims  to  date  of  death  of  decedent  and  separately  state 
interest  underneath  the  amount  of  the  claim.  If  the 
claim  does  not  carry  interest,  so  state. 

PROMISSORY  NOTES  and  other  instruments  in  writing 
for  the  payment  of  money  should  be  set  forth  by  giving 
date,  name  of  maker,  interest  rate,  date  of  maturity,  and 
accrued  interest  to  date  of  decedent's  death.  If  you  claim 
that  they  are  not  worth  their  face  value,  state  in  full 
the  reasons  for  their  depreciation. 

UNRECORDED  OPERATIONS  OF  THE  APPRAISER'S  MIND. 
Surrogate  Fowler  remitted  to  the  appraiser  the  report  in 
Matter  of  DeWolf,  New  York  Law  Journal,  February  24, 
1913,  saying:  "As  the  only  evidence  before  the  appraiser 
showed  that  the  value  of  decedent's  bills  receivable 
account  did  not  exceed  20%  of  the  face  value  thereof, 
the  appraiser  was  not  justified  in  estimating  the  value  of 
the  account  at  50%  of  its  face  value." 

Remember  that  the  affidavits  submitted  to  the  ap- 
praiser form  the  record  upon  which  the  surrogate  passes. 
If  there  is  no  record  the  surrogate  cannot  pass  upon  the 
unrecorded  operations  of  the  appraiser's  mind.  As  was 
said  in  Matter  of  Kennedy,  113  App.  Div.  4-8,  neither  the 
appraiser  nor  the  surrogate  is  authorized  to  make  "an 
assessment  upon  suspicion." 

LIFE  INSURANCE  POLICIES  payable  to  the  estate  should 
be  listed;  give  the  name  of  the  life  insurance  company, 
the  number  of  the  policy,  and  the  amounts.  Matter  of 
Knoedler,  140  N.  Y.  377. 

WHEN  NOT  FOR  BENEFIT  OF  ESTATE  they  are  not  tax- 
able. Vide  Matter  of  Parsons,  117  App.  Div.  321-323; 
Matter  of  Elting,  78  Misc.  692;  Matter  of  Fay,  25  id.  468, 
opinions  cited  sub  Life  Insurance,  post,  page  736. 

ABSENCE  FROM  SCHEDULES  OF  PROPERTY  SPECIFIED  IN 
WILL  should  be  explained.  When  the  appraiser  sees  these 
articles  mentioned  in  the  will,  he  naturally  looks  to  this 
Schedule  A3  to  find  them  listed.  If  the  decedent  did  not 


SCHEDULE   A3 — PERSONAL   CHATTELS,   ETC.  Ill 

die  possessed  of  the  articles  mentioned  in  the  will,  then 
the  representative  of  the  estate  should  offer  an  explanation 
as  to  why  they  were  not  found  among  the  assets  of  the 
estate.  The  executors  are  under  the  burden  of  showing 
that  the  property  specifically  mentioned  in  the  will  has 
not  come  into  their  hands,  and  also  of  showing  they  have 
no  knowledge  or  information  on  the  subject  beneficial  to 
the  State.  Matter  of  Kennedy,  113  App.  Div.  4-9. 

If  the  will  was  made  a  short  time  before  the  death  of 
decedent,  and  property  specified  in  the  will  does  not 
appear  among  decedent's  assets,  a  very  natural  enquiry 
arises  as  to  whether  there  has  not  been  a  transfer  subject 
to  the  tax  under  the  provisions  of  subdivision  4  of  §  220. 
This  doubt  should  be  anticipated  by  submission  of  proof, 
in  affidavit  form,  of  the  facts.  Vide  Matter  of  Loewi, 
75  Misc.  57;  Matter  of  Lawrence,  N.  Y.  Law  Journal, 
February  15,  1913,  o'pinion  quoted  post,  page  701. 

PROPERTY  BELONGING  TO  ANOTHER  FOUND  IN  SAFE 
DEPOSIT  BOX  of  decedent  renders  it  necessary  for  the 
representatives  of  the  estate  of  the  decedent  to  explain 
its  presence  there.  Just  what  proof  may  be  necessary  to 
establish  that  the  articles  in  question  do  not  belong  to  the 
decedent  depends  upon  the  particular  circumstances  of 
each  individual  case.  It  will  not  do  to  make  the  bald 
statement  that  the  articles  in  question  did  not  belong  to 
the  decedent.  The  representative  of  the  estate  must  go 
further  and  establish  on  the  record  the  reason  for  their 
being  in  the  decedent's  safe  deposit  box,  and  should  set 
forth  the  facts  from  which  is  drawn  the  conclusion  that 
the  property  belongs  to  some  one  other  than  the  decedent. 
Matter  of  Lawrence,  supra;  Matter  of  Francis,  N.  Y.  Law 
Journal,  August  12,  1913,  supra,  page  749. 

As  to  disputed  claims  to  property  vide  cases  cited  sub 
Compromise  of  Claim  and  Ownership  of  Property. 

DEBT  FORGIVEN  BY  WILL  should  be  set  forth  in  this 
Schedule  A3  as  an  asset  of  the  estate.  Matter  of  Wood, 
40  Misc.  155.  It  has  been  held  that  if  the  debtor  of  the 
decedent  is  insolvent  that  then  the  worthless  debt  does 
not  become  an  asset  of  the  estate  by  reason  of  its  being 


112  THE    SCHEDULES   OF   ASSETS 

forgiven.  Morgan  v.  Warner,  45  App.  Div.  424^427, 
affirmed,  on  opinion  below,  162  N.  Y.  612;  Matter  of 
Manning,  169  N.  Y.  449.  If  the  claim  is  made  that  the 
debtor  is  insolvent  then  it  is  incumbent  upon  the  estate  to 
establish  the  worthlessness  of  the  debt  by  competent, 
legal  evidence.  Morgan  v.  Warner,  post,  page  238. 

(4)  Schedule  A4 — Corporate  stock  and  bonds. 

In  this  schedule  should  be  set  forth  all  corporate  bonds, 
stocks  and  securities.  This  includes  joint  stock  associa- 
tions. Matter  of  Jones,  172  N.  Y.  575.  It  will  be  noted 
that  Matter  of  Wilmer,  153  App.  Div.  804,  affirming  75 
Misc.  62,  has  to  do  with  an  estate  of  a  non-resident. 

The  transfer  of  stock  in  foreign  corporation  is  subject 
to  the  tax.  Matter  of  Merriam,  141  N.  Y.  479-485,  sus- 
tained in  163  U.  S.  625,  sub  nom.  United  States  v.  Perkins. 

THE  ACCRUED  INTEREST  ON  THE  BONDS  to  the  date  of 
decedent's  death  should  be  separately  stated.  Be  careful 
to  give  the  denomination  of  the  bond,  and  if  the  corpora- 
tion has  issued  more  than  one  kind  of  bond,  identify  the 
kind  of  bond  owned  by  the  decedent. 

Sometimes  an  examination  of  the  will  of  the  decedent 
indicates  that  there  is  mention  of  securities  which  are  not 
included  in  this  Schedule  A4.  An  explanation  should  be 
given  as  to  why  the  securities  do  not  appear  among  the 
assets  of  the  estate.  Vide  discussion  of  subject,  supra, 
page  110. 

In  the  case  of  listed  securities  which  are  actively  dealt 
in  the  market  value  should  be  set  forth.  The  practice  in 
New  York  county  is  to  take  as  the  market  value  the  lowest 
sale  price  on  the  day  of  death.  If  there  was  no  sale  on 
the  day  of  decedent's  death  then  the  price  of  the  lowest 
sale  on  the  day  nearest  to  the  death  of  decedent  provided 
such  sale  is  not  more  than  a  few  days  either  after  or  before 
decedent's  death. 

In  the  immense  volume  of  business  transacted  in  NEW 
YORK  COUNTY,  where  millions  of  dollars  of  securities  are 
appraised  every  month  of  the  year,  the  administration 
necessities  of  the  office  have  led  to  the  adoption  of  this 


SCHEDULE  A4 — CORPORATE  STOCKS  AND  BONDS  113 

practice.  In  New  York  county  it  must  be  remembered 
that  there  are,  under  §  229,  an  EXAMINER  OF  VALUES  and 
an  assistant  examiner  of  values.  When  the  schedules  of 
assets  are  filed  in  the  appraisers '  office  in  New  York  county 
the  examiner  of  values  goes  over  the  securities  for  the 
purpose  of  seeing  whether  the  market  values  as  given  are 
correct  in  accordance  with  his  judgment.  If  correct,  in 
his  opinion,  he  checks  the  value.  If  the  value  is  not 
correct  he  indicates  on  the  office  copy  of  the  schedules  the 
valuation  which  in  his  opinion  is  the  correct  market  value. 
These  values  so  given  by  the  examiner  of  values  are 
usually  accepted  by  the  appraiser  unless  question  is 
raised  by  the  attorney  for  the  estate  or  by  the  attorney 
for  the  state  comptroller. 

At  the  first  hearing  before  the  appraiser  the  valuations 
as  passed  upon  by  the  examiner  of  values  are  exhibited  to 
the  attorneys  so  as  to  give  them  an  opportunity  to  lodge 
any  objections  which  they  may  have.  If  there  are  objec- 
tions, then  the  examiner  of  values  is  placed  on  the  witness 
stand  and  an  opportunity  is  given  to  examine  him  as  to 
the  facts  upon  which  he  based  his  conclusions  relative 
to  the  values. 

This  practice  of  taking  the  value  at  the  lowest  sale  price 
on  the  day  of  death  has  the  sanction  of  usage.  However, 
it  would  seem  that  §  122  OF  THE  DECEDENT  ESTATE  LAW, 
formerly  §  1,  chapter  34,  of  the  Laws  of  1891,  is  the 
statutory  provision  which  covers  the  cases  of  securities 
customarily  bought  or  sold  in  open  market.  This  pro- 
vision reads  as  follows: 

"Whenever  by  reason  of  the  provisions  of  any  law  of 
this  state  it  shall  become  necessary  to  appraise  in  whole 
or  in  part  the  estate  of  any  deceased  person,  the  persons 
whose  duty  it  shall  be  to  make  such  appraisal  shall  value 
the  real  estate  at  its  full  and  true  value,  taking  into  con- 
sideration actual  sales  of  neighboring  real  estate  similarly 
situated  during  the  year  immediately  preceding  the  date 
of  such  appraisal,  if  any;  and  they  shall  value  all  such 
property,  stocks,  bonds,  or  securities  as  are  customarily 
bought  or  sold  in  open  markets  in  the  city  of  New  York  or 


114  THE    SCHEDULES   OF   ASSETS 

elsewhere,  for  the  day  on  which  such  appraisal  or  report 
may  be  required,  by  ascertaining  the  range  of  the  market 
and  the  average  of  prices  as  thus  found,  running  through  a 
reasonable  period  of  time."  (Renumbered  by  L.  1909, 
ch.  240,  §  17.  Formerly  §  120.) 

It  was  held  in  Matter  of  Curtice,  111  App.  Div.  230-233, 
affirmed,  without  opinion,  185  N.  Y.  543,  that  said  pro- 
vision of  the  statute  was  not  applicable  to  the  appraisal 
of  an  inactive  stock  of  which  there  were  infrequent  sales. 
Vide  cases  cited  sub  Closely  Held  Stock. 

In  Matter  of  Crary,  31  Misc.  72-73  (1900),  the  ap- 
praiser arrived  at  the  value  of  the  stocks  in  question  by 
taking  the  average  sales  of  the  same  for  the  three  months 
next  prior  to  decedent's  death.  Surrogate  Arms  of 
Broome  county  in  upholding  the  appraiser  quoted  the 
statute  just  referred  to  and  said:  "The  statute  which 
furnished  the  rule  for  the  appraiser  required  him  to  find  the 
'  range  of  the  market  *  *  *  running  through  a  reason- 
able period  of  tune.'  In  the  same  statute  the  Legislature 
fixed  what  it  evidently  considered  a  reasonable  period  of 
time  hi  regard  to  appraisals  of  real  estate  by  requiring 
the  appraiser  to  consider  '  actual  sales  of  neighboring  real 
estate  similarly  situated  during  the  year  immediately 
preceding,'  and  in  my  judgment  a  range  of  three  months 
for  stocks  and  securities  sold  in  the  open  market  would  be 
a  fair  and  reasonable  period  as  compared  with  one  year 
on  real  estate. 

"  There  can  be  no  fixed  and  inflexible  rule  applicable 
to  all  cases,  and  an  examination  of  the  cases  upon  this 
question  both  prior  to  and  since  the  enactment  of  the 
statute-  quoted  shows  that  the  courts  have  uniformly 
approved  what  seemed  to  be  a  reasonable  application  of 
the  law  to  the  particular  case  in  question,  although  con- 
siderable variation  would  occur  in  different  cases  in  regard 
to  the  period  of  time  considered,  hence  it  would  seem  that 
the  determination  of  the  appraiser  upon  that  branch  of 
the  case  ought  not  to  be  disturbed." 

THE  RULE  IN  THE  KENNEDY  CASE.  Surrogate  Cohalan 
in  remitting  the  report  of  the  appraiser  in  Matter  of 


John  S.  Kennedy,  N.  Y.  Law  Journal,  March  8,  1911, 
said:  "The  appraiser  erred  in  calculating  the  value  of 
certain  comparatively  inactive  securities  at  the  price  bid 
for  them  on  the  day  after  the  date  of  decedent's  death. 
He  should  have  ascertained  the  average  prices  at  which 
the  securities  were  sold  within  a  reasonable  tune  before 
and  after  decedent's  death  and  made  his  calculations  upon 
that  basis.  He  should  have  ascertained  the  value  of  the 
active  securities  in  the  manner  prescribed  by  §  1,  chap- 
ter 34  of  the  Laws  of  1891  (now  §  122  of  Decedent  Estate 
Law),  and  the  average  price  of  these  securities  for  a  period 
of  two  months  before  and  two  months  after  decedent's 
death  would  represent  the  fair  market  value  of  these 
securities  at  the  date  of  decedent's  death  (Matter  of 
Crary,  31  Misc.  72).  The  number  of  shares  of  stock  held 
by  decedent  should  not  be  taken  into  consideration  in 
ascertaining  their  value  (Matter  of  Gould,  19  App.  Div. 
352)."  Vide  Matter  of  Chambers,  post,  page  627. 

LAEGE  BLOCKS  OF  STOCK.  In  Matter  of  Chappell,  151 
App.  Div.  774-775,  the  court  say:  "The  amount  of  the 
stock,  the  market  for  it  and  whether  a  large  block  could 
be  sold  are  elements  to  be  considered  in  fixing  its  value." 
Vide  etiam  Matter  of  Proctor,  41  Misc.  79.  For  contrary 
doctrine  regarding  large  blocks  of  stock  vide  Matter  of  Jay 
Gould,  19  App.  Div.  352-360,  affirmed  on  this  point  in 
156  N.  Y.  423;  Matter  of  Kennedy,  supra. 

In  New  York  county  when  a  question  is  raised  as  to 
the  valuation  of  a  stock  customarily  bought  and  sold 
upon  the  market  the  rule  in  the  Kennedy  case,  supra, 
is  applied  by  taking  the  average  price  of  the  securities 
for  a  period  of  two  months  before  and  two  months  after 
decedent's  death.  In  this  connection  it  should  be  re- 
membered that  the  Court  of  Appeals  has  held  in  Matter  of 
Thayer,  193  N.  Y.  430-433,  that  the  valuation  of  stock  is 
a  question  of  fact. 

In  listing  the  stock,  state  the  name  of  the  corporation, 
and  if  the  corporation  issues  different  kinds  of  stock  in- 
dicate which  kind  was  held  by  the  decedent,  state  the  par 
value  and  what  you  claim  to  be  the  market  value. 


116  THE    SCHEDULES   OF   ASSETS 

All  stock  owned  by  the  decedent,  no  matter  whether 
of  a  foreign  or  domestic  corporation  is  subject  to  the  tax. 
Subdivisions  1  and  4,  §  220  and  §  243 ;  Matter  of  Merriam, 
141  N.  Y.  479-495.  This  is  so  even  though  the  corporation 
holds  all  of  its  property  outside  the  state  of  New  York. 
Matter  of  Palmer,  183  N.  Y.  238.  The  cases  of  Matter  of 
Cooley,  186  N.  Y.  220,  and  Matter  of  Thayer,  193  N.  Y. 
430,  both  deal  with  an  estate  of  a  non-resident. 

The  stock  is  taxable  even  though  it  stands  in  the  name 
of  another  provided  it  in  reality  belongs  to  the  decedent. 
As,  for  instance,  if  stock  was  being  carried  in  the  name 
of  his  brokers.  The  fact  that  it  was  not  in  his  name  does 
not  alter  the  situation.  Matter  of  Newcomb,  71  App.  Div. 
606,  affirmed,  on  opinion  below,  172  N.  Y.  608. 

As  to  SECURITIES  PLEDGED  AS  COLLATERAL,   vide  CaS6S 

cited  sub  Pledged  Securities.  The  practice  is  to  place  the 
list  of  pledged  securities  in  this  Schedule  A4  calling 
attention  to  the  fact  that  the  securities  were  pledged  at 
the  date  of  decedent's  death,  and  that  the  amount  for 
which  they  are  pledged  is  set  forth  under  Schedule  B3 
containing  the  list  of  the  debts  of  decedent. 

An  affirmative  statement  should  be  made  that  the 
securities  so  given  are  the  same  securities  for  which  the 
debt  is  set  forth  under  B 3.  Suppose  that  there  are  listed 
in  A4  one  hundred  shares  of  the  stock  of  the  New  York 
Central  &  Hudson  River  Railroad  Company  without  any 
further  comment,  and  that  in  B 3  there  appears  an  item 
of  five  thousand  dollars  indebtedness  to  a  broker's  firm,  the 
collateral  being  one  hundred  shares  of  the  New  York 
Central  &  Hudson  River  Railroad  Company  stock. 
There  is  nothing  but  an  inference  to  connect  these  two 
items.  It  might  be  that  the  decedent  owned  two  hundred 
shares  of  stock  in  this  corporation,  one  hundred  shares  of 
which  he  listed  under  A4  and  the  other  hundred  shares  he 
had  come  to  the  conclusion  should  not  be  listed  under 
A4  because  they  were  collateral  for  the  debt  mentioned 
inB3. 

If  the  stock  is  owned  jointly  with  another,  set  it  forth  in 
Schedule  E,  not  in  Schedule  A4, 


SCHEDULE  A5 — INTEREST  OF  DECEDENT,  ETC.    117 

REAL  ESTATE  CORPORATION.  The  method  employed  in 
arriving  at  the  value  of  stock  in  a  real  estate  corporation 
whose  stock  has  no  market  value  in  the  ordinary  accepta- 
tion of  the  word,  is  to  require  each  separate  piece  of  real 
estate  owned  by  the  corporation  to  be  appraised  by  a 
competent  real  estate  expert.  The  valuation  of  the  real 
estate  of  the  corporation  must  be  made  with  the  same 
particularity  as  the  valuation  of  real  estate  of  decedent. 
Vide  discussion  sub  Schedule  A1. 

The  subject  of  UNLISTED  SECURITIES  is  treated  sub 
Closely  Held  Stock. 

(5)  Schedule  A5 — Interest  of  decedent  in  any  co- 
partnership or  business 

In  this  schedule  should  be  set  forth  the  interest  of 
decedent  at  the  time  of  his  death  in  any  co-partnership 
or  business,  stating  the  nature  and  location  thereof,  the 
total  capital  employed,  the  gross  profits,  expenses  and  net 
profits  of  the  business  for  at  least  three  years  prior  to  de- 
cedent's death,  and  any  other  facts  pertaining  to  such 
business  as  may  be  pertinent  to  a  fair  and  just  appraisal  of 
decedent's  interest  in  said  business  and  the  good-will 
thereof. 

If  the  decedent  was  not  interested  in  any  co-partnership 
or  business,  make  an  affirmative  statement  to  that  effect 
and  state  what  the  occupation  of  decedent  was  at  the 
time  of  death. 

It  is  the  practice  to  ask  that  there  shall  be  submitted 
to  the  appraiser  a  CERTIFICATE  OF  A  COMPETENT  ACCOUNT- 
ANT showing  the  amount  of  the  decedent's  interest  in  the 
said  business  and  the  good-will  thereof.  The  subject 
of  good-will  is  treated  sub  Good  Will. 

In  Matter  of  Friedlander,  N.  Y.  Law  Journal,  March  8, 
1911,  Surrogate  Cohalan  remitted  the  report  to  the 
appraiser,  saying:  "The  appraiser's  report  contains  no 
competent  evidence  as  to  the  value  of  the  merchandise 
owned  by  the  decedent  at  the  date  of  his  death.  This 
should  be  shown  by  an  affidavit  of  the  person  who  made 
the  inventory  of  the  merchandise  immediately  after 


118  THE    SCHEDULES   OF   ASSETS 

decedent's  death,  and  such  an  affidavit  should  contain  a 
detailed  statement  showing  what  the  merchandise  con- 
sisted of  and  its  market  value  at  that  time. 

"  The  value  of  the  accounts  receivable  should  be  deter- 
mined from  the  business  books  of  the  decedent,  supple- 
mented with  the  evidence  of  the  individual  who  had  charge 
of  the  collection  of  these  accounts.  As  it  appears  from  the 
testimony  before  the  appraiser  that  the  decedent's  books 
are  in  the  possession  of  the  attorney  for  the  executor, 
there  is  no  reason  why  they  should  not  be  taken  before 
the  appraiser  or  submitted  to  an  accountant  appointed 
by  him  for  the  purpose  of  ascertaining  the  value  of  dece- 
dent's business." 

The  importance  of  making  the  record  full  and  complete 
as  to  the  assets  and  liabilities  going  to  make  up  the  value 
of  interests  of  decedent  in  any  co-partnership  or  business 
cannot  be  emphasized  too  strongly.  If  the  appraiser  does 
not  have  before  him  a  sufficient  record  it  is  apparent  that 
the  surrogate  cannot  pass  upon  the  matter  when  the  report 
of  the  appraiser  comes  before  him  under  §  231. 

In  Matter  of  Achelis,  N.  Y.  Law  Journal,  March  9, 1912, 
in  remitting  the  report  to  the  appraiser,  Surrogate  Fowler 
said:  "The  affidavits  submitted  as  to  the  value  of  dece- 
dent's interest  in  the  partnership  business  of  Frederick 
Victor  &  Achelis  are  insufficient,  as  they  do  not  allege 
that  the  items  therein  mentioned  are  taken  from  the  books 
of  the  company,  or  that  the  statement  is  a  correct  tran- 
script of  the  books  of  the  company  showing  the  value  of 
decedent's  interest  in  the  partnership." 

It  is  the  better  practice  to  furnish  at  the  outset  state- 
ments of  expert  accountants,  and  if  these  are  not  sufficient 
to  enable  the  appraiser  to  form  a  judgment  as  to  the  value 
of  the  interest  of  the  decedent  in  the  business,  then  hear- 
ings will  be  had  at  which  testimony  will  be  taken. 

It  is  not  sufficient  to  state  what  the  interest  amounts  to. 
The  detailed  figures  should  be  given.  The  appraiser's 
report  was  remitted  to  him  in  Matter  of  Moses  Kahn, 
N.  Y.  Law  Journal,  March  16,  1912,  Surrogate  Cohalan 
saying:  "It  is  alleged  in  the  affidavit  of  Louis  Kahn  that 


SCHEDULE  A5 — INTEREST  OF  DECEDENT,  ETC.    119 

the  sum  of  $674,679.95  represents  the  total  amount  of 
notes  received  by  the  executors  of  the  estate  for  decedent's 
interest  in  the  firm  of  L.  &  M.  Kahn  &  Company,  but 
there  is  no  evidence  as  to  the  value  of  this  interest.  The 
appraiser  should  have  taken  the  testimony  of  some 
competent  witness  who  examined  the  books  of  the  com- 
pany and  could  testify  as  to  the  actual  value  of  decedent's 
interest  in  the  firm." 

Sometimes  attorneys  refuse  to  give  the  information 
in  this  form  and  insist  that  the  value  of  the  interest  be 
developed  entirely  by  testimony  taken  at  the  hearings. 
While  attorneys  may  be  within  their  right  in  demanding 
such  a  procedure  it  usually  is  not  the  most  expeditious 
method.  It  sometimes  resolves  itself  into  a  long  con- 
troversy involving  figures  which  might  have  been  avoided 
if  a  proper  statement  had  been  filed  in  the  first  instance. 

ASSETS  OF  A  CO-PARTNERSHIP  NOT  WITHIN  STATE.  This 
question  has  not  been  passed  upon  in  any  reported  de- 
cision. A  ruling  was  made  by  the  state  comptroller  in 
Matter  of  Dusenberry,  Cattaraugus  County,  under  date 
of  May  13,  1913  (2  State  Department  Reports,  501).  The 
opinion  is  as  follows: 

"  Replying  to  your  favor  of  the  fifth  inst.  relative  to 
the  appraisal  of  the  above  estate  for  transfer  tax  purposes, 
I  note  your  statement  that  this  decedent  at  the  time  of 
his  death  was  interested  in  a  copartnership  under  the  firm 
name  of  Wheeler  &  Dusenberry;  that  the  business  was 
carried  on  at  Endeavor,  Forrest  county,  Penn.,  and  con- 
sisted of  real  property,  standing  timber,  cut  timber  and  a 
mill  site,  used  in  carrying  on  a  lumber  business,  and  that 
the  executors  of  the  estate  claim  that  the  decedent's 
interest  in  this  business  is  not  taxable,  for  the  reason  that 
it  is  tangible  property  without  the  state  of  New  York. 

"  It  is  true  that  chapter  732  of  the  Laws  of  1911  defines 
the  terms  'tangible'  and  'intangible'  as  applied  to  the 
property  of  a  decedent,  for  transfer  tax  purposes. 

*'  Subdivision  1  of  §  220  of  the  Tax  Law  as  amended  by 
chapter  732  of  the  Laws  of  1911,  reads  as  follows: 

"  1.  When  the  transfer  is  by  will  or  by  the  intestate  laws 


120  THE    SCHEDULES   OF   ASSETS 

of  this  state  of  any  intangible  property,  or  of  tangible  prop- 
erty within  the  state,  from  any  person  dying  seized  or 
possessed  thereof  while  a  resident  of  the  state. 

"It  is  apparent  from  this  provision  that  tangible  prop- 
erty, whether  real  or  personal,  when  owned  by  a  resident 
of  'this  state  must  be  within  this  state  at  the  time  of  the 
owner's  death  in  order  to  be  liable  to  taxation  when  trans- 
ferred by  will  or  intestacy. 

"  Tangibk  property  is  defined  by  §  243  of  the  Tax  Law 
as  follows: 

"The  words  'tangible  property'  as  used  in  this  article 
shall  be  taken  to  mean  corporeal  property  such  as  real 
estate  and  goods,  wares  and  merchandise,  and  shall  not 
be  taken  to  mean  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits  or  evidences  of  an  interest  in  property 
and  evidences  of  debt. 

"  If  this  decedent's  interest  in  the  copartnership  in  the 
State  of  Pennsylvania  is  'real  estate'  or  'goods,  wares  and 
merchandise,'  then  undoubtedly  the  executors'  contention 
that  no  transfer  tax  can  be  assessed  thereon  is  correct. 
If,  however,  the  decedent's  interest  in  the  co-partnership 
is  not  'tangible  property'  as  defined  above,  but  is  'in- 
tangible' property,  then  it  is  clearly  liable  to  taxation, 
because  subdivision  1  of  §  220  above  quoted,  does  not  re- 
quire 'intangible  property'  of  a  resident  decedent  to  be 
in  this  state  at  the  time  of  his  death  in  order  to  be  liable  to 
taxation  under  article  X  of  the  Tax  Law. 

"  Intangible  property  is  defined  by  §  243  of  the  Tax  Law 
as  follows: 

"  The  words  'intangible  property'  as  used  in  this  article 
shall  be  taken  to  mean  incorporeal  property,  including 
money,  deposits  in  bank,  shares  of  stock,  bonds,  notes, 
credits,  evidences  of  an  interest  in  property  and  evidences 
of  debt. 

"  In  view  of  the  definitions  of  'tangible'  and  'intangible' 
property  as  applied  to  subdivision  1  of  §  220,  the  first 
question  to  be  considered  is  whether  the  decedent's  interest 
in  this  property  is  corporeal  or  incorporeal  property. 

"  The  courts  of  this  state  have  held  that  the  title  to  part- 


SCHEDULE  A6 — PROPERTY  NOT  IN  OTHER  SCHEDULES   121 

nership  property,  upon  the  death  of  one  partner,  vests  in 
the  surviving  partner,  and  all  that  the  executor  of  the 
deceased  partner  has  or  can  claim  is  the  equitable  interest 
in  any  surplus  that  remains  after  the  partnership  affairs 
are  liquidated.  Williams  v.  Whedon,  109  N.  Y.  333; 
Russell  v.  McCall,  141  id.  437-350;  Preston  v.  Fitch,  137 
id.  41-56;  Menagh  v.  Whitehall,  52  id.  146-158;  Secor 
v.  Tradesmen's  National  Bank,  92  App.  Div.  294. 

"  In  view  of  these  decisions  the  executors  of  this 
estate  cannot  point  to  any  'tangible'  property  of  the 
copartnership  in  the  state  of  Pennsylvania  as  belonging 
to  the  decedent.  The  decedent's  interest  in  this  copartner- 
ship property,  at  most,  is  a  mere  chose  in  action,  the  situs 
of  which  follows  the  residence  of  the  deceased  partner, 
and  as  such  is  clearly  intangible  property. 

"  The  department  is  therefore  of  the  opinion  that  you 
should  insist  upon  the  decedent's  interest  in  this  copartner- 
ship property  being  appraised  as  a  part  of  his  estate,  the 
transfer  of  which  is  liable  to  taxation  under  the  will  of 
said  decedent." 

Vide  Matter  of  Straus,  N.  Y.  Law  Journal,  October  9, 
1911,  opinion  quoted  post,  page  752. 

(6)  Schedule  A6 — Property  not  included  in  other 
schedules 

In  this  schedule  should  be  set  forth  any  property  left 
by  decedent  of  whatever  kind  and  nature  not  included  in 
the  foregoing  schedules  or  in  Schedule  E.  This  does  not 
mean  property  passing  by  power  of  appointment  for  such 
property  should  be  set  forth  in  Schedule  C. 

It  sometimes  happens  that  the  decedent  is  entitled  to  a 
vested  interest  in  an  estate,  which  vested  interest  is  sub- 
ject to  the  interest  of  a  life  tenant.  The  transfer  of  the 
vested  interest  in  such  a  case  is  subject  to  the  tax.  Matter 
of  Otto  Huber,  86  App.  Div.  458-463.  If  an  interest  of 
this  kind  exists,  the  date  of  birth  of  the  life  tenant  should 
be  given  so  that  the  remainder  value  of  decedent's  interest 
may  be  calculated  by  the  superintendent  of  insurance 
under  the  provisions  of  the  third  paragraph  of  §  230. 


122  THE   SCHEDULES   OF   ASSETS 

There  should  be  set  out  an  itemized  statement  of  the 
assets  of  the  estate  in  which  decedent  had  the  remainder 
interest.  These  assets  must  be  given  with  the  same 
particularity  as  though  they  were  the  assets  of  the  estate 
of  the  decedent.  The  reason  for  this  is  plain  because  the 
appraiser  cannot  value  the  remainder  unless  he  has  the 
record  complete  as  to  the  nature  and  character  of  the 
assets  composing  the  estate.  The  result  is  that  sometimes 
there  is  an  appraisal  of  an  estate  within  an  appraisal  of  an 
estate,  and  often  the  appraisal  of  this  remainder  interest 
is  much  more  of  an  undertaking  than  the  appraisal  of  the 
estate  proper  of  the  decedent.  In  the  case  of  such  a  re- 
mainder interest  there  should  be  annexed  to  this  Schedule  A6 
a  copy  of  the  will  or  other  instrument  creating  the  estate. 
As  to  interest  of  a  decedent  in  the  estate  of  another  de- 
cedent, vide  Matter  of  Gans,  N.  Y.  Law  Journal,  April  13, 

1912,  post,  page  862;  Matter  of  Sterry,  id.,  April  30,  1912, 
post,  page  862;  Matter  of  de  Sala,  id.,  July  20,  1912,  post, 
page  860. 

(7)  Schedule  C — Property  passing  by  decedent's  exer- 
cise of  any  power  of  appointment 

Under  this  schedule  should  be  listed  all  property  the 
transfer  of  which  is  taxable  under  the  provisions  of  sub- 
division 6,  of  §  220.  Matter  of  Vanderbilt,  50  App.  Div. 
246,  affirmed,  on  opinion  below,  163  N.  Y.  597;  Matter  of 
Delano,  176  N.  Y.  486,  sustained  in  205  U.  S.  466;  Matter 
of  Cooksey,  182  N.  Y.  92;  Matter  of  Stuart,  N.  Y.  Law 
Journal,  May  10,  1913,  opinion  quoted  post,  page  772. 
As  to  attempted  exercise  of  power  of  appointment  vide 
Matter  of  Lansing,  182  N.  Y.  238;  Matter  of  Ripley, 
192  N.  Y.  536;  People  ex  rel.  Ripley  v.  Williams,  69  Misc. 
402;  Matter  of  Spencer,  119  App.  Div.  883,  affirmed,  193 
N.  Y.  613;  Matter  of  Haight,  152  App.  Div.  228. 

As  to  right  of  election  to  take  under  original  will  vide 
Matter  of  Warren,  62  Misc.  444-448;  Matter  of  Chap- 
man, 133  App.  Div.  337-340,  affirmed,  199  N.  Y.  562; 
Matter  of  Mitchill,  N.  Y.  Law  Journal,  November  22, 

1913,  opinion  quoted,  post,  page  777. 


SCHEDULE  E — PROPERTY  HELD  IN  TRUST     123 

There  should  be  set  out  all  the  assets  in  the  same 
manner  as  required  when  decedent  has  interest  in  another 
estate,  vide  supra,  page  121. 

(8)  Schedule  E — Property  held  in  trust  for  or  jointly 
with  others 

It  is  the  practice  in  some  counties  to  set  forth  such 
assets  under  Schedule  A3,  but  it  tends  to  clearness  to 
include  them  in  a  separate  schedule. 

Even  at  the  danger  of  reiterating  there  should  be 
emphasized  the  necessity  of  giving  the  full  facts  from 
which  the  appraiser  can  reach  his  conclusion.  An  examina- 
tion of  the  decisions  will  aid  the  practitioner  in  determining 
how  to  present  the  facts  of  the  particular  case  in  hand. 
They  have  been  collated  post,  page  787. 


PROCEDURE 

THE  SCHEDULES  OF  DEDUCTIONS 


(1)  Schedule    B  »— Funeral    ex- 

penses. 
Tombstone. 
Cemetery  plot. 

(2)  Schedule  B 2 — Administration 

expenses. 

Estimated  expenses. 

Counsel  fees. 

Litigation. 

Commissions  of  executor 
or  administrator. 

Full  commissions. 

Devises  and  bequests  in 
lieu  of  commissions. 

When  commissions  not  al- 
lowed. 

Temporary  administrator's 
commissions. 

Trustee's  commissions. 

Broker's  commissions. 


Inheritance  tax  imposed  by 
foreign  state. 

(3)  Schedule  B  3— Debts  of  de- 

cedent. 

Debts  which  are  allowable. 

Doubtful  claims. 

Promissory  notes. 

Claims  barred  by  the  stat- 
ute of  limitations. 

Unexpired  lease. 

Claim  of  executor  or  ad- 
ministrator. 

Debts  due  to  members  of 
decedent's  family. 

Personal  taxes. 

(4)  Schedule        B4 — Deductions 

claimed  and  not  included 
in  the  preceding  sub-sched- 
ules. 


(1)  Schedule  B  3 — Funeral  expenses 

Under  this  schedule  should  be  inserted  all  the  funeral 
expenses. 

Surrogate  Church  in  Matter  of  Liss,  39  Misc.  123-124, 
very  clearly  expresses  the  rule  for  the  allowance  of  such 
expenses.  The  surrogate  said:  "If  the  funeral  expenses 
are  manifestly  improper,  so  that  on  an  accounting  of  an 
executor  or  administrator,  the  executor  or  administrator 
would  not  be  permitted  to  charge  for  the  same,  the  mere 
fact  that  the  executor  has  expended  that  amount  is  not 
sufficient  to  justify  this  deduction,  but,  if  it  is  a  reason- 
able expense,  then  it  should  be  deducted." 

There  should  be  set  forth  under  this  schedule  the  under- 
taker's bill,  the  expense  of  advertising  death  notice,  and 
the  expense  of  the  funeral  service. 

COST  OF  TOMBSTONE  will  be  allowed  as  a  deduction. 
124 


SCHEDULE    B  5 — ADMINISTKATION    EXPENSES          125 

Matter  of  Edgerton,  35  App.  Div.  125,  affirmed,  without 
opinion,  158  N.  Y.  671;  Matter  of  Maverick,  135  App. 
Div.  44,  affirmed,  without  opinion,  198  N.  Y.  618;  Code 
of  Civ.  Pro.,  §  2749. 

It  is  the  practice  to  require  an  affirmative  statement 
that  the  tombstone  has  been  contracted  for  or  actually 
paid  for.  In  some  religious  sects  it  is  the  custom  not  to 
erect  a  tombstone  for  a  year  after  decedent's  death.  In 
such  a  case  the  schedule  should  contain  a  statement  show- 
ing how  the '  representatives  of  the  estate  have  arrived 
at  the  amount  demanded  as  a  deduction. 

CEMETERY  LOT  purchased  for  the  interment  of  the 
decedent  is  a  proper  deduction.  A  bequest  for  care  of 
burial  plot  is  exempt.  Matter  of  Maverick,  supra. 

(2)  Schedule  B  2 — Administration  expenses 

Under  this  head  should  be  set  forth  the  expenses  of 
administration  which  include  the  counsel  fees  and  dis- 
bursements necessary  in  the  administration  of  the  estate. 
Matter  of  Westurn,  152  N.  Y.  93-102;  Matter  of  Purdy, 
24  Misc.  301. 

"EVERY  JUST  AND  PROPER  DISBURSEMENT  made  by 
an  executor  or  administrator,"  said  Surrogate  Thomas  in 
Matter  of  Thomas,  39  Misc.  223-225,  "as  a  necessary 
or  proper  expense  of  administration,  to  which  the  executor 
or  administrator  will  be  entitled  to  be  credited  on  his 
accounting  with  his  cestui  que  trust,  must  also  be  credited 
in  appraising  the  values  of  the  interests  transferred  to 
those  cestui  que  trust  for  purposes  of  taxation." 

EXPENSES  MAY  BE  ESTIMATED.  In  Matter  of  Jay  Gould, 
19  App.  Div.  352-359  (affirmed  as  to  this  point  in  156 
N.  Y.  423-428),  the  court  in  allowing  estimated  expenses 
of  administration  said:  "It  has  for  many  years  been  the 
practice  in  the  city  of  New  York  to  arrive  at  the  amount 
of  expenses  of  the  administration  to  be  deducted  in  these 
proceedings  in  this  manner,  and  we  see  no  objection  to 
it.  There  is  no  suggestion  made  that  the  estimate  is 
too  large."  To  same  effect  Matter  of  Granfield,  79  Misc. 
374-376. 


126  THE    SCHEDULES    OF    DEDUCTIONS 

A  reasonable  sum  for  administration  expenses  will  be 
allowed  as  a  matter  of  course.  Do  not  include  therein 
the  commissions  of  executor,  administrator  or  trustee. 
These  items  will  be  calculated  and  allowed  by  appraiser. 
If  the  estimate  is  out  of  proportion  to  the  size  and  nature 
of  the  estate  the  appraiser  will  call  for  the  basis  upon 
which  it  has  been  made. 

COUNSEL  FEES  to  an  equitable  amount  will  be  allowed 
as  a  deduction.  If  the  counsel  fees  claimed  are  larger 
than  usually  charged  for  an  estate  of  the  character  under 
consideration,  an  affidavit  should  be  presented  giving 
the  reason  for  the  charge. 

In  Matter  of  Thomas,  39  Misc.  223-226,  the  appraiser 
refused  to  allow  the  deduction  of  counsel  fees  asked. 
Upon  an  appeal  to  surrogate  the  report  was  remitted  for 
further  hearing,  the  surrogate  saying:  "The  evidence  as 
to  these  matters,  contained  in  the  record,  is  exceedingly 
meagre  and  unsatisfactory." 

EXPENSES  OF  LITIGATION.  Surrogate  Davie  of  Cat- 
taraugus  County  in  Matter  of  Sanford,  66  Misc.  395-399, 
succinctly  sums  up  the  principles  of  the  decisions  in  say- 
ing: "It  may  be  stated,  as  a  general  rule,  that  expenses  of 
litigation  in  conserving  and  preserving  the  corpus  of  the 
estate  are  proper  deductions  before  assessment  of  the  tax; 
but  the  expense  of  litigation  between  distributees  over 
their  respective  interests,  which  does  not  in  any  manner 
affect  the  size  or  the  amount  of  the  estate  originally  pass- 
ing, should  not  be  so  deducted."  Vide  etiam  Matter  of 
Thrall,  30  App.  Div.  271-274,  affirmed  as  to  this  point,  157 
N.  Y.  46;  Matter  of  Gihon,  169  N.  Y.  443-445. 

COMMISSIONS  OF  EXECUTOR  OR  ADMINISTRATOR.  "In 
ascertaining  the  value  of  an  estate  for  the  purpose  of  the 
transfer  tax,"  said  Surrogate  Fowler  in  Matter  of  Stephen 
Van  Rensselaer,  N.  Y.  Law  Journal,  October  11,  1912, 
"the  appraiser  should  deduct  from  the  assets  of  the  es- 
tate the  commissions  which  may  be  allowed  to  an  execu- 
tor or  administrator  (Matter  of  Westurn,  152  N.  Y.  93; 
Matter  of  Gihon,  169  N.  Y.  443) .  While  the  exact  amount 
of  such  commissions  cannot  be  ascertained  until  the  ju- 


SCHEDULE    B5 — ADMINISTRATION    EXPENSES  127 

dicial  settlement  of  the  account,  it  is  usually  necessary, 
in  order  to  avoid  the  penalty  imposed  by  the  Transfer 
Tax  Law,  that  the  tax  should  be  assessed  before  the  final 
accounting,  and  the  appraiser  is  therefore  obliged  to  calcu- 
late the  commissions  of  the  executor  from  the  value  of 
the  estate  appraised  by  him  and  to  deduct  the  amount 
so  ascertained  from  the  assets  of  the  estate.  This  practice 
was  approved  by  the  Court  of  Appeals  in  the  Matter  of 
West  urn  (supra)." 

It  is  not  necessary  to  calculate  and  set  forth  the  amount 
of  the  commissions,  as  the  computation  will  be  made  by 
the  appraiser  and  allowed. 

FULL  COMMISSIONS  TO  EACH  OF  THREE  EXECUTORS, 
under  §  2730  of  Code  of  Civil  Procedure,  allowed  as  a 
deduction  by  Surrogate  Ketcham  in  Matter  of  Van  Pelt, 
63  Misc.  616,  where  the  estate  at  the  tune  of  death  of 
testator  was  of  the  value  of  $98,621.33,  but  when  the 
executors  received  their  letters  it  had  been  increased  by 
accrual  of  interest  to  more  than  $100,000.  "No  doubt, 
for  the  purpose  of  the  transfer  tax,  the  estate  must  be 
valued  as  of  the  tune  of  death;  but  whether  each  executor 
shall  receive  a  full  commission  is  to  be  determined  by  the 
value  of  the  estate  which  they  shall  have  administered." 

COMMISSIONS  ALLOWED  ON  REAL  PROPERTY  where  will 
provides  for  sale  of  real  estate.  Matter  of  Saunders,  77 
Misc.  54-67,  affirmed,  without  opinion,  156  App.  Div.  891. 

DEVISES  AND  BEQUESTS  IN  LIEU  OF  COMMISSIONS.     "The 

excess  hi  value 'of  the  property  so  bequeathed  or  devised 
above  the  amount  of  commissions  or  allowances  prescribed 
by  law  in  similar  cases  shall  be  taxable  under  this  article." 
Section  226. 

Commissions  allowed  by  law  were  given  to  an  executor 
and  trustee,  and  in  addition  an  annuity  of  $1,500  for 
his  services  "legal  or  otherwise,"  as  long  as  he  continued 
to  act  as  executor  and  trustee.  Held,  that  the  annuity 
was  subject  to  tax.  Matter  of  Huber,  86  App.  Div.  458- 
459. 

EXECUTOR'S  COMMISSIONS  NOT  DEDUCTED  when  will  pro- 
vides that  they  shall  act  without  compensation.  Sur- 


128  THE    SCHEDULES   OF   DEDUCTIONS 

rogate  Cohalan  in  Matter  of  Neustadter,  N.  Y.  Law 
Journal,  August  16,  1913,  said:  " Ordinarily  the  com- 
missions of  executors  and  trustees  are  properly  deducted 
from  the  assets  of  an  estate,  but  the  testatrix  in  paragraph 
thirtieth  of  her  will  provided  that  'my  executors  and 
trustees  herein  named  shall  not  charge  or  receive  any 
compensation  or  commissions  in  connection  with  the 
discharge  of  their  duties  as  such.' 

"  The  executors  could  have  refused  to  qualify,  and  it 
would  then  be  incumbent  upon  the  court  to  appoint  an 
administrator  c.  t.  a.  who  would  be  entitled  to  the  com- 
missions prescribed  by  statute;  but  as  the  executors 
named  in  the  will  have  qualified,  and  as  their  right  to 
the  office  of  executors  is  derived  from  the  provisions  of 
the  will,  which  also  provides  that  as  such  executors  and 
trustees  they  shall  not  be  entitled  to  compensation,  their 
acceptance  of  the  position  of  executor  and  trustee  acts 
as  a  waiver  of  their  right  to  the  commissions  prescribed 
by  statute."  To  same  effect  Matter  of  Cornelius  Vander- 
bilt,  68  App.  Div.  27-30,  modified  as  to  other  points,  172 
N.  Y.  69. 

COMMISSIONERS  NOT  ALLOWED  ON  SPECIFIC  BEQUESTS. 
In  Matter  of  John  A.  Singer,  N.  Y.  Law  Journal,  Novem- 
ber 22,  1912,  Surrogate  Cohalan  said:  "If  the  securities 
constituting  the  assets  of  the  estate  are  specifically  be- 
queathed the  executors  would  not  be  entitled  to  commis- 
sions upon  such  bequests  (Matter  of  Robinson,  37  Misc. 
336;  Matter  of  Kings  County  Trust  Co.,  69  Misc.  531); 
but  if  the  securities,  although  not  specifically  bequeathed, 
were  accepted  by  the  legatees  hi  satisfaction  of  theif 
legacies,  the  executors  would  be  entitled  to  full  commis- 
sions (Matter  of  Curtiss,  9  App.  Div.  285)." 

TEMPORARY  ADMINISTRATOR'S  commissions  are  allowed. 
Matter  of  Gihon,  169  N.  Y.  443-445;  Matter  of  Hurst, 
111  App.  Div.  460. 

TRUSTEES'  COMMISSIONS  are  proper  deductions.  Matter 
of  Silliman,  79  App.  Div.  98,  affirmed,  without  opinion, 
175  N.  Y.  513;  Matter  of  Shields,  68  Misc.  264-267. 

BROKERS'  COMMISSIONS  for  sale  of  real  estate  are  held 


SCHEDULE  B3 — DEBTS  OF  DECEDENT        129 

to  be  proper  deductions  if  the  sale  of  the  real  estate  was 
necessary  for  the  administration  of  the  estate  and  the 
commissions  have  been  paid.  If  sale  has  not  taken  place 
and  it  is  established  on  the  record  that  they  are  actually 
to  be  paid,  the  deduction  will  be  allowed.  Matter  of 
Rothschild,  63  Misc.  615;  Matter  of  Shields,  68  id. 
264-267;  Matter  of  Saunders,  77  id.  54-68,  affirmed, 
without  opinion,  156  App.  Div.  891 ;  Matter  of  Dormitzer, 
N.  Y.  Law  Journal,  February  6, 1913. 

INHERITANCE  TAX  IMPOSED  BY  A  FOREIGN  STATE  .upon 
the  succession  to  property  located  in  such  state  will  not 
be  allowed  as  a  deduction.  Matter  of  Kennedy,  20  Misc. 
531;  Matter  of  Penfold,  81  Misc.  598;  Matter  of  Burr, 
16  Misc.  89-91. 

(3)  Schedule  B*— Debts  of  decedent 

This  schedule  should  set  forth  all  the  debts  of  and 
claims  against  the  decedent. 

Recite  which  have  been  paid  or  allowed.  If  any  claims 
have  been  rejected  recount  which  they  are,  and  disclose 
the  status  of  each  rejected  claim. 

PARTNERSHIP  OR  BUSINESS  DEBTS  should  be  set  forth 
in  Schedule  A5,  not  in  Schedule  B3. 

MORTGAGES  belong  hi  Schedule  A1,  not  in  this  schedule. 

"  DEBTS  WHICH  ARE  ALLOWABLE,"  said  Surrogate  Fitz- 
gerald, New  York  County,  in  Matter  of  Alexander  J. 
Wormser,  36  Misc.  434  (1901),  "as  a  deduction  from  the 
taxable  estate  are  only  such  as  could  have  been  enforced 
against  the  estate  if  payment  had  been  resisted.  Matter 
of  Gould,  19  App.  Div.  352.  While  it  has  been  held  in 
other  counties  that  an  appraiser  cannot  hear  evidence  in 
regard  to  the  debts  of  the  deceased,  funeral  expenses  and 
expenses  of  administration,  but  that  deductions  therefor 
must  be  made  by  the  surrogate  (Matter  of  Millward,  6 
Misc.  425;  Matter  of  Ludlow,  4  id.  594),  it  has  always  been 
the  practice  in  this  county  for  the  appraiser  to  receive 
such  evidence  as  might  be  submitted  to  him  to  establish 
claims  for  deduction,  and  his  conclusions  have  been 
adopted  by  the  court,  unless  objection  was  made  thereto 
9 


130  THE    SCHEDULES   OF   DEDUCTIONS 

or  they  were  palpably  improper.  This  method  of  proce- 
dure has  manifest  advantages,  and  I  see  no  reason  for 
changing  it. 

"  In  this  proceeding,  practically  no  evidence  was  intro- 
duced before  the  appraiser  to  sustain  the  very  large  de- 
duction made  for  alleged  debts,  notwithstanding  the  assets 
amounted  to  more  than  eight  hundred  thousand  dollars, 
and  the  allowances  reduced  the  estate  below  the  taxable 
limit.  The  matter  will  be  remitted  to  the  appraiser  to 
receive  such  proof  as  may  be  offered  as  to  the  deductions 
claimed." 

It  is  now  the  general  practice  for  the  appraiser  to  re- 
ceive the  evidence  relative  to  deductions  and  to  include 
them  in  his  report  to  the  surrogate  made  under  the  fourth 
sentence  of  §  230.  The  name  of  the  creditor,  the  amount 
of  the  debt  and  a  brief  description  of  the  nature  of  the 
indebtedness  should  be  given. 

As  a  matter  of  practice  the  appraiser  runs  down  the 
list  of  deductions  asked,  and  if  any  item  appears  to  re- 
quire further  explanation  a  supplemental  affidavit  will 
be  requested.  The  practitioner  will  do  well  to  anticipate 
questions  by  including  in  his  original  papers  an  explana- 
tion of  such  items  as  are  not  the  ordinary  debts  of  a  per- 
son in  the  station  of  life  of  the  decedent. 

If  the  DOCTORS'  BILLS  are  of  any  magnitude,  give  an 
explanation.  As  for  instance,  that  decedent  had  long 
illness;  or  that  decedent  underwent  an  operation. 

Substantial  deductions  are  sometimes  sought  for  nurse's 
bills.  The  natural  inquiry  is,  why  were  such  bills  allowed 
to  run  for  more  than  a  few  weeks  prior  to  decedent's  death. 

In  Matter  of  Friedlander,  N.  Y.  Law  Journal,  March  8, 
1911,  the  surrogate  remitted  the  appraiser's  report  be- 
cause it  did  not  "show  the  various  items  of  indebtedness 
which  he  allows  as  a  deduction  from  the  decedent's 
estate." 

In  Matter  of  Arens,  N.  Y.  Law  Journal,  March  9,  1912, 
the  surrogate  in  remitting  the  report  said:  "The  execu- 
trix of  his  estate  alleges  that  the  decedent  owed  F.  C. 
Kirchhoff  the  sum  of  $34,000,  and  the  appraiser  deducted 


SCHEDULE  B  3—  DEBTS  OF  DECEDENT       131 


this  amount  from  the  assets  of  the  estate.  *  *  * 
collateral  having  been  given  by  the  decedent  to  secure 
payment  for  this  indebtedness,  the  appraiser  should  have 
taken  testimony  as  to  the  circumstances  under  which 
the  indebtedness  was  incurred  by  the  decedent.  The 
appraiser's  report  will  be  remitted  to  him  for  further 
testimony  as  indicated." 

CLAIMS  OF  A  DOUBTFUL  AND  UNCERTAIN  CHARACTER 
should  not  be  allowed  by  the  appraiser.  There  should  be  a 
recital  in  the  appraiser's  report,  and  also  in  the  order 
fixing  tax  that  the  question  of  the  deduction  is  postponed 
until  the  determination  of  the  claim.  Matter  of  Rice, 
56  App.  Div.  253;  Matter  of  Dimon,  82  App.  Div.  107. 

Appraiser  refused  to  allow  deduction  for  alleged  claim, 
the  only  evidence  presented  being  an  affidavit  of  an  at- 
torney that  he  had  advised  claimant  that  he  was  entitled 
to  the  claim.  The  court  held,  "  there  was  no  proper 
evidence  of  the  existence  of  the  claim,  and  nothing  upon 
which  a  deduction  for  it  could  be  allowed."  Matter  of 
Simon  Wormser,  51  App.  Div.  441-445. 

WHERE  ESTATE  HAS  INDEMNITY  for  claim  against  it 
the  indemnity  should  be  taken  into  consideration  by  the 
appraiser  in  determining  whether  deduction  should  be 
made  for  claim.  Matter  of  Skinner,  106  App.  Div. 
217-219. 

PROMISSORY  NOTES.  It  is  the  practice  to  ask  that  copies 
of  promissory  notes  be  annexed  to  the  papers. 

CLAIMS  BARRED  BY  THE  STATUTE  OF  LIMITATIONS  are 
not  allowed  as  deductions.  The  theory  is  that  the 
state  is  an  interested  party,  and  deductions  should 
not  be  allowed  to  reduce  the  taxable  assets  even  though 
the  outlawed  claims  are  paid  by  the  estate.  There  does 
not  seem  to  be  a  reported  decision  on  this  subject  hi  a 
transfer  tax  case.  It  is  the  practice,  however,  for  the 
appraiser  to  disallow  deductions  based  on  claims  barred 
by  the  statute  of  limitations.  For  decisions  on  the  general 
subject  vide  Bloodgood  v.  Bruen,  8  N.  Y.  362;  McLaren 
v.  McMartin,  36  id.  88;  Butler  v.  Johnson,  111  id.  204; 
Schutz  v.  Morette,  146  id.  137;  Holly  v.  Gibbons,  176  id. 


132  THE   SCHEDULES   OF   DEDUCTIONS 

520;  Hamlin  v.  Smith,  72  App.  Div.  601.  Where  "trans- 
action amounted  to  a  trust,"  vide  Matter  of  Frazer,  92 
N.  Y.  239-248. 

UNEXPIRED  LEASE.  The  liability  for  the  unexpired 
term  of  a  lease  made  by  decedent  should  have  offset 
against  it  the  rental  received  or  to  be  received  by  estate 
for  the  use  of  the  premises  since  death  of  decedent.  If 
the  premises  have  not  been  leased  a  statement  should 
be  made  showing  what  effort  had  been  made  to  dispose 
of  the  lease,  and  also  what  use  has  been  made  of  the  prem- 
ises since  decedent's  death. 

STORAGE  BILLS  sometimes  appear  in  Schedule  B3,  but 
the  assets  stored  are  not  reflected  in  Schedule  A3.  The 
practitioner  should  forestall  the  enquiry  which  such  an 
entry  is  sure  to  bring. 

DEBT  OR  CLAIM  OF  EXECUTOR  OR  ADMINISTRATOR  will 
be  given  the  same  close  examination  as  required  upon 
the  proof  of  such  claims  under  the  provisions  of  §  2719 
of  the  Code  of  Civil  Procedure. 

DEBTS  DUE  TO  MEMBERS  OF  DECEDENT'S  FAMILY  are 
scrutinized  by  the  appraiser  with  care,  and  the  particulars 
of  the  transaction  must  be  set  forth. 

REAL  ESTATE  TAXES,  water  rates  or  assessments  should 
be  set  forth  in  Schedule  A1,  not  in  B3. 

PERSONAL  TAXES  assessed  against  decedent  prior  to 
his  death  are  proper  deductions.  Vide  Matter  of  Dormit- 
zer,  N.  Y.  Law  Journal,  February  6,  1913,  and  other  cases 
cited  sub  Taxes.  In  making  claim  for  deduction  of  per- 
sonal taxes  state  the  year  for  which  taxes  were  assessed. 

(4)  Schedule  B4 — Deductions  claimed  and  not  included 

in  the  preceding  sub  schedules. 

The  three  preceding  sub  schedules  of  deductions  are 
designed  to  include  all  deductions  ordinarily  arising  in 
an  estate,  and  this  Schedule  B4  is  intended  for  such  claims, 
if  any,  as  may  not  come  within  the  terms  of  the  preceding 
sub  schedules. 


NON-RESIDENT  ESTATES 


(1)  Only       tangible       property 

within  state. 

(2)  Exercise    of    power    of    ap- 

pointment. 

(3)  Definition  of  tangible  prop- 

erty. 

(4)  1911  amendment. 

(5)  Decisions     prior     to     1911 

amendment. 

(6)  1911  amendment  not  retro- 

active. 

(7)  Even  money  not  subject  to 

tax. 

(8)  Double  taxation. 

(9)  Consent  under  §  227. 

(10)  Form    of    application    for 

consent. 

(11)  When     tangible     property 

within  state. 

(12)  Issuance     of     letters     not 

condition  precedent. 

(13)  Jurisdiction  of  surrogate. 

(14)  Code  provisions. 

(15)  Concurrent  jurisdiction. 

(16)  Petition  for  appointment  of 

appraiser. 


(17)  Order        appointing        ap- 

praiser. 

(18)  Affidavit  for  appraisal. 

(19)  Question  of  residence. 

(20)  Property      transiently      in 

state. 

(21)  Appraisal  by  experts. 

(22)  Debts   due   resident   credi- 

tors. 

(23)  Foreign  debts  and  adminis- 

tration expenses. 

(24)  Pro  rata  deductions. 

(25)  Cannot  compel  disclosure  of 

non-taxable  assets. 

(26)  New  York  taxable  portion 

determines  tax. 

(27)  Graded  rates  of  tax. 

(28)  Cannot  marshall  assets  to 

avoid  tax. 

(29)  Specifically   bequeathed    or 

devised  property. 

(30)  Report      where      property 

specifically  devised. 

(31)  Order  entered  thereon. 


(1)  Only  tangible  property  within  State 

The  only  property  of  a  non-resident  the  transfer  of 
which  is  subject  to  the  tax  is  tangible  property  within  the 
state  at  the  tune  of  the  transfer.  Subdivisions  2  and  4  of 
§220. 

(2)  Exercise  of  power  of  appointment 

As  to  provisions  of  subdivision  6  of  §  220  vide  discussion 
sub  Power  of  Appointment,  post,  page  781. 

(3)  Definition  of  tangible  property 

"The  words  'tangible  property'  as  used  in  this  article 
shall  be  taken  to  mean  corporeal  property  such  as  real 
estate  and  goods,  wares  and  merchandise,  and  shall  not  be 

133 


134  NON-KESIDENT   ESTATES 

taken  to  mean  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits  or  evidences  of  an  interest  in  prop- 
erty and  evidences  of  debt.  The  words  '  intangible  prop- 
erty' as  used  in  this  article  shall  be  taken  to  mean  in- 
corporeal property,  including  money,  deposits  in  bank, 
shares  of  stock,  bonds,  notes,  credits,  evidences  of  an 
interest  in  property  and  evidences  of  debt."  Section  243; 
Matter  of  Dusenberry,  2  State  Department  Reports,  501, 
opinion  quoted  supra,  page  119. 

(4)  1911  amendment 

If  the  transfer  of  the  property  was  made  prior  to  the 
Amendment  by  Laws  of  1911,  chap.  732,  in  effect  July  21, 
1911,  the  statute  in  force  at  the  time  of  the  transfer  should 
be  consulted.  Vide  Prior  Statutes,  post,  page  403. 

The  last  sentence  of  the  present  §  243  was  added  by  the 
1911  amendment;  vide  supra,  page  36,  for  discussion  of 
its  effect  in  non-resident  estate. 

(5)  Decisions  prior  to  1911  amendment 

The  decisions  upon  transfers  made  prior  to  the  1911 
amendment  are  in  many  instances  applicable  to  the  present 
law  except  that  the  transfer  of  property  subject  to  the 
tax  is  now  restricted  to  tangible  property  within  the 
state.  These  decisions  have  been  collated,  post,  page  745. 

(6)  1911  amendment  not  retroactive 

The  1911  amendment  was  not  retroactive.  Matter  of 
Abraham,  151  App.  Div.  441;  Matter  of  Webber,  id.  539; 
Matter  of  Niles,  N.  Y.  Law  Journal,  January  5,  1912; 
Matter  of  Bolton,  157  App.  Div.  935,  appeal  pending. 

Etiam  Matter  of  Miller,  110  N.  Y.  216-223;  Matter  of 
Enston,  113  id.  174-183;  Matter  of  Van  Kleeck,  121  id. 
701-703;  Matter  of  Davis,  149  id.  539-545;  Matter  of 
Sloane,  154  id.  109-113;  Matter  of  Pettit,  65  App.  Div. 
30,  affirmed,  on  opinion  below,  171  N.  Y.  654. 

(7)  Even  money  not  subject  to  tax 

The  1911  amendment  works  a  complete  reversal  of  the 
former  policy  of  the  statute,  and,  as  if  for  good  measure, 


CONSENT   UNDER   §  227  135 

it  will  be  noticed  that  the  legislature  has  defined  (§  243) 
money  as  not  " tangible"  within  the  meaning  and  intend- 
ment  of  §  220,  and  therefore  although  the  money  is  in  the 
state  at  the  time  of  the  transfer,  the  transfer  thereof  is  not 
taxable  in  a  non-resident's  estate. 

(8)  Double  taxation 

A  substantial  step  has  been  taken  in  the  direction  of 
avoiding  double  taxation,  for  there  is  now  done  away  with 
the  former  rule  of  taxing  transfers  in  a  non-resident  estate 
of  deposits  in  New  York  banks  (Matter  of  Blackstone,  171 
N.  Y.  682,  sustained  in  188  U.  S.  189  sub  nom.  Black- 
stone  v.  Miller),  shares  of  stock  in  New  York  corporations 
(Matter  of  Palmer,  183  N.  Y.  238),  bonds  physically 
present  in  this  state  (Matter  of  Morgan,  150  N.  Y.  35), 
and  debts  due  from  New  York  debtors  (Matter  of  Daly, 
100  App.  Div.  373,  affirmed,  without  opinion,  182  N.  Y. 
524;  Matter  of  Page,  N.  Y.  Law  Journal,  April  13,  1912, 
opinion  quoted  sub  Chose  in  Action,  post,  page  610). 

The  1911  amendment  does  not  completely  restore  the 
doctrine  of  mobilia  personam  sequuntur  because  tangible 
personal  property  within  the  state  is  still  subject  to  the 
tax. 

(9)  Consent  under  §  227 

Notwithstanding  the  fact  that  intangible  property  of  a 
non-resident  decedent  is  not  subject  to  the  tax  it  is  some- 
times the  practice  of  New  York  corporations  to  ask  for  a 
consent  from  the  New  York  state  comptroller  under  §  227. 
As  the  transfer  of  intangible  property  of  a  non-resident  is 
not  subject  to  the  tax  it  is  not  necessary  to  obtain  the 
consent.  Dunham  v.  City  Trust  Company,  115  App.  Div. 
584,  affirmed,  without  opinion,  193  N.  Y.  642. 

However,  if  there  is  any  question  as  to  the  transfer  the 
simplest  method  is  to  apply  for  a  consent,  which  will  be 
issued  forthwith  upon  an  application  being  made  either  to 
the  attorney  for  the  state  comptroller  or  to  the  comp- 
troller's office  in  Albany. 

A  consent  under  §  227  is  usually  insisted  upon  for  the 


136  NON-RESIDENT   ESTATES 

reason  that  the  corporation  or  individual  having  in  pos- 
session or  control  the  asset  does  not  care  to  assume  the 
responsibility  of  passing  upon  the  question  of  decedent's 
residence. 

(10)  Form  of  application  for  consent 
The  following  form  is  used  in  some  of  the  counties: 

SURROGATES'  COURT,  NEW  YORK  COUNTY. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of  [  Affidavit  upon  Application 


JOHN  DOE, 
Deceased. 


for  Consent  under  §  227. 


STATE  OF  NEW  JERSEY.    \ 

t  ss  ' 
COUNTY  OF  MONMOUTH,   ) 

Henry  Smith,  being  duly  sworn,  deposes  and  says: 

I.  That  he  resides  at  Locust,  Monmouth  County,  State  of 
New  Jersey. 

II.  That  said  decedent  died  on  the  first  day  of  September, 
1913,  a  resident  of  Locust,  State  of  New  Jersey,  testate,  and 
letters  testamentary  were  issued  on  the  18th  day  of  September, 
1913,  by  the  Surrogate  of  the  County  of  Monmouth,  State  of 
New  Jersey.     A  true  and  complete  copy  of  the  last  will  and 
testament  is  hereto  annexed. 

III.  That  deponent  was  appointed  executor  of  this  estate, 
has  qualified  and  is  now  acting  as  such  executor. 

IV.  That  the  decedent  died  seized  and  possessed  of  no  real 
estate  in  the  State  of  New  York,  and  no  tangible,  corporeal 
personal  property  within  the  State  of  New  York,  and  that  none 
passed  at  decedent's  death  by  virtue  of  power  of  appointment 
exercised  by  decedent.* 

V.  That  the  following  are  the  names,  relationship  and  amount 
of  interest  of  the  persons  among  whom  this  estate  is  distributable : 

Name  and  Relationship  Address            Amount  of  Interest 

Mary  Doe,  widow,  Locust,  New  Jersey,        one-half 

Henry  Doe,  son,  Locust,  New  Jersey,        one-quarter 

Susan  Doe,  daughter,  Locust,  New  Jersey,        one-quarter 

That  this  affidavit  is  made  for  the  purpose  of  securing  the 
waivers  of  the  Comptroller  of  the  State  of  New  York  to  transfer 


JURISDICTION   OF   SURROGATE  137 

the  following  property  owned  by  this  decedent  at  the  date  of 
his  death  or  in  which  this  decedent  had  an  interest: 

One  hundred  (100)  shares  of  stock  of  New  York  Central  Rail- 
road Company. 

Deposit  in  Bank  for  Savings,  book  No.  604,324,  $643.24  and 
interest.  HENRY  SMITH. 

Sworn  to  before  me  this 

25th  day  of  September,  1913. 
PETER  JACKSON 
Notary  Public, 

Monmouth  County. 
Attach  county  clerk's  certificate 

*  If  there  was  transferred  real  estate  in  the  state  of 
New  York,  or  tangible  personal  property  within  the  state, 
then  add  to  this  paragraph  IV  the  words  "except  as  set 
forth  in  Schedule  A  hereto  annexed,"  and  annex  to  the 
affidavit  a  schedule  showing  the  real  estate  and  the  tangible 
personal  property  within  the  state. 

If  there  is  to  be  a  formal  appraisal  it  is  suggested  that 
there  be  used  the  form  set  forth  post,  page  143. 

(11)  When  tangible  property  within  state 

If  there  has  been  a  transfer  of  tangible  property  within 
the  state  coming  under  the  terms  of  §  220  then  an  appraisal 
thereof  should  be  had. 

(12)  Issuance  of  letters  not  condition  precedent 

It  is  not  necessary  that  letters  be  issued  in  this  state  or 
elsewhere  to  give  the  surrogate  jurisdiction  to  impose  the 
tax.  Matter  of  Edgerton,  35  App.  Div.  125,  affirmed, 
without  opinion,  158  N.  Y.  671;  Matter  of  Fitch,  160 
N.  Y.  87;  Matter  of  Pullman,  '46  App.  Div.  574;  Matter  of 
Arnold,  114  App.  Div.  244;  2  State  Department  Reports, 
497-499. 

(13)  Jurisdiction  of  surrogate 

The  question  which  arises  at  the  outset  is  as  to  the 
county  in  which  the  proceedings  shall  be  brought.  This 
is  governed  by  the  first  sentence  of  §  228  which  provides 
that  "the  surrogate's  court  of  every  county  of  the  state 


138  NON-RESIDENT   ESTATES 

having  jurisdiction  to  grant  letters  testamentary  or  of 
administration  upon  the  estate  of  a  decedent  whose  prop- 
erty is  chargeable  with  any  tax  under  this  article,  or  to 
appoint  a  trustee  of  such  estate  or  any  part  thereof,  or  to 
give  ancillary  letters  thereon,  shall  have  jurisdiction  to 
hear  and  determine  all  questions  arising  under  the  provi- 
sions of  this  article,  and  to  do  any  act  in  relation  thereto 
authorized  by  law  to  be  done  by  a  surrogate  in  other  mat- 
ters or  proceedings  coming  within  his  jurisdiction;  and  if 
two  or  more  surrogates'  courts  shall  be  entitled  to  exercise 
any  such  jurisdiction,  the  surrogate  first  acquiring  jurisdic- 
tion hereunder  shall  retain  the  same  to  the  exclusion  of 
every  other  surrogate." 

JURISDICTION  OF  SURROGATE  NOT  LOST  to  appoint 
appraiser  and  to  assess  tax  because  executors  of  non- 
resident estate  have  removed  assets  from  this  state  and 
distributed  them.  Matter  of  Hubbard,  21  Misc.  566. 

(14)  Code  Provisions 

The  Code  of  Civil  Procedure  by  §  2476  provides  that  in 
non-resident  estates  "the  surrogate's  court  of  each  county 
has  jurisdiction,  exclusive  of  every  other  surrogate's 
court"  in  either  of  the  three  following  cases: 

"2.  Where  the  decedent,  not  being  a  resident  of  the 
State,  died  within  that  county,  leaving  personal  property 
within  the  State,  or  leaving  personal  property  which  has, 
since  his  death,  come  into  the  State,  and  remains  unad- 
ministered. 

"3.  Where  the  decedent,  not  being  a  resident  of  the 
State,  died  without  the  State,  leaving  personal  property 
within  that  county,  and  no  other;  or  leaving  personal 
property  which  has,  since  his  death,  come  into  that  county, 
and  no  other,  and  remains  unadministered. 

"4.  Where  the  decedent  was  not,  at  the  time  of  his 
death,  a  resident  of  the  State,  and  a  petition  for  probate  of 
his  will,  or  for  a  grant  of  letters  of  administration,  under 
subdivision  second  or  third  of  this  section,  has  not  been 
filed  in  any  surrogate's  court;  but  real  property  of  the 
decedent,  to  which  the  will  relates,  or  which  is  subject  to 


PETITION   FOR  APPOINTMENT   OF   APPRAISER          139 

disposition  under  title  fifth  of  this  chapter,  is  situated 
within  that  county  and  no  other." 
Matter  of  Lowndes,  60  Misc.  506-507. 

(15)  Concurrent  jurisdiction 

Section  2477  provides:  " Where  personal  property  of 
the  decedent  is  within,  or  comes  into,  two  or  more  coun- 
ties, under  the  circumstances  specified  hi  subdivision 
third  of  the  last  section;  or  real  property  of  the  decedent 
is  situated  hi  two  or  more  counties,  under  the  circum- 
stances specified  hi  subdivision  fourth  of  the  last  section; 
the  surrogate's  courts  of  those  counties  have  concurrent 
jurisdiction,  exclusive  of  every  other  surrogate's  court,  to 
take  the  proof  of  the  will  and  grant  letters  testamentary 
thereupon,  or  to  grant  letters  of  administration,  as  the 
case  requires.  But  where  a  petition  for  probate  of  a  will, 
or  for  letters  of  administration,  has  been  duly  filed  in 
either  of  the  courts  so  possessing  concurrent  jurisdiction, 
the  jurisdiction  of  that  court  excludes  that  of  the  other." 

In  Matter  of  Hathaway,  27  Misc.  474,  Surrogate 
Varnum  vacated  order  appointing  appraiser  hi  New  York 
County,  it  appearing  that  the  surrogate  of  Chemung 
County  had  issued  ancillary  letters.  Matter  of  Arnold, 
114  App.  Div.  244. 

(16)  Petition  for  appointment  of  appraiser 

The  application  for  the  appointment  of  an  appraiser  is 
made  ex  parte  under  the  provisions  of  the  second  sentence 
of  §  230. 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 
In  the  Matter  of  the  Transfer 


Petition  for  Appointment  of 
Appraiser. 


Tax  on  the  Estate  of 
SARAH  AMELIA  HEWITT, 

Deceased. 

To  the  Surrogates'  Court  of  the  County  of  New  York: 
The  petition  of  PETER  COOPER  HEWITT,  ERSKINE  HEWITT 

and  JAMES  O.  GREEN,  respectfully  shows  as  follows: 

First:  Sarah  Amelia  Hewitt,  the  above  named  decedent,  died 

on  the  14th  day  of  August,  1912.    At  the  time  of  her  death  she 


140  NON-RESIDENT   ESTATES 

was,  and  for  many  years  before  then  she  had  been,  a  resident  of 
Ringwood,  Passaic  County,  New  Jersey,  where  she  died. 

Second:  She  left  a  last  Will  and  Testament  which,  on  the 
10th  day  of  October,  1912,  was  duly  admitted  to  probate  by  the 
Surrogate  of  Passaic  County,  New  Jersey,  to  whom  jurisdiction 
in  that  behalf  did  properly  belong,  and  on  the  same  day,  Octo- 
ber 10th,  1912,  letters  testamentary  were  issued  by  the  said  Sur- 
rogate to  your  petitioners,  as  executors  of  the  said  last  Will  and 
Testament;  and  thereupon  your  petitioners  entered  upon  the 
discharge  of  their  duties,  and  are  still  acting,  as  such  ex- 
ecutors. 

Third:  As  your  petitioners  are  informed  and  believe,  some 
portion  of  the  property  of  which  the  said  decedent  was  seized 
and  possessed  at  the  time  of  her  death  is  or  may  be  subject  to 
the  payment  of  the  tax  imposed  by  the  laws  of  the  State  of 
New  York  hi  relation  to  taxable  transfers  of  property. 

Fourth:  All  of  the  persons  who  are  interested  in  the  estate  of 
the  said  Sarah  Amelia  Hewitt,  deceased,  and  entitled  to  notice 
of  proceedings  herein,  together  with  their  respective  places  of 
residence  and  post  office  addresses,  are  as  follows: 

Your  petitioner  Peter  Cooper  Hewitt,  who  is  a  son  of  the  said 
decedent  and  an  executor  of  and  trustee  under  her  said  last  Will 
and  Testament  and  who  resides  at,  and  whose  post  office  address 
is,  Ringwood  Manor,  Passaic  County,  New  Jersey. 

Your  petitioner  Erskine  Hewitt,  who  is  a  son  of  the  said 
decedent  and  an  executor  of  and  trustee  under  her  said  last 
Will  and  Testament  and  who  resides  at,  and  whose  post  office 
address  is,  Ringwood  Manor,  Passaic  County,  New  Jersey. 

Your  petitioner,  James  O.  Green,  who  is  a  son-in-law  of  the 
said  decedent  and  an  executor  of  and  trustee  under  her  said  last 
Will  and  Testament  and  who  resides  at,  and  whose  post  office 
address  is,  Ringwood  Manor,  Passaic  County,  New  Jersey. 

Edward  R.  Hewitt,  who  is  a  son  of  the  said  decedent  and  who 
resides  at,  and  whose  post  office  address  is,  Ringwood  Manor, 
Passaic  County,  New  Jersey. 

Amy  H.  Green,  who  is  a  daughter  of  the  said  decedent  and 
who  resides  at,  and  whose  post  office  address  is,  Ringwood 
Manor,  Passaic  County,  New  Jersey. 

Sarah  Cooper  Hewitt,  who  is  a  daughter  of  the  said  decedent 
and  who  resides  at,  and  whose  post  office  address  is,  Ringwood 
Manor,  Passaic  County,  New  Jersey. 

Eleanor  G.  Hewitt,  who  is  a  daughter  of  the  said  decedent  and 


PETITION    FOR   APPOINTMENT  OF  APPRAISER          141 

who  resides  at,  and  whose  post  office  address  is,  Ringwood 
Manor,  Passaic  County,  New  Jersey. 

The  following,  who  are  children  of  the  said  Edward  R. 
Hewitt  and  reside  with  him,  and  whose  post  office  addresses  are 
in  his  care,  at  Ringwood  Manor,  Passaic  County,  New  Jersey, 
namely,  his  sons,  Ashley  Cooper  Hewitt  and  Abram  Stephens 
Hewitt,  and  his  daughters,  Candace  Hewitt  and  Lucy  Hewitt. 

Hon.  William  Sohmer,  Comptroller  of  the  State  of  New 
York,  whose  office  for  the  transaction  of  business  and  whose 
post  office  address  are  at  Albany,  New  York. 

WHEREFORE  your  petitioners  pray  for  an  order  appointing 
some  competent  person  as  an  appraiser  of  such  portion,  if  any, 
of  the  property  belonging  to  the  estate  of  the  said  Sarah  Amelia 
Hewitt,  as  is  subject  to  the  tax  above  referred  to,  and  of  the 
several  estates  and  interests,  if  any,  in  the  said  property  which 
are  subject  to  the  said  tax,  and  directing  the  said  appraiser  to 
give  such  notice  of  the  appraisement  to  those  entitled  thereto 
as  may  be  proper,  and  for  such  other  and  further  relief  as  may 
be  just. 

Dated,  New  York,  November  1, 1912. 

PETER  COOPER  HEWITT, 
ERSKINE  HEWITT, 
J.  0.  GREEN. 


STATE  OF  NEW  YORK, 
COUNTY  OF  NEW  YORK, 

Peter  Cooper  Hewitt,  Erskine  Hewitt  and  James  O.  Green, 
being  duly  and  severally  sworn,  each  for  himself,  says:  I  am  one 
of  the  petitioners  herein.  I  have  read  the  foregoing  petition. 
The  same  is  true  of  my  own  knowledge,  except  as  to  the  matters 
therein  stated  to  be  alleged  upon  information  and  belief,  and 
as  to  those  matters  I  believe  it  to  be  true. 

PETER  COOPER  HEWITT, 
ERSKINE  HEWITT, 
J.  O.  GREEN. 
Sworn  to  before  me  this 
1st  day  of  November,  1912. 
LAURA  E.  SMITH, 

Notary  Public,  Kings  County. 
Certificate  filed  in  New  York  County  No.  54, 
Regr.  No.  3224. 


142  NON-RESIDENT    ESTATES 

(17)  Order  appointing  appraiser 
The  order  entered  upon  the  application  is  as  follows: 


At  a  Surrogates'  Court,  held  in  and 
for  the  County  of  New  York,  at 
the  Hall  of  Records  in  the  Bor- 
ough of  Manhattan,  in  The  City 
of  New  York,  on  the  4th  day 
of  November,  1912. 


Present:  HON.  ROBERT  LUDLOW  FOWLER,  Surrogate. 

\ 
Order  Appointing  Appraiser. 


In  the  Matter  of  the  Transfer 
Tax  on  the  Estate  of 

SARAH  AMELIA  HEWITT, 
Deceased. 

Upon  reading  and  filing  the  petition  of  Peter  Cooper  Hewitt, 
Erskine  Hewitt  and  James  0.  Green,  verified  the  1st  day  of 
November,  1912,  I  do  hereby,  pursuant  to  the  requirements  of 
Chapter  658  of  the  Laws  of  1900,  and  the  Laws  amendatory 
thereof  and  supplemental  thereto,  direct  Joseph  I.  Berry,  Esq., 
one  of  the  appraisers  appointed  by  the  State  Comptroller  under 
the  said  statute,  to  fix  the  fair  market  value  at  the  time  of  the 
transfer  thereof  of  the  property  which  was  of  the  above  named 
decedent,  or  was  or  is  of  her  estate,  and  which  is  subject  to  the 
payment  of  any  tax  imposed  by  Article  10,  Chapter  908  of  the 
Laws  of  1896  and  the  acts  amendatory  thereof  and  supple- 
mental thereto. 

ROBERT  LUDLOW  FOWLER, 
Surrogate. 

(18)  Affidavit  for  appraisal 

There  has  not  been  adopted  any  set  form  of  affidavit 
for  appraisal  of  non-resident  estates. 

Prior  to  the  1911  amendment  it  was  necessary  to 
comply  with  rather  sweeping  requirements,  but  the 
appraisal  has  now  been  much  simplified.  The  practice 
after  the  order  has  been  obtained  follows  that  outlined  in 
resident  estates,  except,  of  course,  as  to  the  form  of  the 
affidavit  for  appraisal  and  the  scope  of  the  enquiry  regard- 
ing the  property  of  the  decedent.  Vide  Procedure  supra, 
page  82. 


AFFIDAVIT   FOR   APPRAISAL  143 

In  the  preparation  of  the  affidavit  for  appraisal  the 
following  form  will  be  an  aid : 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 


In  the  Matter  of  the  Appraisal, 
under  the  Transfer  Tax  Law, 


of  the  Estate  of 


JOHN  DOE, 
Deceased. 


Affidavit  for  Appraisal. 


STATE  OF  NEW  JERSEY,    ) 

V      oo    • 

COUNTY  OF  MONMOUTH,    ) 

Henry  Smith  being  duly  sworn  says: 

First:  That  deponent  resides  at  Locust,  Monmouth  County, 
State  of  New  Jersey. 

That  John  Doe,  the  decedent,  died  on  the  first  day  of  Septem- 
ber nineteen  hundred  and  thirteen  at  Locust,  Monmouth 
County,  State  of  New  Jersey. 

That  at  the  time  of  his  death  the  decedent  was  a  non-resident 
of  the  State  of  New  York.  That  decedent  at  the  time  of  his 
death  and  for  many  years  prior  thereto  had  been  a  resident  of 
said  Locust  (19). 

Second:  Decedent  left  a  last  will  and  testament,  a  certified 
copy  of  which  is  herewith  submitted,  which  was  duly  admitted 
to  probate  by  the  Surrogate  of  Monmouth  County,  State  of  New 
Jersey,  on  the  eighteenth  day  of  September  nineteen  hundred  and 
thirteen,  to  whom  jurisdiction  in  that  behalf  did  properly  be- 
long, and  letters  testamentary  were  duly  issued  to  deponent  on 
the  nineteenth  day  of  September  nineteen  hundred  and  thirteen, 
as  executor  of  said  last  will  and  testament;  and  thereupon 
deponent  duly  qualified  and  is  still  acting  as  such  executor. 

If  letters  have  not  been  issued  then  so  state.  Vide  supra, 
page  137. 

Third:  That  Schedule  A  hereunto  annexed  in  its  sub-schedules 
sets  forth  fully  and  hi  detail  all  the  real  estate  in  the  State  of 
New  York,  and  all  tangible  personal  property  within  the  State 
of  New  York,  owned  by  the  decedent  or  hi  which  said  decedent 
had  any  right,  title  or  interest  at  the  time  of  his  death,  or  of 
which  he  made  any  gift,  grant  or  conveyance  in  contemplation 
of  death,  or  to  take  effect  at  or  after  death,  or  which  by  reason 
thereof  fell  into  or  became  part  of  the  assets  of  this  estate  by 


144  NON-RESIDENT   ESTATES 

reversion,  remainder  or  otherwise,  excepting  such  as  may  have 
passed  by  virtue  of  the  exercise  by  the  decedent  of  any  power 
of  appointment  vested  in  him  by  the  Will  or  Deed  or  other 
instrument  of  another,  and  enumerated  in  Schedule  C. 

Schedule  Al  sets  forth  each  and  every  parcel  of  real  estate  in 
the  State  of  New  York  of  which  decedent  died  seized  and  pos- 
sessed, or  in  which  he  had  any  right,  title  or  interest,  together 
with  a  statement  of  the  liens  and  encumbrances  upon  each  at 
the  date  of  death,  giving  in  the  case  of  mortgages,  the  date, 
place,  liber  and  page  of  record  thereof.  It  also  sets  forth  in  the 
first  marginal  column  the  assessed  valuation  of  each  of  said 
parcels  and  in  the  second  marginal  column  the  estimated  market 
value  thereof  (as  appraised  by  a  competent  expert  in  real  estate 
values,  whose  supplemental  affidavit  is  herewith  submitted) 
(21). 

Schedule  A2  sets  forth  all  jewelry,  silverware,  pictures,  books, 
works  of  art,  household  furniture,  horses,  carriages,  automo- 
biles, boats,  and  any  and  all  other  personal  chattels  of  whatso- 
ever kind  or  nature,  within  the  State  of  New  York  at  the  time  of 
the  death  of  the  decedent,  (20)  together  with  the  fairly  estimated 
market  value  thereof  (as  appraised  by  a  competent  expert, 
whose  supplemental  affidavit  is  herewith  submitted)  (21). 

Schedule  A3  sets  forth  in  itemized  form,  together  with  the 
fair  market  value  thereof,  any  other  tangible  property  of  the 
decedent,  within  the  State  of  New  York  at  the  time  of  the  death 
of  decedent  and  not  included  in  the  preceding  sub-schedules. 
That  decedent  had  no  safe  deposit  box  within  the  State  of  New 
York  except 

Fourth:  Schedule  B  sets  forth  the  valid  debts  due  and  owing 
by  decedent  at  the  time  of  his  death  to  New  York  creditors  (22). 

Fifth:  Schedule  C  sets  forth  such  expenses  as  there  may  be 
relative  to  the  administration  of  the  tangible  property  within 
the  State  of  New  York. 

It  also  sets  forth  all  sums  by  way  of  commissions  properly 
and  legally  chargeable  against  such  property  (23). 

Sixth:  That  Schedule  C  hereunto  annexed  sets  forth  all  the 
property,  real  and  personal,  the  transfer  of  which  is  subject  to 
tax  under  the  provisions  of  subdivision  6  of  §  220,  which  passed 
at  decedent's  death  by  virtue  of  the  exercise  by  him  of  any 
power  of  appointment  vested  in  him  by  the  will,  deed  or  other 
instrument  of  another,  together  with  the  fair  market  value  of 
each  and  every  item  thereof  and  a  statement  hi  brief  of  the 


AFFIDAVIT   FOR  APPRAISAL  145 

source  and  derivation  of  such  power,  copies  of  which  will,  deed  or 
other  instrument  are  submitted  herewith. 

Vide  discussion  sub  Power  of  Appointment,  post,  page  781. 

Seventh:  That  Schedule  D  hereunto  annexed  contains  a  state- 
ment of  the  names  of  all  persons  beneficially  interested  in  this 
estate  at  the  time  of  decedent's  death,  the  nature  of  their  respec- 
tive interests,  their  relationship,  if  any,  to  the  decedent,  to- 
gether with  the  ages  at  the  time  of  decedent's  death  of  all 
minors,  annuitants  and  beneficiaries  for  life  under  decedent's 
will,  if  any.  It  also  contains  a  statement,  showing  which  of  the 
beneficiaries  named  in  decedent's  will,  if  any,  died  prior  to 
decedent,  the  dates  of  their  deaths,  their  survivors,  and  the  rela- 
tionship of  such  survivor  to  decedent. 

Eighth:  That  deponent  has  made  due  and  diligent  search 
for  tangible  property  within  the  State  of  New  York  left  by  the 
decedent,  and  has  been  able  to  discover  only  that  set  forth  in 
Schedule  A,  and  that  no  information  of  any  other  such  property 
of  the  decedent  has  come  to  his  knowledge,  and  that  he  verily 
believes  that  decedent  left  no  such  property  except  as  therein 
set  forth. 

That  all  the  sums  claimed  as  deductions  in  Schedule  B  are 
lawful,  just  and  fair. 

That  to  the  best  of  deponent's  knowledge,  information  and 
belief  the  decedent  made  no  gift,  grant  or  conveyance  of  any 
tangible  property,  real  or  personal,  in  contemplation  of  death, 
or  to  take  effect  at  or  after  death,  except  as  may  be  so  specifically 
set  forth  in  the  appropriate  sub-schedule  of  Schedule  A. 

Deponent  further  says  that  wherever  in  any  of  said  sub- 
schedules  the  word  "none"  has  been  written  in  or  wherever  such 
sub-schedule  has  been  left  blank,  such  word  or  omission  is  to  be 
taken  as  equivalent  to  an  affirmative  allegation  by  deponent 
that  the  decedent  left  no  property  of  the  kind  to  which  such 
sub-schedule  relates. 

HENRY  SMITH. 
Sworn  to  before  me  this 

1st  day  of  October,  1913. 
JOHN  JONES, 
Notary  Public, 

Monmouth  County. 

Attach  county  clerk's  certificate. 
10 


146  NON-RESIDENT   ESTATES 

(19)  Question  of  residence 

The  question  of  residence  is  given  close  scrutiny.  It  is 
sometimes  necessary  to  take  testimony.  Vide  MATTER 
OF  GRANT,  N,  Y.  Law  Journal,  November  14,  1913, 
opinion  quoted  post,  page  833. 

The  proof  required  to  establish  residence  varies  with 
the  circumstances  of  each  case.  The  following  affidavit 
is  a  good  example  of  the  method  of  placing  in  the  record 
convincing  allegations  as  to  residence  of  decedent. 

SURROGATES'  COURT,  NEW  YORK  COUNTY. 


In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of 

THOMAS  F.  BARDON, 

Deceased. 

COUNTY  OF  NEW  YORK,  ss.: 

LAWRENCE  BARDON,  being  duly  sworn,  says  that  he  is  the 
executor  under  the  last  Will  and  Testament  of  the  above  named 
deceased. 

That  said  Thomas  F.  Bardon  at  the  time  of  his  death  was  a 
resident  of  Locust,  Monmouth  County,  New  Jersey.  That  said 
Thomas  F.  Bardon  from  November  13,  1902,  had  a  life  estate  in 
the  dwelling  at  Locust  aforesaid,  which  was  formerly  the  prop- 
erty of  Mary  E.  Bardon  the  wife  of  said  Thomas  F.  Bardon. 

Upon  the  death  of  said  Mary  E.  Bardon,  deponent  and  Mary 
L.  Bardon,  the  son  and  daughter  respectively,  of  said  Mary  E. 
Bardon,  deceased,  recognized  the  life  estate  of  said  Thomas  F. 
Bardon  in  the  property  of  said  Mary  E.  Bardon  and  consented 
to  the  use  and  occupation  of  said  premises  at  Locust  aforesaid, 
by  said  Thomas  F.  Bardon  as  his  home  and  residence. 

That  for  a  period  of  more  than  six  years  said  Thomas  F. 
Bardon  paid  personal  taxes  as  a  resident  of  the  Township  of 
Middletown  within  which  is  comprised  Locust,  aforesaid,  as 
more  fully  appears  by  the  receipts  of  the  tax  collector  of  said 
Township,  hereto  attached  and  made  part  hereof. 

That  said  Thomas  F.  Bardon  also  voted  at  the  place  of  his 
residence  as  appears  from  the  certificates  of  the  Clerk  of  the 
Board  of  Election,  hereto  attached  and  made  part  hereof. 

That  whenever  said  Thomas  F.  Bardon  sojourned  in  New 
York  City  he  remained  at  the  apartment  of  his  daughter  Mary 


FOREIGN   DEBTS   AND   ADMINISTRATION   EXPENSES      147 

L.  Bardon  at  No.  97  Central  Park  West.  That  said  apartment 
was  leased  by  said  Mary  L.  Bardon  in  her  own  name  and  main- 
tained by  her  as  her  personal  residence. 

LAWRENCE  BARDON. 
Sworn  to  before  me  this 

17th  day  of  February,  1913. 
AUGUST  BAUTZ,  Jr., 
Commissioner  of  Deeds, 
City  of  New  York. 

(20)  Property  transiently  within  state 

Property  casually  brought  into  the  state  for  a  temporary 
purpose  is  not  subject  to  the  tax.  Matter  of  Romaine, 
127  N.  Y.  80-88;  Matter  of  Enston,  113  N.  Y.  174-182; 
Matter  of  Leopold,  35  Misc.  369. 

INVOLUNTARY  DETENTION  in  this  state  by  act  of  comp- 
troller does  not  operate  to  make  property  so  detained  sub- 
ject to  tax.  Matter  of  Revere,  N.  Y.  Law  Journal, 
January  28,  1913. 

(21)  Appraisals  by  experts 

The  practice  is  the  same  as  in  resident  estates.  Vide 
Matter  of  Barnes,  N.  Y.  Law  Journal,  Dec.  17,  1913, 
post,  page  694. 

(22)  Debts  due  resident  creditors 

Debts  due  resident  creditors  were  deducted  from  the 
New  York  assets  prior  to  the  1911  amendment.  Matter 
of  King,  71  App.  Div.  581,  affirmed,  on  opinion  below,  172 
N.  Y.  616;  Matter  of  Grosvenor,  124  App.  Div.  331,  and 
126  App.  Div.  953,  affirmed  193  N.  Y.  652. 

The  rule  in  the  King  and  Grosvenor  cases,  supra,  applies 
to  the  present  statute. 

(23)  Foreign  debts  and  administration  expenses 

In  Matter  of  Porter,  a  non-resident  estate  in  which  the 
decedent  died  prior  to  the  1911  amendment,  67  Misc.  19, 
affirmed,  without  opinion,  148  App.  Div.  896,  Surrogate 
Thomas  said : 

"The  executor  also  appeals  from  the  refusal  of  the  ap- 
praiser to  allow  any  deduction  on  account  of  debts  pre- 
sumably owing  to  creditors  without  the  State,  funeral  ex- 


148  NON-RESIDENT   ESTATES 

penses  and  administration  expenses,  including  commissions 
in  respect  to  property  without  the  State.  It  is  now  in- 
sisted on  behalf  of  the  State  Comptroller  that  as  debts 
owing  by  a  non-resident  decedent  to  New  York  creditors 
must  be  deducted  in  toto  from  New  York  assets,  under  the 
decision  in  Matter  of  Grosvenor,  124  App.  Div.  331, 
affd.,  193  N.  Y.  652,  no  further  deductions  are  allowable 
except  for  New  York  administration  expenses  and  New 
York  commissions.  No  decision  refusing  in  toto  the 
deductions  in  question  has  yet  been  made.  On  the  con- 
trary, it  has  been  held  that  such  deductions  are  to  be  made 
upon  a  pro  rata  basis.  In  the  Estate  of  Alice  Key  Browne, 
my  memorandum,  published  in  the  New  York  Law  Journal 
of  May  25, 1907,  reads  as  follows: 

"'Estate  of  Alice  Key  Browne — The  appeal  was  taken 
in  time.  The  appraiser  acted  correctly  in  pro  rating  debts 
due  to  creditors  not  domiciled  in  this  State  and  funeral  ex- 
penses (Matter  of  Doane,  N.  Y.  Law  Journal,  March  12, 
1903).  He  was  also  correct  in  pro  rating  the  annuities 
or  gifts  of  income  which  are  directed  by  the  will  to  be  paid 
generally  out  of  the  income  of  the  residuary  estate  given 
by  the  will  to  the  executor  in  trust.  The  executor,  how- 
ever, is  entitled  to  have  all  expenses  of  administration,  in- 
cluding the  commissions  allowable  to  him  in  the  dom- 
iciliary jurisdiction,  also  pro  rated,  and  for  this  purpose 
the  matter  will  be  remitted  to  the  appraiser  if  counsel  are 
unable  to  agree  upon  the  amount.  Settle  order  on  notice.' 

"The  executor  appealed  from  each  and  every  part  of  the 
order  made  pursuant  to  this  memorandum,  except  the 
part  which  adjudged  the  appeal  to  have  been  taken  in 
tune.  In  the  Appellate  Division  the  order  was  affirmed 
without  opinion  (Matter  of  Browne,  127  App.  Div.  941), 
and  in  the  Court  of  Appeals  (195  N.  Y.  522)  the  appeal  was 
dismissed  with  the  f ollowing  memorandum : 

"'Per  curiam — While  we  would  have  no  difficulty  in 
disposing  of  this  appeal  by  affirming  the  order  on  the 
merits  if  the  appeal  was  properly  before  us,  we  are  of  the 
opinion  that  the  order  appealed  from  is  interlocutory,  and 
therefore  the  appeal  must  be  dismissed,  with  costs.' 


CANNOT  COMPEL  DISCLOSURE  OF  NON-TAXABLE  ASSETS    149 

"The  exact  basis  upon  which  the  pro  rata  allowances 
should  be  made  was,  however,  not  litigated  or  determined 
in  that  case.  In  view  of  the  fact  that  the  rule  established 
in  the  Grosvenor  case,  supra,  for  the  deduction  of  New 
York  debts  is  very  liberal  to  the  estates  of  non-resident 
decedents.  I  think  thq  deduction  to  be  made  for  debts 
owing  to  non-resident  creditors,  mortuary  expenses,  com- 
missions on  property  without  the  State  and  other  adminis- 
tration expenses  in  respect  to  such  property,  should  be  in 
the  proportion  which  the  net  New  York  estate  (after  all 
deductions  are  made  for  debts  owing  to  resident  creditors, 
New  York  commissions  and  New  York  administration 
expenses)  bears  to  the  entire  or  gross  estate,  wherever 
situated.  The  trustee's  commissions,  which  are  the  sub- 
ject of  the  fourth  ground  of  appeal,  will  be  allowed  pro 
rata  to  the  extent  here  indicated." 

The  reasoning  of  the  Porter  case  would  seem  to  apply 
to  transfers  occurring  since  the  1911  amendment. 

COMMISSIONS  OF  FOREIGN  EXECUTORS  will  be  allowed  if 
claimed  and  evidence  introduced  before  the  appraiser 
showing  what  the  amount  of  such  commissions  will  be. 
Such  commissions  will  be  prorated. 

(24)  Pro  rata  deductions 

In  order  to  entitle  non-resident  estate  to  the  pro  rata 
deductions  for  foreign  debts,  mortuary  expenses  and  gen- 
eral administration  expenses  it  is  apparent  that  there 
should  be  presented  to  the  appraiser  itemized  schedules 
of  all  the  assets  of  the  estate  wheresoever  situated,  as  well 
as  an  itemized  list  of  all  such  debts  and  expenses. 

(25)  Cannot  compel  disclosure  of  non-taxable  assets 
Many  non-resident  estates  object  to  giving  this  informa- 
tion, and  they  are  within  their  rights  hi  refusing.    In  Mat- 
ter of  Bishop,  82  App.  Div.  112-115,  the  Court  said: 
"There  is  no  reason  why  the  executor  of  the  will  should  be 
put  to  the  annoyance  and  expense  of  preparing  inventories 
and  exhibiting  the  condition  of  an  estate  as  to  items  not 
taxable  in  the  State  of  New  York." 

If  the  representative  of  the  estate  stands  on  his  rights 


150  NON-RESIDENT   ESTATES 

and  does  not  furnish  the  information  as  to  non-taxable 
assets  there  will  not  be  before  the  appraiser  data  upon 
which  can  be  based  the  pro  rata  deductions.  As  was  said 
by  Surrogate  Thomas  in  Matter  of  Whiting,  69  Misc. 
526-527,  affirmed,  200  N.  Y.  520:  "It  is  only  incidental 
to  this  purpose,  and  in  order  to  apportion  between  the 
property  in  this  state  and  the  property  elsewhere  the 
debts  and  expenses  of  administration,  that  an  inquiry  is 
made  into  the  value  of  the  property  located  outside  of 
this  state." 

The  form  set  forth  supra  does  not  provide  for  the 
listing  of  non-taxable  assets.  If  it  is  desired  to  set  forth 
such  assets  then  there  should  be  added  to  the  affidavit 
a  schedule  giving  the  itemized  list  of  the  assets  whereso- 
ever situated,  and  also  a  schedule  itemizing  the  debts  and 
expenses. 

(26)  New  York  taxable  portion  determines  tax 

The  taxable  amount  of  the  New  York  portion  of  the 
estate  passing  to  each  beneficiary  determines  whether  the 
transfer  is  subject  to  the  tax.  Formerly  it  was  the  aggre- 
gate taxable  amount  of  the  New  York  portion  of  the  estate 
which  determined,  but  this  was  changed  by  the  amend- 
ment of  Laws  1910,  Chap.  706,  hi  effect  July  11,  1910; 
Matter  of  Ramsdill,  190  N.  Y.  492-494. 

To  illustrate:  the  total  net  value  of  the  property  whereso- 
ever situated  of  a  non-resident  decedent  is  one  million  dol- 
lars. Of  this  net  estate,  eight  hundred  thousand  dollars  is 
personal  property  situated  without  the  state  and  is  not 
taxable  for  that  reason;  one  hundred  thousand  dollars  is  in 
stock  of  New  York  corporations  and  deposits  in  New 
York  banks  which  are  not  taxable  since  the  amendment  of 
§§  220  and  243  by  Laws  1911,  Chap.  732,  in  effect  July  21, 
1911. 

The  remaining  one  hundred  thousand  dollars  is  cor- 
poreal property  such  as  goods,  wares  and  merchandise, 
within  the  state,  and  therefore  subject  to  the  tax.  Sub- 
division 2  of  §  220  and  the  second  sentence  of  §  243. 
What  the  tax  would  be  on  this  property  of  the  value  of  one 


GRADED   RATES   OF  TAX 


151 


hundred  thousand  dollars  depends  upon  the  beneficiaries 
who  are  to  receive  it.  Section  221a. 

Assume  that  no  part  of  the  estate  is  specifically  be- 
queathed and  that  it  is  to  be  divided  as  follows:  one 
hundred  thousand  dollars  to  a  daughter,  ninety  thousand 
dollars  to  a  brother,  sixty  thousand  dollars  to  a  mother, 
sixty  thousand  dollars  to  a  niece,  twenty  thousand  dollars 
to  a  nephew,  sixty  thousand  dollars  to  a  charitable  corpora- 
tion and  ten  thousand  dollars  to  a  person  not  related  to  the 
testator,  and  the  residue,  six  hundred  thousand  dollars, 
two-thirds  to  the  widow  and  one-third  to  the  son  of 
testator. 

As  the  value  of  the  non-taxable  property  is  nine  hun- 
dred thousand  dollars  and  the  property  within  the  state 
subject  to  the  tax  is  one  hundred  thousand  dollars,  the 
proportion  of  the  estate  subject  to  the,  tax  is  one-tenth, 
and  to  arrive  at  the  New  York  taxable  portion  of  each 
legacy  the  share  of  each  beneficiary  should  be  divided  by 
ten  in  accordance  with  the  provisions  of  subdivision  3  of 
§  220.  Applying  the  principle  to  this  hypothetical  case 
the  tax  would  work  out  as  follows: 


New  York 

Amount 

Beneficiary 

Entire 
interest 

portion 
subject 

of 

interest 

to  the  tax 

exempt 

Rate 

Tax 

Widow  

$400,000 

$40,000 

$5,000 

1% 

$350 

Son  

200,000 

20,000 

5,000 

*  /  \J 

1% 

150 

Daughter  

100,000 

10,000 

5,000 

/  V 

1% 

50 

Brother  

90,000 

9,000 

5,000 

/  \J 

1% 

40 

Mother  

60,000 

6,000 

5,000 

1% 

10 

Niece.  .  .         .... 

60,000 

6,000 

1,000 

5% 

250 

Nephew  

20,000 

2,000 

1,000 

/  V 

5% 

50 

Not  related  

10,000 

7 

1,000 

1,000 

0 

Charitable        cor- 

poration . 

60.000 

6.000 

6.000 



0 

$1,000,000        $100,000 

(27)  Graded  rates  of  tax 

If  the  taxable  New  York  portion  of  an  estate  passing  to 
&  beneficiary  enumerated  in  subdivision  1  of  §  22 la  is  over 


152  NON-RESIDENT   ESTATES 

fifty-five  thousand  dollars,  or  fifty-one  thousand  dollars 
in  case  of  a  beneficiary  not  enumerated  in  said  subdivi- 
sion 1,  then  the  principle  of  graded  taxes  begins  to  work. 
For  discussion  of  rates  of  tax  and  exemptions  vide  supra, 
page  43. 

(28)  Cannot  marshal  assets  to  avoid  tax 

The  question  of  marshaling  assets  of  a  non-resident 
decedent  is  discussed  in  a  recent  opinion  handed  down  by 
the  State  Comptroller  and  reported  1  State  Department 
Reports,  605.  The  opinion  refers  to  subdivision  3  of  §  220 
and  says:  "This  provision  reads  as  follows:  'Whenever 
the  property  of  a  resident  decedent,  or  the  property  of  a 
non-resident  decedent  within  this  state,  transferred  by  will 
is  not  specifically  bequeathed  or  devised,  such  property 
shall,  for  the  purposes  of  this  article,  be  deemed  to  be 
transferred  proportionately  to  and  divided  pro  rata  among 
all  the  general  legatees  and  devisees  named  in  said  de- 
cedent's will,  including  all  transfers  under  a  residuary 
clause  of  such  will,'  and  first  became  a  part  of  §  220  of  the 
Tax  Law  by  Chap.  310  of  the  Laws  of  1908,  in  effect 
May  18  of  that  year. 

"In  an  early  case  (Matter  of  James,  144  N.  Y.  6)  the 
Court  of  Appeals  held,  in  transfer  tax  proceedings  on  the 
property  in  this  state,  of  a  non-resident  decedent,  that  a 
foreign  executor  had  the  right  and  could  elect  to  pay 
legacies  passing  to  collateral  relatives  from  property  of  the 
decedent  at  his  domicile,  so  that  the  entire  assets  here 
would  pass  to  lineals  or  other  near  relatives  and,  under 
the  earlier  law,  thus  escape  taxation. 

"After  the  Law  of  1891,  taxing  transfers  to  lineals  and 
other  near  relatives,  the  practice  for  a  number  of  years 
was  to  tax  the  transfers  of  the  property  of  a  non-resident 
decedent  within  this  state  proportionately  as  passing 
pro  rata  to  both  the  one  and  the  five  per  cent  class,  in  all 
cases  where  the  decedent  left  legatees  or  heirs  at  law  and 
next  of  kin  in  both  classes  of  taxable  persons. 

"About  the  year  1904  the  non-resident  executors  com- 
menced to  incorporate  in  their  affidavits  a  provision 


CANNOT   MARSHAL   ASSETS   TO   AVOID   TAX  153 

to  the  effect  that  under  the  James  decision,  above  referred 
to,  they  elected  to  apply  all  the  assets  in  this  state  to  the 
payment  of  legacies  to  those  in  the  one  per  cent  class  and 
had  paid  or  intended  to  pay  the  five  per  cent  legacies  from 
property  of  the  decedent  without  this  state.  In  the  Matter 
of  McEwan,  51  Misc.  Rep.  455,  the  court  held  that  where 
the  non-resident  executor  had  failed  to  file  an  election 
showing  the  fund  from  which  the  legacies  to  collateral 
relatives  would  be  paid,  that  there  was  no  warrant  of 
law  to  justify  the  appraiser  hi  assuming  that  the  taxable 
legacies  under  the  will  would  be  paid  pro  rata  out  of  prop- 
erty in  this  state,  as  the  natural  inference  was  that  the 
assets  would  be  marshalled  by  the  foreign  executor  in 
such  a  way  as  to  require  the  smallest  payment  of  tax,  and 
if  the  affidavit  of  the  executor  was  material  to  produce  a 
different  result,  the  burden  of  proving  the  fact  rested  upon 
the  state. 

"In  Matter  of  Ramsdill,  119  App.  Div.  890,  both  the 
surrogate  and  the  Appellate  Division  held  that  where  a 
non-resident  decedent  died  intestate  the  administrator  of 
the  foreign  estate  had  the  same  right  to  elect  to  apply  the 
assets  within  this  state  in  payment  of  the  exempt  legacies 
or  legacies  taxable  at  the  lowest  rate  that  an  executor  had, 
but  the  Court  of  Appeals  reversed  the  Appellate  Division 
in  this  case  (Matter  of  Ramsdill,  190  N.  Y.  492),  hold- 
ing: 'Where  a  non-resident  of  this  state  dies  intestate 
leaving  assets  both  in  the  place  of  his  domicile  and  in  this 
state  and  his  next  of  kin  consists  of  a  brother  and  certain 
nephews  and  nieces,  his  administrator  cannot,  by  electing 
to  apply  all  of  the  portion  of  the  estate  within  our  jurisdic- 
tion to  the  payment  of  the  brother's  distributive  share, 
avoid  the  payment  of  a  transfer  tax  upon  that  part  thereof 
to  which  the  nephews  and  nieces  would  have  been  en- 
titled. If  a  specific  legatee  of  a  foreign  testator  can  obtain 
satisfaction  of  his  legacy  in  a  foreign  jurisdiction  the  execu- 
tor cannot  be  compelled  to  pay  it  out  of  the  assets  within 
our  jurisdiction,  but  hi  a  case  of  intestacy,  where  the 
distributee  takes  an  undivided  interest  in  the  whole  estate 
and  he  can  only  get  his  share  of  the  assets  within  this 


154  NON-RESIDENT   ESTATES 

state,  under  our  laws  and  through  our  courts,  the  adminis- 
trator cannot  so  apply  that  portion  of  the  estate  as  to 
avoid  the  payment  of  a  tax  upon  a  transfer  that  is  taxable 
under  the  statute.' 

"After  this  decision  subdivison  2a  (now  subd.  3)  of  §  220 
of  the  Tax  Law  was  added  by  Chap.  310  of  the  Laws  of 
1908,  and  was  intended  to  make  the  practice  uniform  in 
respect  to  taxing  the  transfers  of  property  in  both  testate 
and  intestate  estates  of  non-resident  decedents,  thereby  taking 
away  from  the  non-resident  executor  the  right  to  elect  to 
apply  the  assets  in  this  state  in  payment  of  exempt  lega- 
cies, or  legacies  taxable  at  the  lowest  rate,  unless,  of 
course,  the  property  here  was  specifically  bequeathed  or 
devised. 

"I  assume  the  intent  and  meaning  of  this  provision  is 
somewhat  obscure  to  one  not  acquainted  with  the  fore- 
going facts,  because  the  provision  applies  to  the  transfer 
of  the  property  of  a  resident  as  well  as  the  property  in  this 
state  of  a  non-resident  decedent.  The  property  of  a 
resident  decedent  was  included  in  this  provision  doubtless 
to  meet  any  constitutional  objection  to  the  amendment, 
which  otherwise  might  have  been  raised." 

(29)  Specifically  bequeathed  or  devised  property 

If  the  non-resident  decedent  specifically  devises  New 
York  real  estate  or  makes  a  specific  bequest  of  tangible 
personal  property  within  the  state  then  such  specific  devise 
or  bequest  is  taxable  against  the  individual  devisee  or 
legatee. 

Specific  bequests  or  devises,  whether  of  taxable  or  non- 
taxable  property,  should  be  deducted  from  the  assets  of 
the  estate  before  the  computation  of  the  pro  rata  amount 
of  the  taxable  property  passing  to  the  other  bene- 
ficiaries. 


KEPORT  WHERE    PROPERTY   SPECIFICALLY   DEVISED      155 

(30)  Report  where  property  specifically  devised 

Where  there  are  specific  devises  of  New  York  real  prop- 
erty the  report  of  the  appraiser  follows  this  form: 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 

In  the  Matter  of  the  Appraisal, 
under  the  Transfer  Tax  Law, 

of  the  Estate  of  Report  of  Appraiser. 

SARAH  AMELIA  HEWITT, 

Deceased. 

To  the  Surrogates'  Court  of  the  County  of  New  York: 

I,  Joseph  I.  Berry,  who  was  by  an  order  of  Hon.  Robert 
Ludlow  Fowler,  one  of  the  Surrogates  of  the  County  of  New 
York,  made  and  entered  on  the  6th  day  of  November,  1912, 
certified  copy  of  which  order  is  hereunto  annexed,  directed  to 
act  as  Appraiser,  pursuant  to  Chapter  908  of  the  Laws  of  1896, 
and  the  Acts  amendatory  thereof  and  supplemental  thereto,  do 
respectfully  report: 

First:  Having  filed  my  oath  of  office,  pursuant  to  Chapter  173 
of  the  Laws  of  1901,  in  the  office  of  the  State  Comptroller,  I 
gave  notice  by  mail,  postage  prepaid,  to  all  persons  known  to 
have  or  claiming  an  interest  hi  property  of  said  deceased,  to 
wit,  to  the  persons  and  corporations,  named  hi  the  petition 
presented  on  the  application  for  said  order.  The  time  and  place 
were  duly  set  forth  hi  said  notice  at  which  I  would  appraise 
such  property  of  the  above-named  decedent  as  might  be  subject 
to  the  payment  of  the  transfer  tax;  a  true  copy  of  said  notice  is 
hereto  attached: 

Second:  I  further  report  that,  at  the  time  and  place  in  said 
notice  stated,  to  wit:  On  the  10th  day  of  February,  1913,  at 
Room  2900,  City  Investing  Building,  No.  165  Broadway,  in  the 
Borough  of  Manhattan,  City,  County  and  and  State  of  New 
York,  I  appraised  the  estate  of  Sarah  Amelia  Hewitt,  deceased, 
situate  within  the  State  of  New  York,  at  its  fair  market  value  on 
the  14th  day  of  August,  1912,  the  date  of  her  death,  as  follows; 

Real  Estate  in  New  York 

Premises,  No.  9  Lexington  Ave $148,000.00 

Premises,  No.  13  Lexington  Ave 46,000.00 

Premises,  No.  145  East  22d  Street 38,000.00 

Burns  Farm,  Orange  County,  N.  Y 3,500.00 

Total  real  estate  in  New  York 3235,500,00 


156  NON-RESIDENT   ESTATES 

Tangible  Property  in  New  York 

Furniture,  etc $  10,492.50 

Contents  of  stable.  .  250.00 


Gross  estate  in  New  York $246,242.50 

(No  deductions) 

Third:  I  further  report  that  Sarah  Amelia  Hewitt  died  on  the 
14th  day  of  August,  1912,  a  resident  of  the  State  of  New  Jersey, 
leaving  a  last  will  and  testament,  a  copy  of  which  is  hereto 
annexed,  and  that  thereafter  on  the  10th  day  of  October,  1912, 
said  will  was  admitted  to  probate  by  the  Surrogate  of  Passaic 
County,  New  Jersey,  and  Peter  Cooper  Hewitt  and  Erskine 
Hewitt  were  duly  apppinted  executors. 

By  the  terms  of  said  will,  this  estate  is  disposed  of  as  per  the 
6th  paragraph  of  this  report. 

Fourth:  I  further  report  that  all  persons  interested  hi  this 
estate  are  of  full  age  and  sound  mind. 

Fifth:  I  further  report  the  following  appearances  before  me  in 
this  proceeding. 

JOHN  S.  JENKINS,  Esq., 
Attorney  for  State  Comptroller. 
PARSONS,  CLOSSON  &  MC!LVAINE,  Esqs., 

Attorneys  for  Executors. 

Sixth:  I  further  report  that  I  appraised  the  estate  of  Sarah 
Amelia  Hewitt,  deceased,  situate  within  the  State  of  New  York, 
subject  to  tax  in  this  proceeding,  at  its  fair  market  value  on  the 
14th  day  of  August,  1912,  the  date  of  her  death,  as  follows: 

Beneficiaries  Exempt      Taxable 

Amy  H.  Green,  daughter: 

Realty  specif,  devised $46,000.00 

l/g  residue 6,333.34 


$52,333.34    $5,000    $47,333.34 
Sarah  C.  Hewitt,  daughter: 

Realty  specif,  devised $74,000.00 

l/s  furniture 5,371.25 

Vi  Burns  Farm 1,750.00 

Ve  residue 6,333.33 


$87,454.58    $5,000      82,454.58 


ORDER   FIXING    TAX 


157 


Eleanor  G.  Hewitt,  daughter: 


Same,      5,000      82,454.58 


Erskine  Hewitt,  son: 

V«  residue $6,333.33      5,000        1,333.33 


Peter  C.  Hewitt,  son: 


Same,      5,000        1,333.33 


Edward  R.  Hewitt,  son: 

Life  estate  in  l/e  residue $6,333.33 

Less  commissions  . .  133.33 


Net  life  estate  in 

Present  value 
Remainder  $2,192  to: 
Ashley  C.  Hewitt,  grandson:  V< 
Abram  S.  Hewitt,  grandson: 
Candace  Hewitt,  granddaughter: 
Lucy  Hewitt,  granddaughter: 

Dated  New  York, 
July  10,  1913. 


.$6,200.00 
.$3,898.00      3,898 

$548.00         548 

Same,         548 

Same,         548 

Same,         548 

Respectfully  submitted, 

JOSEPH  I.  BERRY 
Appraiser. 


(31)  Order  entered  thereon 

At  a  Surrogates'  Court,  held  in  and 
for  the  County  of  New  York,  at 
the  Hall  of  Records,  in  the 
Borough  of  Manhattan,  The 
City  of  New  York,  N.  Y.,  on  the 
22ddayof  July,  1913. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 


In  the  Matter  of  the  Appraisal 
under  the  Act  in  Relation  to 
Taxable  Transfers  of  Prop- 
erty of  the  Property  of 
SARAH  AMELIA  HEWITT, 

Deceased. 


Order  Fixing  Tax  under 
§231. 


Upon  reading  the  report  of  Joseph  I.  Berry,  Esq.,  the  Ap- 
praiser herein,  duly  filed  hi  the  office  of  the  Surrogates  of  the 
County  of  New  York,  on  the  llth  day  of  July,  1913,  wherein  it 
appears  that  the  above-named  decedent  died  on  the  14th  day  of 
August,  1912,  a  resident  of  the  State  of  New  Jersey,  leaving 
certain  property  situated  within  the  State  of  New  York,  it  is, 


158 


NON-RESIDENT   ESTATES 


after  hearing  Parsons,  Closson  &  Mcllvaine,  attorneys  for  the 
Executors  of  the  Last  Will  and  Testament  of  the  said  decedent, 
ORDERED  AND  ADJUDGED  that  the  cash  value  of  the  property 
referred  to  in  the  said  report  on  the  14th  day  of  August,  1912, 
the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  Act 
Relating  to  Taxable  Transfers  and  the  Acts  Supplemental 
thereto  and  amendatory  thereof,  and  the  taxes  to  which  the 
said  transfers  are  liable  are  as  follows: 


Beneficiaries 


Cash  value 
of  interest 


Amy  H.  Green, 

daughter $52,333.34 

Sarah  C.  Hewitt, 

daughter 87,454.58 

Eleanor  G.  Hewitt, 

daughter 87,454.58 

Erskine  Hewitt, 

son 6,333.33 

Peter  Cooper  Hewitt, 

son 6,333.33 


Exempt 

$5,000 
5,000 
5,000 
5,000 
5,000 


Taxabk 
interest 


Tax 

assessed 
thereon 


$47,333.34    $       473.33 

82,454.58          1,149.09 

82,454.58 

1,333.33 


1,149.09 
13.33 
13.33 


1,333.33 
JOHN  P.  COHALAN, 

Surrogate. 

The  third  paragraph  of  §  231,  supra,  page  19,  provides 
that  the  surrogate  shall  forward  a  copy  of  the  taxing 
order  to  the  state  comptroller,  and  from  this  provision 
has  arisen  the  practice  of  requiring  the  attorney  for  the 
estate  to  submit  two  copies  of  the  proposed  order. 


THE  COURT  OF  APPEALS  DECISIONS 


Althause,  168  N.  Y.  670. 

Amherst  College  v.  Ritch,  151  N.  Y. 
282. 

Arnot,  203  N.  Y.  627. 

Backhouse,  185  N.  Y.  544. 

Baker,  178  N.  Y.  575. 

Balleis,  144  N.  Y.  132. 

Beach,  154  N.  Y.  242. 

Bishop,  188  N.  Y.  635. 

Blackstone,  171  N.  Y.  682. 

Bostwick,'  160  N.  Y.  489. 

Brandreth,  169  N.  Y.  437. 

Brez,  172  N.  Y.  609. 

Bronson,  150  N.  Y.  1. 

Browne,  195  N.  Y.  522. 

Burgess,  204  N.  Y.  265. 

Bushnell,  172  N.  Y.  649. 

Butler,  136  N.  Y.  649. 

Cager,  111  N.  Y.  343. 

Cameron,  181  N.  Y.  560. 

Catlin  v.  Trustees  of  Trinity  Col- 
lege, 113  N.  Y.  133. 

Chapman,  199  N.  Y.  562. 

Clinch,  180  N.  Y.  300. 

Coogan,  162  N.  Y.  613. 

Cook,  187  N.  Y.  253. 

Cook,  194  N.  Y.  400. 

Cooksey,  182  N.  Y.  92. 

Cooley,  186  N.  Y.  220. 

Corbett,  171  N.  Y.  516. 

Cornell,  170  N.  Y.  423. 

Costello,  189  N.  Y.  288. 

Craig,  181  N.  Y.  551. 

Cruger,  166  N.  Y.  602. 

Cullum,  145  N.  Y.  593. 

Curtice,  185  N.  Y.  543. 

Curtis,  142  N.  Y.  219. 

Daly,  182  N.  Y.  524. 

Davis,  J.  W.,  184  N.  Y.  299. 

Davis,  K.  J.  S.,  149  N.  Y.  539. 

Delano,  176  N.  Y.  486. 

Dows,  167  N.  Y.  227. 

Duell  v.  Glynn,  191  N.  Y.  357. 


Dunham   ».    City   Trust   Co.,    193 

N.  Y.  642. 

Edgerton,  158  N.  Y.  671. 
Edson,  159  N.  Y.  568. 
Edwards,  146  N.  Y.  380. 
Embury,  154  N.  Y.  746. 
Enston,  113  N.  Y.  174. 
Fayerweather,  143  N.  Y.  114. 
Fearing,  200  N.  Y.  340. 
Fitch,  160  N.  Y.  87. 
Francis,  189  N.  Y.  554. 
Freund,  202  N.  Y.  556. 
Gibbes,  176  N.  Y.  565. 
Gibson,  157  N.  Y.  680. 
Gihon,  169  N.  Y.  443. 
Glendinning,  171  N.  Y.  684. 
Gordon,  186  N.  Y.  471. 
Gould,  156  N.  Y.  423. 
Graves,  171  N.  Y.  40. 
Green,  153  N.  Y.  223. 
Grosvenor,  193  N.  Y.  652. 
Guggenheim,  189  N.  Y.  56L 
Haggerty,  194  N.  Y.  550. 
Hamilton,  148  N.  Y.  310. 
Hanford,  186  N.  Y.  547. 
Harbeck,  161  N.  Y.  211. 
Hellman,  174  N.  Y.  254. 
Hess,  187  N.  Y.  554. 
Hewitt,  181  N.  Y.  547. 
Hitchins,  181  N.  Y.  553. 
Hoffman,  143  N.  Y.  327. 
Hoople,  179  N.  Y.  308. 
Houdayer,  150  N.  Y.  37. 
Howe,  E.  L.,  176  N.  Y.  570. 
Howe,  Mary,  112  N.  Y.  100. 
Hull,  186  N.  Y.  586. 
Huntington,  168  N.  Y.  399. 
Isham  v.  N.  Y.  Assn.  for  the  Poor, 

177  N.  Y.  218. 

Jackson  v.  Tailer,  184  N.  Y.  603. 
James,  144  N.  Y.  6. 
Jones,  172  N.  Y.  575. 
Jourdan,  206  N.  Y.  653. 

159 


160 


THE   COURT   OF   APPEALS    DECISIONS 


Keeney,  194  N.  Y.  281. 
Kemp,  151  N.  Y.  619. 
Kidd,  188  N.  Y.  274. 
Kimberly,  150  N.  Y.  90. 
King,  172  N.  Y.  616. 
Knoedler,  140  N.  Y.  377. 
Langdon,  153  N.  Y.  6. 
Lansing,  182  N.  Y.  238. 
Lewis,  194  N.  Y.  550. 
Lind,  196  N.  Y.  570. 
Lord,  186  N.  Y.  549. 
Mahlstedt,  171  N.  Y.  652. 
Majot,  199  N.  Y.  29. 
Manning,  169  N.  Y.  449. 
Masury,  159  N.  Y.  532. 
Mather,  179  N.  Y.  526. 
Maverick,  198  N.  Y.  618. 
McCormick,  206  N.  Y.  100. 
McPherson,  104  N.  Y.  306. 
Mergentime,  195  N.  Y.  572. 
Merriam,  141  N.  Y.  479. 
Meyer,  209  N.  Y.  000. 
Miller,  110  N.  Y.  216. 
Mills,  177  N.  Y.  562. 
Morgan,  150  N.  Y.  35. 
Morgan  v.  Warner,  162  N.  Y.  612. 
Murphy,  157  N.  Y.  679. 
Naylor,  189  N.  Y.  556. 
Newcomb,  172  N.  Y.  608. 
O'Berry,  179  N.  Y.  285. 
Palmer,  Potter,  183  N.  Y.  238. 
Palmer,  S.  A.  L.,  158  N.  Y.  669. 
Patterson,  204  N.  Y.  677. 
Pell,  171  N.  Y.  48. 
People  v.  Prout,  117  N.  Y.  650. 
Pettit,  171  N.  Y.  654. 
Phipps,  143  N.  Y.  641. 
Plummer,  161  N.  Y.  631. 
Potter,  199  N.  Y.  561. 
Prime,  136  N.  Y.  347. 
Ramsdill,  190  N.  Y.  492. 
Read,  204  N.  Y.  672. 
Rees,  208  N.  Y.  590. 


Rhoads,  190  N.  Y.  525. 
Ripley,  192  N.  Y.  536. 
Rogers,  172  N.  Y.  617. 
Romaine,  127  N.  Y.  80. 
Roosevelt,  143  N.  Y.  120. 
Schwarz,  209  N.  Y.  mem. 
Scott,  208  N.  Y.  602. 
Scrimgeour,  175  N.  Y.  507. 
Seamen,  147  N.  Y.  69. 
Sherman,  153  N.  Y.  1. 
Sherwell,  125  N.  Y.  376. 
Silliman,  175  N.  Y.  513. 
Sloane,  154  N.  Y.  109. 
Spaulding,  163  N.  Y.  607. 
Spencer,  190  N.  Y.  517. 
Starbuck,  201  N.  Y.  531. 
Stewart,  131  N.  Y.  274. 
Stickney,  185  N.  Y.  107.  • 
Strail,  195  N.  Y.  575. 
Sutton,  149  N.  Y.  618. 
Swift,  137  N.  Y.  77. 
Thayer,  193  N.  Y.  430. 
Thome,  162  N.  Y.  238.  ' 
Thrall,  157  N.  Y.  46. 
Tiffany,  202  N.  Y.  550. 
Tilt,  182  N.  Y.  557. 
Tracy,  179  N.  Y.  501. 
Ullmann,  137  N.  Y.  403. 
Vanderbilt,  C.,  172  N.  Y.  69. 
Vanderbilt,  W.  H.,  163  N.  Y.  597. 
Van  Kleeck,  121  N.  Y.  701. 
Vassar,  127  N.  Y.  1. 
Vivanti,  206  N.  Y.  656. 
Watson,  171  N.  Y.  256. 
Weeks,  185  N.  Y.  541. 
Westurn,  152  N.  Y.  93. 
White,  208  N.  Y.  64. 
Whiting,  A.,  150  N.  Y.  27. 
Whiting,  C.  B.,  200  N.  Y.  520. 
Willets,  190  N.  Y.  527. 
Wolfe,  C.  L.,  137  N.  Y.  205. 
Wolfe,  C.,  179  N.  Y.  599. 
Zefita,  167  N.  Y.  280. 


The  statute  is  the  result  of  twenty-eight  years  of 
legislative  amendment,  many  of  the  changes  having  been 
made  as  a  direct  result  of  the  decisions  of  the  courts. 
The  Court  of  Appeals  have  passed  upon  the  various 
sections  of  the  statute  over  one  hundred  and  sixty  times, 


104  N.  Y.  306  161 

and  the  United  States  Supreme  Court  have  had  the 
statute  before  it  in  several  cases. 

These  cases  have  been  arranged  in  chronological  order 
of  their  decision  for  the  convenience  of  the  practitioner 
who  desires  to  study  the  law  as  it  has  been  developed  by 
the  courts  of  last  resort.  These  are  also  treated  topically, 
post,  page  582. 

The  extracts  from  the  decisions  have  been  selected  with 
the  view  of  covering  the  questions  which  would  be  most 
likely  to  arise  in  present  day  practice,  and  the  footnotes 
are  intended  to  aid  in  applying  the  opinion  to  the  other 
adjudications  on  similar  subjects. 

In  addition  to  these  cases  the  reports  abound  in  the 
decisions  of  the  Surrogates'  Courts  and  of  the  old  General 
Terms  and  of  the  present  Appellate  Divisions  which  have 
not  been  taken  to  the  Court  of  Appeals.  The  ones  which 
are  important  have  been  cited  topically,  post,  page  582. 


1887. 

MATTER  OF  MARY  McPHERSON,  104  N.  Y.  306. 

The  constitutionality  of  the  Act  of  1885,  chapter  483,  in 
effect  June  30,  1885,  was  upheld,  the  court  saying,  page  316: 
"Taxes  upon  legacies  and  inheritances  have  been  approved 
generally  by  writers  upon  political  economy  and  systems  of 
taxation,  and  no  tax  can  be  less  burdensome  and  interfere  less 
with  the  productive  and  industrial  agencies  of  society.  Such 
taxes  were  imposed  in  Rome  two  thousand  years  ago,  and  are 
now  imposed  in  England  and  several  of  the  continental  coun- 
tries of  Europe,  and  in  the  States  of  Pennsylvania,  Maryland 
and  Virginia,  and  perhaps  other  States  of  this  country  (Williams' 
Case,  3  Eland's  Ch.  R.  186,  259;  Eyre  v.  Jacobs,  14  Gratt.  422), 
and  in  1864  (13  U.  S.  Stats,  at  Large,  287)  a  tax  was  imposed 
by  the  Federal  government  upon  successions  to  real  estate. 
The  acts  imposing  such  taxes  have  frequently  come  before 
the  courts,  and  have  uniformly  been  upheld.  Carpenter  r. 
Comm.  of  Penn.,  17  How.  456;  Scholey  v.  Rew,  23  Wall.  331; 
Clapp  v.  Sampson,  94  U.  S.  589;  Wright  v.  Blakeslee,  101  id. 
174;  Mason  v.  Sargent,  104  id.  689;  In  re  Short's  Estate,  16 
Pa.  63;  Stinger  v.  Comm.,  26  id.  422;  Comm.  v.  Freedley,  21 
11 


162  THE    COURT  OF   APPEALS   DECISIONS 

id.  33;  Strode  v.  Comm.,  52  id.  181;  Miller  v.  Comm.,  27  Gratt. 
110;  Tyson  v.  State,  8  Md.  578;  State  v.  Dorsey,  6  Gill,  388; 
Williams'  Case,  Eland's  Ch.  R.  186.  The  case  of  the  State  v. 
Dorsey  was  a  curious  one,  possible  only  under  a  state  of  society 
long  since  passed  in  this  country.  There  the  bequest  of  free- 
dom to  a  slave  was  held  to  be  a  legacy  within  the  meaning 
and  operation  of  the  Maryland  act  imposing  taxes  upon  legacies, 
and  the  executor  was  compelled  to  pay  it." 

There  is  sufficient  provision  for  notice  and  hearing  for  all 
persons  interested  in  the  tax,  and  the  Act  secures  to  every  tax- 
payer, due  process  of  law  so  far  as  it  is  applicable  to  cases  of 
taxation.  If  the  appraiser  should  omit  to  give  notice  to  all 
persons  entitled  to  notice  under  the  statute,  it  would  be  an 
error  on  account  of  which  any  tax  imposed  upon  the  person 
not  notified  or  heard,  would  be  invalid  as  having  been  imposed 
without  jurisdiction. 

Vide  §§230  and  231.  Matter  of  Vassar,  127  N.  Y.  1-12;  Matter  of 
Romaine,  127  N.  Y.  80-86;  Matter  of  Embury,  19  App.  Div.  214-217, 
affirmed,  with  opinion,  154  N.  Y.  746;  Matter  of  Kimberly,  27  App.  Div. 
470;  Matter  of  Swift,  137  N.  Y.  77-83;  Matter  of  Ullmann,  137  N.  Y. 
403-407;  Weston  v.  Goodrich,  86  Hun,  194-199;  Matter  of  Wolfe,  89  App. 
Div.  349-352,  affirmed,  without  opinion,  179  N.  Y.  599;  as  to  §  25  of 
article  3  of  Constitution,  Matter  of  Stickney,  110  App.  Div.  294-296, 
affirmed,  per  curiam,  185  N.  Y.  107;  Beers  v.  Glynn,  211  U.  S.  477-483; 
Matter  of  Winters,  21  Misc.  552-555;  Matter  of  Daly,  34  Misc.  148-150. 


1888. 

MATTER  OF  MARY  E.  MILLER,  110  N.  Y.  216. 

Testatrix  died  September  30,  1886.  The  original  Act  (chap- 
ter 483,  Laws  of  1885)  provided,  inter  alia,  that  all  property  or 
the  income  thereof,  which  passed  by  will  to  any  corporations 
or  persons  other  than  "the  father,  mother,  husband,  wife, 
children,  brother  and  sister,  and  lineal  descendents  born  in 
lawful  wedlock,  *  *  *  shall  be  subject  to  a  tax,  to  be 
paid  to  the  treasurer  of  the  proper  county,  *  *  *  for 
the  use  of  the  state  and  that  all  administrators,  executors 
and  trustees  shall  be  liable  for  such  tax  until  the  same  shall 
have  been  paid  as  in  the  act  directed."  Testatrix  died  Septem- 
ber 30,  1886,  bequeathing  a  portion  of  her  property  to  one  who, 
in  his  infancy,  had  been  adopted  by  the  testatrix  as  her  son. 

Held,  that  a  transfer  to  an  adopted  child  was  taxable,  and 


Ill  N.  Y.  343  163 

that  the  amendment  of  chapter  713  of  the  Laws  of  1887  was 
not  retroactive.  The  fact  that  said  1887  amendment  added 
to  the  original  statute  the  words  "or  any  child  or  children 
adopted  as  such,  in  conformity  with  the  Laws  of  the  State  of 
New  York"  must  be  regarded  as  a  legislative  declaration  that 
the  law  did  not,  as  originally  passed,  embrace  the  provisions 
which  the  latter  act  supplies. 

Vide  subdivision  1,  §  221a.  Matter  of  Butler,  58  Hun,  400,  affirmed, 
without  opinion,  136  N.  Y.  649;  Matter  of  Cook,  187  N.  Y.  253-261; 
Matter  of  Duryea,  128  App.  Div.  205-207;  Domestic  Relations  Law,  §  114. 
As  to  burden  of  proof  vide  Matter  of  Fisch,  34  Misc.  146;  Matter  of 
Enston,  113  N.  Y.  174-183;  Matter  of  Harbeck,  161  N.  Y.  211-217;  Matter 
of  Buckingham,  106  App.  Div.  13-19. 


1838. 

MATTER  OF  WILLIAM  CAGER,  111  N.  Y.  343. 

The  testator  died  in  May,  1886,  and  in  the  inheritance  tax 
proceedings  it  became  necessary  to  construe  his  will.  The 
court  held  that  the  widow  took  a  life  estate  in  the  property 
devised  with  a  limited  power  of  disposition  for  her  use  and 
enjoyment,  and  that  any  interest  in  the  other  legatees  was 
dependent  upon  the  contingency  whether  the  power  of  dis- 
position was  exercised  by  the  life  tenant  during  her  life.  While 
it  was  possible  that  the  legatees  might  eventually  take  a  val- 
uable estate,  that  event,  being  contingent  upon  the  non-exercise 
by  the  widow  of  the  power  of  disposition,  rendered  the  present 
appraisable  value  of  such  interest  incapable  of  any  correct 
or  reasonably  approximate  valuation. 

The  court  say,  page  350:  "Whether  an  appraisal  of  the 
value  of  these  devises,  for  the  purpose  of  taxation,  may  be 
made  when  they  eventually  come  to  the  possession  of  the  dev- 
isees, we  are  not  called  upon  now  to  determine.  It  may  be 
that  the  tax  will  be  altogether  lost  to  the  State  if  an  appraisal 
is  not  now  allowed;  but  if  so,  the  fault  lies  hi  the  act  itself  and 
not  in  the  construction  which  its  language  requires  to  be  put 
upon  it."  1 

The  act  authorized  the  imposition  of  taxes  upon  transfers 
to  collateral  relatives  and  strangers  only  when  the  estate  de- 
vised to  them  individually  exceeded  the  sum  of  $500. 

Vide  Matter  of  Babcock,  37  Misc.  445-448,  affirmed,  without  opinion, 
81  App.  Div.  645;  Matter  of  Elizabeth  L.  Howe,  176  N.  Y.  570;  Matter  of 


164  THE   COURT   OF   APPEALS   DECISIONS 

Burgess,  204  N.  Y.  265,  and  §§  222  and  230;  Matter  of  Westurn,  152  N.  Y. 
93-100. 

Matter  of  Ullmann,  137  N.  Y.  403-408. 

1  Vide  §  221o;  Matter  of  Hoffman,  143  N.  Y.  327-330;  Matter  of  Cor- 
bett,  171  N.  Y.  516;  Matter  of  Costello,  189  N.  Y.  288;  Matter  of  Jourdan, 
206  N.  Y.  653;  Matter  of  Schwarz,  209  N.  Y.  000;  1  State  Department  Re- 
ports, 559. 

For  rates  of  tax  and  exemptions  under  present  statute  vide  page  40. 


1889. 

MATTER  OF  MARY  HOWE,  112  N.  Y.  100. 

Testatrix  died  June  16,  1885.  The  act  was  passed  June  10, 
1885,  but  did  not  take  effect  until  the  twentieth  day  after  its 
passage,  and  as  the  property  in  question  passed  by  the  will 
before  that  day,  no  tax  was  payable  upon  its  transfer. 

Matter  of  Hoffman,  143  N.  Y.  327-330. 


1889. 

CATLIN  v.  TRUSTEES  OF  TRINITY  COLLEGE,  113  N.  Y. 
133. 

Stephen  M.  Buckingham  died  a  resident  December  1,  1887, 
leaving  a  will  by  which  he  gave  a  legacy  of  $50,000  to  Trinity 
College,  a  Connecticut  corporation,  and  a  legacy  of  $10,000 
to  the  St.  Paul's  Protestant  Episcopal  Church  of  Poughkeep- 
sie,  incorporated  under  the  Laws  of  New  York.  The  trustees 
of  Trinity  College  and  the  Rector,  etc.,  of  St.  Paul's  Protes- 
tant Episcopal  Church,  appealed  from  so  much  of  a  judgment 
of  the  General  Term  as  directed  judgment  on  the  case  sub- 
mitted, adjudging  that  both  of  said  corporations  were  liable 
to  taxation  under  the  Collateral  Inheritance  Tax  Act  (chap- 
ter 713,  Laws  of  1887) ,  upon  the  two  said  legacies.  The  Court  of 
Appeals  say,  page  142:  "We  know  of  no  general  statute  exempt- 
ing the  personal  property  of  religious  societies  or  colleges  from 
taxation  and  we  are  of  opinion  that  neither  St.  Paul's  Church 
nor  Trinity  College  was  'exempted  by  law  from  taxation' 
within  the  Collateral  Inheritance  Act  of  1887." 

Vide  §  221;  Matter  of  Van  Kleeck,  121  N.  Y.  701-703;  Matter  of  Vassar, 
127  N.  Y.  1-12;  Matter  of  Prime,  136  N.  Y.  347-356;  Matter  of  Wolfe,  137 
N.  Y.  205-210;  Matter  of  Huntington,  168  N.  Y.  399-407;  United  States 
v.  Perkins,  163  U.  S.  625-630. 


113  N.  Y.  174  165 

As  to  submission  of  controversy,  Isham  v.  N.  Y.  Assn.  for  Poor,  177 
N.  Y.  218;  Code  of  Civil  Procedure,  §  1279. 

Vide  Weston  v.  Goodrich,  86  Hun,  194-202,  as  to  jurisdiction  of  Supreme 
Court. 


1889. 

MATTER  OF  HANNA  ENSTON,  113  N.  Y.  174. 

Testatrix  died  October  26,  1886,  a  resident  of  Philadelphia. 
A  large  portion  of  her  property  consisted  of  real  estate  in  the 
County  of  Kings  and  bonds  secured  by  mortgages  upon  real 
estate  in  the  State  of  New  York.  The  court  upheld  the  claim 
of  her  executors  that  the  transfer  of  the  decedent's  property 
was  not  subject  to  the  Collateral  Inheritance  Tax  because 
decedent  was  a  non-resident  of  the  State  of  New  York.  The 
court  say,  page  177:  "The  tax  imposed  by  this  act  is  not  a 
common  burden  upon  all  the  property  or  upon  the  People 
within  the  State.  It  is  not  a  general  but  a  special  tax,  reaching 
only  to  special  cases  and  affecting  only  a  special  class  of  persons. 
The  executors  in  this  case  do  not,  therefore,  in  any  proper 
sense,  claim  exemption  from  a  general  tax  or  a  common  burden. 
Their  claim  is  that  there  is  no  law  which  imposes  such  a  tax 
upon  the  property  in  their  hands  as  executors.  If  they  were 
seeking  to  escape  from  general  taxation,  or  to  be  exempted 
from  a  common  burden  imposed  upon  the  People  of  the  State 
generally,  then  the  authorities  cited  by  the  learned  counsel  for 
the  People,  to  the  effect  that  an  exemption  thus  claimed  must 
be  clearly  made  out,  would  be  applicable.  But  the  executors 
come  into  court  claiming  that  the  special  taxation  provided 
for  in  the  law  of  1885  is  not  applicable  to  themt  or  the  property 
which  they  represent.  In  such  a  case,  they  have  the  right, 
both  hi  reason  and  in  justice,  to  claim  that  they  shall  be  clearly 
brought  within  the  terms  of  the  law  before  they  shall  be  sub- 
jected to  its  burdens. 

"  It  is  a  well-established  rule  that  a  citizen  cannot  be  sub- 
jected to  special  burdens  without  the  clear  warrant  of  the  law. 
The  following  authorities  furnish  the  true  rule  applicable  to 
such  a  case:  Cooley  on  Taxation  (2d  ed.  275);  United  States  v. 
Wiggleworth  (2  Story,  373);  Powers  v.  Barney  (5  Blatch.  203); 
United  States  v.  Watts  (1  Bond,  583);  Doe  v.  Snaith  (8  Bing. 
152) ;  Green  v.  Holloway  (101  Mass.  248)  *  *  * 

"(Page  183.)  By  chapter  713  of  the  Laws  of  1887,  section  1  of 
the  act  of  1885  was  so  amended  as  to  subject  to  its  operation 


166        THE  COURT  OF  APPEALS  DECISIONS 

the  property  within  this  State  of  a  non-resident  decedent,  and 
this  amendment  furnishes  some  evidence  that  prior  thereto 
the  proper  construction  of  the  section,  according  to  the  under- 
standing of  the  legislature,  did  not  include  within  its  operation 
such  property." 

Vide  subdivisions  2  of  §  220  and  §  243.  For  discussion  of  present  law  vide 
page  133. 

Matter  of  Vassar,  127  N.  Y.  1-12;  Matter  of  Romaine,  127  N.  Y.  80-84; 
Matter  of  Swift,  137  N.  Y.  77-83;  Matter  of  Ullmann,  137  N.  Y.  403-^07, 
Matter  of  James,  144  N.  Y.  6-10;  Matter  of  Bronson,  150  N.  Y.  1-6;  Matter 
of  Embury,  19  App.  Div.  214-215,  affirmed,  without  opinion,  154  N.  Y. 
746. 

Matter  of  Wolfe,  89  App.  Div.  349-351,  affirmed,  without  opinion,  179 
N.  Y.  599;  Matter  of  David  Kennedy,  113  App.  Div.  4-6;  Matter  of 
Leopold,  35  Misc.  369-370;  Matter  of  Stebbins,  52  Misc.  439-441;  Matter 
of  Harbeck,  161  N.  Y.  211-217;  Matter  of  Miller,  77  App.  Div.  473-479; 
Matter  of  Bishop,  82  App.  Div.  112-116;  Matter  of  Gibbes,  84  App.  Div. 
510-512,  affirmed,  without  opinion,  176  N.  Y.  565;  Matter  of  de  Peyster, 
N.  Y.  Law  Journal,  January  21,  1913,  affirmed,  without  opinion,  156  App. 
Div.  938. 

Matter  of  Mergentime,  129  App.  Div.  367-374,  affirmed,  on  opinion 
below,  195  N.  Y.  572;  Matter  of  Starbuck,  63  Misc.  156-159,  affirmed  in 
201  N.  Y.  531;  Matter  of  Jourdan,  151  App.  Div.  8-12,  reversed  in  206 
N.  Y.  653,  on  dissenting  opinion  of  Jenks,  P.  J.,  below;  People  ex  rel.  Lown 
v.  Cook,  142  N.  Y.  Supp.  692-696;  158  App.  Div.  74-79. 


1889. 

THE  PEOPLE  v.  MOSES  P.  PROUT  ET  AL.,  AS  ADMINIS- 
TRATORS, 117  N.  Y.  660,  affirms,  without  opinion,  63 
Hun,  641. 

The  court  discuss  the  question  of  remitting  penalty  for 
non-payment  of  tax  under  the  act  of  1885,  and  say,  page  543: 
"A  tax  does  not  carry  interest  by  implication  of  law  as  in  the 
case  of  a  debt,  and  in  all  systems  of  taxation  where  default 
is  made  in  the  payment  of  the  tax  interest  is  added  by  way  of 
penalty  for  such  default.  And  so  in  the  fourth  section  of  the 
act  in  question,  if  the  tax  is  paid  within  one  year  interest  at 
the  rate  of  six  per  cent,  shall  be  charged  and  collected  thereon, 
but  if  not  so  paid,  interest  at  the  rate  of  ten  per  cent,  shall  be 
collected  and  charged  from  the  time  such  tax  accrued,  namely, 
from  the  death  of  the  decedent.  Then  follows  a  premium 
for  prompt  payment,  as  is  found  in  many  of  the  tax  laws,  whereby 


121  N.  Y.  701  167 

there  is  allowed  in  a  case  where  the  tax  is  paid  within  six  months 
a  discount  of  five  per  cent,  and  also  a  provision  that  no  interest 
shall  be  charged.  *  *  *  The  burden  rests  upon  the  party 
claiming  exemption  to  show  that  he  comes  within  the  provisions 
of  the  act,  namely,  that  the  settlement  of  the  estate  has  been 
delayed  by  necessary  litigation  or  other  unavoidable  cause,  and 
that,  therefore,  they  are  not  hi  a  condition  to  settle  the  estate 
or  pay  the  tax." 

Vide  §  223.  People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74r-79.  Matter 
of  De  Graff,  24  Misc.  147-150;  Matter  of  Stewart,  131  N.  Y.  274-285; 
Matter  of  Read,  204  N.  Y.  672,  quoted  post,  page  384;  Matter  of  Brower, 
N.  Y.  Law  Journal,  July  15, 1913,  opinion  quoted  sub  Interest. 


1890. 

MATTER  OF  EDGAR  M.  VAN  KLEECK,  121  N.  Y.  701. 

Testator  died  a  resident  January  6,  1887.  He  bequeathed 
to  his  wife  a  portion  of  his  estate  for  life,  with  remainder  of 
$10,000  over  to  Christ  Church  of  Poughkeepsie.  The  sole 
question  decided  was  whether  said  legacy  to  Christ  Church 
was  exempt  from  inheritance  tax  under  section  1  of  chapter  483 
of  the  Laws  of  1885,  which  provided  in  substance  that  all  prop- 
erty which  shall  pass  by  will,  other  than  to  or  for  the  use  of 
certain  persons  named,  and  the  "societies,  corporations,  and 
institutions  now  exempt  by  law  from  taxation,"  shall  be  sub- 
ject to  a  tax  of  $5  on  every  $100. 

Held,  that  the  church  was  liable  unless  it  could  claim  exemp- 
tion under  the  act  as  amended  by  chapter  398  of  the  Laws  of 
1890.  The  court  say,  page  703:  "It  is  true  that  the  state 
could  by  an  act  of  the  legislature  duly  passed  release  taxes 
already  due.  But  legislative  acts  are  always  construed  as  pros- 
pective in 'their  operation  unless  by  their  plain  language  it 
can  be  seen  that  it  was  the  legislative  intention  that  they  should 
have  retroactive  effect.  This  act  was  clearly  prospective  in 
its  operation,  and  applied  only  to  the  future,  and  as  this  tax 
became  due  and  payable  before  its  passage,  it  may  still  be 
enforced,  in  the  manner  provided  in  the  Collateral  Inheritance 
Act." 

Vide  §  221.  Matter  of  Wolfe,  137  N.  Y.  205-210.  Vide  Exemptions, 
post,  page  685. 


168  THE    COURT   OF   APPEALS   DECISIONS 


1891. 

MATTER    OF   BENJAMIN   W.   SHERWELL,   126   N.   Y. 
376. 

Testator,  at  the  time  of  his  death,  resided  in  England.  The 
court  say,  page  378:  "The  question  we  are  asked  to  review 
is,  what  construction  shall  be  given  to  so  much  of  section  1, 
of  chapter  713,  of  the  Laws  of  1887,  as  reads:  'All  property 
which  shall  pass  by  will  *  *  *  from  any  person,  who  may 
die  seized  or  possessed  of  the  same,  *  *  to  any  person 
or  persons  *  *  *  shall  be  and  is  subject  to  a  tax  of  five 
dollars  on  every  hundred  dollars  of  the  clear  market  value  of 
such  property,  and  at  and  after  the  same  rate  for  any  less 
amount,  *  *  *  for  the  use  of  the  state  *  *  *  pro- 
vided that  an  estate  which  may  be  valued  at  a  less  sum  than 
five  hundred  dollars  shall  not  be  subject  to  such  duty  or 
tax.' 

(<  The  surrogate  held  that  it  was  the  intention  of  the  legisla- 
ture that  all  taxable  estates  should  be  exempt  from  taxation 
to  the  extent  of  $500,  and  he,  therefore,  allowed  a  deduction  from 
each  of  the  legacies  in  question  of  that  amount,  leaving  the  bal- 
ance for  assessment  for  purposes  of  taxation  under  the  act. 
The  General  Term  reversed  this  decision;  holding  that  the 
legislative  intent  was  to  limit  the  estates  upon  which  the  tax 
should  be  imposed. 

"  We  think  their  decision  was  clearly  right. 

"  The  legislature  is  not  controlled  as  to  the  extent  of  taxation 
of  property  within  the  state,  and  in  imposing  a  special  tax  upon 
all  persons  within  a  certain  class,  there  is  no  violation  of  funda- 
mental principles.  The  tax  is  one  which  applies  to  all  cases 
which  are  described  in  the  act.  *  *  * 

"  (Page  379.)  What  it  has  done  in  this  act  of  legislation  is 
to  impose  a  certain  tax  in  every  case  where  there  is  a  succession 
to,  or  devolution  of  property  of  the  value  of  $500  and  upwards. 
As  the  tax  is  made  to  apply  to  every  estate,  which  is  bequeathed 
or  devised  to,  or  inherited  by,  the  persons  specified  in  the  act, 
it  is  equal  and,  therefore,  free  from  objection  on  legal  grounds. 
It  is  not  correct  to  say  that  this  act  is  one  which  grants  exemp- 
tion from  taxation  in  certain  cases.  It  defines  the  cases  in 
which  the  taxing  power  is  applied  as  new  objects  for  taxation. 
If  the  inheritance,  or  the  testamentary  gift,  amounts  to  $500 
or  more,  then  the  act  operates  to  create  a  liability  in  favor  of 


127  N.  Y.  1  169 

the  state  to  the  extent  mentioned;  but  if  it  is  less,  the  act  is 
wholly  inoperative." 

Matter  of  Swift,  137  N.  Y.  77-83;  Matter  of  Ullman,  137  N.  Y.  403-407; 
Matter  of  Jourdan,  206  N.  Y.  653;  Matter  of  Scott,  208  N.  Y.  602;  Matter 
of  Mason,  69  Misc.  280-285,  and  State  Comptroller's  opinion,  dated  Jan- 
uary 27,  1913,  1  State  Department  Reports,  559. 

As  to  rates  of  tax  and  exemptions  since  amendment  by  Laws  of  1911, 
chapter  732,  in  effect  July  21,  1911,  vide  §  221a  and  Matter  of  Schwarz, 
209  N.  Y.  000,  and  text  supra,  page  40.  As  to  non-resident  estates  since 
1911  amendment  vide  text  supra,  page  133. 


1891. 

MATTER  OF  JOHN  GUY  VASSAR,  127  N.  Y.  1. 

Testator  died  October  27,  1888.  The  personal  estate  of  the 
deceased  amounted  to  upwards  of  two  million  dollars,  and  at 
the  time  of  the  hearing  before  the  appraiser  the  same  had  been 
increased  by  the  collection  of  interest  upon  investments  made 
in  the  amount  of  about  $150,000,  so  that  the  question  as  to 
whether  the  increase  is  subject  to  the  tax  is  one  of  some  im- 
portance. Chapter  713  of  the  Laws  of  1887  provided:  "Sec- 
tion 1.  After  the  passage  of  this  act,  all  property  which  shall 
pass  by  will  or  by  the  intestate  laws  of  this  state  from  any  person 
who  may  die  seized  or  possessed  of  the  same  *  *  *  shall 
be  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars 
of  the  clear  market  value  of  such  property."  The  court  say, 
page  7:  "It  will  be  observed  that  the  property  here  referred 
to  is  that  of  which  a  person  may  die  seized  or  possessed.  By 
section  2  of  the  act  is  provided  that  'When  any  grant,  gift, 
legacy  or  succession  upon  which  a  tax  is  imposed  by  section 
first  of  this  act  shall  be  an  estate,  income  or  interest  for  a  term 
of  years,  or  for  life,  or  determinable  upon  any  future  or  con- 
tingent event,  or  shall  be  a  remainder,  reversion  or  other  ex- 
pectancy, real  or  personal,  the  entire  property  or  fund  by  which 
such  estate,  income  or  interest  is  supported,  or  of  which  it  is  a 
part,  shall  be  appraised  immediately  after  the  death  of  the  de- 
cedent at  what  was  the  fair  and  clear  market  value  thereof 
at  the  time  of  the  death  of  the  decedent,  in  the  manner  herein- 
after provided,  and  the  surrogate  shall  thereupon  assess  and 
determine  the  value  of  the  estate,  income  or  interest  subject 
to  said  tax  in  the  manner  provided  in  section  13  of  this  act, 
and  the  tax  prescribed  by  this  act  shall  be  immediately  due 


170  THE   COURT   OF   APPEALS   DECISIONS 

and  payable  to  the  treasurer  of  the  proper  county,'  etc.  And 
again,  section  4,  '  All  taxes  imposed  by  this  act,  unless  otherwise 
herein  provided  for,  shall  be  due  and  payable  at  the  death  of 
the  decedent,  and  if  the  same  are  paid  within  eighteen  months, 
no  interest  shall  be  charged  and  collected  thereon,  but  if  not 
so  paid,  interest  at  the  rate  of  ten  per  cent,  per  annum  shall 
be  charged  and  collected  from  the  time  said  tax  accrued;  pro- 
vided that  if  said  tax  is  paid  within  six  months  from  the  ac- 
cruing thereof,  a  discount  of  five  per  cent,  shall  be  allowed 
and  deducted  from  said  tax.' 

"  We  shall  not  stop  to  consider  whether  the  bequests  hi  ques- 
tion are  those  mentioned  within  the  provisions  of  section  2 
of  the  act  referred  to,  for  the  reason  that  if  they  are  not  covered 
by  the  provisions  of  that  section,  they  certainly  are  by  that 
of  section  4;  but  the  provisions  of  the  former  section  indicate 
the  legislative  intent  as  bearing  upon  the  question  under  con- 
sideration, for  it  requires  the  appraisal  to  be  made  immediately 
after  the  death  of  the  decedent  at  the  fair  market  value  of  the 
property  at  the  time  of  the  death,  and  makes  the  tax  immedi- 
ately due  and  payable,  and  to  the  same  effect  are  the  provisions 
of  section  4,  for  therein  the  taxes  imposed  are  made  due  and 
payable  at  the  death.  If  they  are  not  paid  within  eighteen 
months,  interest  thereon  at  the  rate  of  ten  per  cent,  may  be 
charged  and  collected,  but  if  they  are  paid  promptly  or  before 
the  expiration  of  six  months,  a  discount  of  five  per  cent,  is  al- 
lowed. It  appears  to  us  that  these  provisions  are  inconsistent 
with  the  claim  that  the  tax  is  not  to  be  assessed  until  the  final 
accounting  of  the  executors,  and  then  is  to  be  assessed  upon  the 
interest  that  has  been  collected  upon  the  funds  in  their  hands. 
This  would  not  only  deprive  the  legatees  of  the  right  to  avail 
themselves  of  the  discount  of  five  per  cent.,  but  would  sub- 
ject them  to  the  liability  of  being  taxed  upon  interests  there- 
after accruing.  The  better  and  more  reasonable  construction 
of  the  statute  is  that  the  property  of  which  the  person  died 
seized  or  possessed  is  subject  to  the  tax;  that  the  increase  or 
interest  thereafter  obtained  by  the  executors  is  property  of 
which  the  testator  was  not  seized  or  possessed  at  the  time  of 
his  death;  that  the  property  should  be  appraised  and  the  tax 
assessed  as  soon  after  death  as  practicable  and  that  the  tax 
should  then  become  immediately  due  and  payable;  that  the 
provision  for  charging  interest  thereon,  in  case  it  is  not  paid, 
is  hi  lieu  of  any  increase  or  interest  that  may  be  derived  from 


127  N.  Y.  80  171 

the  estate  by  the  executors."  The  court  further  say,  page  12: 
"The  taxes  imposed  by  the  Collateral  Inheritance  Act  are 
special  and  not  general." 

Vide  §§  222,  223  and  230;  Matter  of  Westurn,  152  N.  Y.  93-101;  Matter 
of  Miller,  77  App.  Div.  473-480;  Matter  of  Star-buck,  63  Misc.  156-160, 
affirmed  201  N.  Y.  531. 

Matter  of  Thorne,  44  App.  Div.  8-10,  affirmed,  162  N.  Y.  238. 


1891. 

MATTER  OF  WORTHINGTON  ROMAINE,  127  N.  Y.  80. 

Intestate  died  in  September  1888,  a  resident  of  Virginia. 
The  court  say,  page  83:  The  original  act  provided  that  after 
the  passage  thereof  'All  property  which  shall  pass  by  will 
or  by  the  intestate  laws  of  this  state  from  any  person  who  may 
die  seized  or  possessed  of  the  same  while  being  a  resident  of  the 
state,  or  which  property  shall  be  within  the  state,'  to  any  one 
other  than  certain  excepted  persons  nearly  related  to  the  dece- 
dent, should  be  subject  to  a  tax  of  five  dollars  upon  the  hundred 
'of  the  clear  market-value  of  such  property.'  (Laws  of  1885, 
chap.  483,  section  1.)  When  this  statute  came  before  the 
courts  for  construction,  it  was  held  not  to  apply  to  property 
within  the  state,  either  real  or  personal,  that  passed  by  will 
or  intestacy  from  a  non-resident  decedent  to  collateral  relatives 
or  strangers,  and  that  it  was  limited  in  its  effect  to  property 
so  passing  from  resident  decedents.  (Matter  of  Enston,  113 
N.  Y.  174;  Matter  of  Tulane,  51  Hun,  213;  Matter  of  Clark, 
9  N.  Y.  Supp.  444.)  In  1887,  however,  the  legislature  amended 
the  act  so  that  it  provided  that  'all  property  which  shall  pass 
by  will  or  by  the  intestate  laws  of  this  state,  from  any  person 
who  may  die  seized  or  possessed  of  the  same  while  a  resident  of 
this  state,  or  if  such  decedent  was  not  a  resident  of  this  state  at 
the  time  of  death,  which  property,  or  any  part  thereof,  shall  be 
within  this  state,'  etc.  (Laws  of  1887,  chap.  713,  section  1.) " 

The  court  also  say,  page  86:  "The  fiction  of  law  that  per- 
sonal estate  has  no  situs  away  from  the  person  or  residence 
of  its  owner  is  done  away  with,  to  a  limited  extent  and  for  a 
specified  purpose,  and  the  truth  is  substituted  in  its  stead  as 
the  rule  of  action." 

Held,  that  where  the  property  of  a  non-resident  (page  89) 
"  is  habitually  kept,  even  for  safety,  in  this  state,  that  the  statute 
applies  both  in  the  letter  and  spirit.  Such  property  is  within 


172  THE    COURT   OF   APPEALS   DECISIONS 

this  state  in  every  reasonable  sense,  receives  the  protection 
of  its  laws  and  has  every  advantage  from  government,  for  the 
support  of  which  taxes  are  laid,  that  it  would  have  if  it  belonged 
to  a  resident." 

Vide  Matter  of  Houdayer,  150  N.  Y.  37-40;  Matter  of  Embury,  19  App. 
Div.  214-216,  affirmed,  without  opinion,  154  N.  Y.  746;  Matter  of  Gibbes, 
84  App.  Div.  510-512,  affirmed,  without  opinion,  176  N.  Y.  565;  Matter  of 
James,  144  N.  Y.  6-12;  Matter  of  Phipps,  143  N.  Y.  641;  Blackstone  v. 
Miller,  188  U.  S.  189;  Matter  of  Starback,  63  Misc.  156-160,  affirmed  in 
201  N.  Y.  531;  Matter  of  Burr,  16  Misc.  89-90;  Matter  of  Leopold,  35 
Misc.  369;  Matter  of  Clark,  N.  Y.  Law  Journal,  February  9,  1912;  Matter 
of  Swift,  137  N.  Y.  77-83. 

Chapter  732,  Laws  of  1911,  in  effect  July  21,  1911,  provides  that  when 
the  decedent  is  a  non-resident  of  the  state  at  the  time  of  his  death  the  only 
transfer  of  property  subject  to  the  tax  is  the  transfer  of  tangible  property 
within  the  state  (subdivisions  2  and  4,  §  220).  The  said  1911  amendment 
to  §243  provides  that  the  words  "tangible  property"  shall  be  taken  to 
mean  "corporeal  property  such  as  real  estate  and  goods,  wares  and  mer- 
chandise, and  shall  not  be  taken  to  mean  money,  deposits  in  bank,  shares  of 
stock,  bonds,  notes,  credits  or  evidences  of  an  interest  in  property  and 
evidences  of  debt." 


1892. 

MATTER  OF  CORNELIA  M.  STEWART,  131  N.  Y.  274. 

Testatrix  died  October  26,  1886.  The  court  say,  page  285: 
"Intermediate  the  death  of  the  testatrix  and  the  expiration 
of  the  eighteen  months,  proceedings  were  instituted  for  the 
revocation  of  the  probate  of  the  will,  which  were  not  terminated 
until  January  16,  1890.  Section  2650  of  the  Code  suspends 
action  by  an  executor  after  he  has  been  served  with  a  citation 
upon  a  petition  to  revoke  probate,  until  a  decree  is  made  in 
the  proceeding,  except  for  the  preservation  of  the  property, 
the  collection  and  payment  of  debts,  and  acts  expressly  au- 
thorized by  the  surrogate  upon  notice  to  the  petitioner.  It 
is  claimed  that  interest  should  not  be  charged  during  this  period. 
The  5th  section  of  the  act  is  an  answer  to  this  claim.  It  was 
the  later  statute  and  it  enacts  that  a  modified  rate  of  interest 
shall  be  charged  where  'by  reason  of  claims  made  upon  the 
estate,  necessary  litigation,  or  other  unavoidable  cause  of  delay 
the  estate  of  the  decedent'  cannot  be  settled,  etc.  The  delay 
in  this  case  was  in  consequence  of  litigation.  The  legislature 
provided  for  cases  like  this  by  reducing  the  rate  of  interest  dur- 
ing such  delay.  The  courts  cannot  interfere."  l 

The  court  say,  page  278:  "The  testatrix  gave  one-half  of 


131  N.  Y.  274  173 

her  residuary  estate  to  Henry  Hilton,  in  trust,  to  apply  in  his 
discretion  such  portion  thereof  as  he  might  deem  expedient  to  the 
erection  and  endowment  of  a  seminary  of  learning  for  women, 
and  the  erection  of  buildings  and  institutions  connected  with 
the  Memorial  Cathedral  Church  of  Garden  City,  Long  Island, 
with  power  to  appoint  any  part  of  the  trust  estate  which  in 
his  opinion  would  not  be  needed  or  required  for  the  purposes 
'of  the  trust,  among  any  of  the  legatees  named  in  the  will. 
This  power  was  exercised  for  the  first  time  on  the  16th  day  of 
January,  1890,  three  years  and  more  after  the  death  of  the 
testatrix. 

"*  *  *  (page  278.)  The  trustee,  after  applying  a  portion 
of  the  trust  estate  to  the  purposes  of  the  cathedral,  appointed 
the  balance  of  the  trust  fund,  amounting  to  more  than  two 
million  dollars,  among  ten  of  the  nineteen  legatees,  one-tenth 
of  which  (being  the  sum  of  $248,540.16)  was  appointed  to 
Charles  J.  Clinch,  a  nephew  of  the  testatrix. 

"*  *  *  (Page  279.)  The  contention  that  the  sum  received 
by  Charles  J.  Clinch  under  the  power  of  appointment  is  not 
taxable,  is  placed  upon  two  propositions,  first,  that  until  the 
power  of  appointment  was  actually  exercised,  Charles  J.  Clinch 
had  at  most  a  mere  possibility  that  he  might  share  in  the  dis- 
tribution, and  had  no  estate  vested  or  contingent  in  the  fund, 
and  that  this  possibility  or  chance  was  incapable  of  any  valua- 
tion at  the  decedent's  death,  as  he  might  receive  something 
or  nothing,  depending  on  the  will  of  the  donee  of  the  power, 
and  second,  that  the  statute  contemplates  the  taxation  of  such 
interests  only  as  are  capable  of  valuation  at  the  death  of  the 
decedent,  and  provides  no  method  for  taxing  an  uncertain 
and  contingent  interest  which  may  never  vest  in  posses- 
sion. *  *  *  . 

"(Page  281.)  The  obvious  intent  of  the  legislature  was  to 
impose  a  tax  on  every  interest,  immediate  or  future,  derived 
under  a  testator  or  intestate,  not  embraced  in  the  exception. 

"*  *  *  (Page  282.)  There  are  two  sections  in  the  act  of 
1885,  which  prescribe  the  procedure  for  fixing  the  valuation 
and  assessing  property  subject  to  taxation.  These  are  sections 
2  and  13.  Section  2  relates  to  a  special  class  of  cases,  viz., 
cases  where  property  is  devised  or  bequeathed  for  life,  or  a 
term  of  years,  to  a  person  whose  interest  is  exempted  from  the 
payment  of  any  tax,  with  remainder  over  to  collaterals  or 
strangers  in  blood.  In  these  cases  the  section  prescribed  that 


174  THE    COURT   OF   APPEALS   DECISIONS 

the  (entire)  property  passing  under  such  a  devise  or  bequest 
shall  be  appraised  '  immediately  after  the  death  of  the  decedent, 
at  what  was  the  fair  market  value  thereof  at  the  time  of  the 
death  of  the  decedent/  and  after  deducting  the  value  of  the 
estate  for  life  or  years,  that  the  tax  prescribed  by  the  act  on 
the  remainder  'shall  be  immediately  due  and  payable.'  Pro- 
vision is  made  that  the  party  beneficially  interested  in  the 
property  chargeable  with  the  tax  may  give  a  bond  to  pay  the 
tax  when  he  may  come  into  the  actual  possession  and  enjoy- 
ment. This  section  contains  the  only  provision  to  be  found 
in  the  act  prescribing  in  terms  the  time  when  an  appraisal 
shall  be  made,  or  which  directs  that  the  value  of  the  subject 
of  the  tax  shall  relate  to  'the  death  of  the  decedent.'  The 
section  obviously  has  no  relation  to  the  case  now  in  ques- 
tion. *  *  *  Section  two  has  reference  to  a  specified  class  of 
cases  only  in  which  the  case  now  in  question  is  not  included. 
The  section  primarily  relates  to  certain  legal  vested  estates 
for  life  or  years,  and  remainders  limited  thereon,  when  the 
value  of  both  estates  can  be  determined  at  the  death  of  the 
testator.  We  must  look  elsewhere  to  ascertain  how  the  property 
is  to  be  valued  and  the  tax  determined  in  the  numerous  other 
cases  arising  on  wills,  not  embraced  in  the  class  specified  in 
section  two. 

''Section  13  is  a  general  section  prescribing  the  method  of 
appraising  and  valuing  property  subject  to  the  payment  of  a 
tax  under  the  act.  By  that  section  the  surrogate  is  authorized 
to  appoint  an  appraiser  of  such  property  'as  often  and  when- 
ever occasion  requires,'  who,  at  a  time  and  place  appointed, 
of  which  notice  is  to  be  given,  shall  'appraise  the  same  at  its 
fair  market  value,'  and  make  his  report,  from  which  the  surro- 
gate shall,  'forthwith  assess  and  fix  the  then  cash  value  of  all 
estates,  annuities  and  life  estates,  or  terms  of  years  growing 
out  of  said  estate,  and  the  tax  to  which  the  same  is  liable.' 
It  is  to  be  noticed  that  this  section  does  not,  as  does  the  second 
section,  require  the  valuation  to  be  made  immediately  upon 
the  death  of  the  decedent;  on  the  contrary,  it  contains  the 
significant  words  that  an  appraiser  may  be  appointed  '  as  often 
as  and  whenever  occasion  may  require.'  Nor  does  section  13 
prescribe  that  the  property  appraised  thereunder  shall  be  ap- 
praised '  at  what  was  the  fair  market  value  thereof  at  the  time 
of  the  death  of  the  decedent,'  as  is  required  in  the  cases  falling 
under  the  second  section. 


136  N.  Y.  347  175 

"Under  section  13  the  appraiser  is  to  appraise  the  property 
'at  its  fair  market  value,'  and  the  surrogate,  on  the  coming 
in  of  the  report,  is  to  assess  and  fix  the  'then  cash  value'  of 
all  the  estates,  etc.,  upon  which  the  tax  is  chargeable.  There 
are  no  limiting  words  such  as  are  found  in  section  2.  Section 
13  is  the  section  which,  in  the  great  majority  of  cases,  governs, 
since  the  cases  arising  under  section  2  form  but  a  small  propor- 
tion of  the  cases  within  the  provisions  of  wills. 

"*  *  *  (Page  284.)  The  13th  section  includes  cases  like 
the  present,  and  that  contingent  interests  given  by  a  will, 
which  after  the  death  of  the  testator  are  converted,  by  the  hap- 
pening of  the  event  upon  which  they  are  limited,  into  actual 
vested  estates,  may  then  be  appraised  and  taxed  under  the 
provisions  of  section  13.  It  is  true  that  section  4  seems  to 
contemplate  that  all  taxes  are  ascertainable  at  the  death  of  the 
decedent,  since  it  declares  that  'they  shall  be  due  and  payable' 
at  that  time,  and  provides  for  charging  interest  thereon  from 
'the  time  the  tax  accrued.'  We  think  the  implication  from 
this  section  ought  not  to  overbear  the  intention  of  the  legisla- 
ture indicated  in  section  one,  to  subject  all  interests  derived 
under  wills  to  taxation,  except  those  within  the  exception, 
nor  prevent  such  a  construction  of  section  13  as  will  bring  the 
present  case  within  its  purview." 

Vide  §§  222  and  230;  Matter  of  Langdon,  153  N.  Y.  6-9;  Matter  of 
Embury,  19  App.  Div.  214-216,  affirmed,  without  opinion,  154  N.  Y. 
746;  Matter  of  Vanderbilt,  172  N.  Y.  69-71;  Beers  v.  Glynn,  211  U.  S. 
477-483;  Matter  of  Harbeck,  161  N.  Y.  211-218;  Matter  of  Vanderbilt, 
50  App.  Div.  246-251;  affirmed,  on  opinion  below,  163  N.  Y.  597;  Matter  of 
Swift,  137  N.  Y.  77-83;  Matter  of  Ullman,  137  N.  Y.  403-408;  Matter  of 
Curtis,  142  N.  Y.  219-223;  Matter  of  Hitching,  43  Misc.  485-493,  affirmed, 
without  opinion,  181  N.  Y.  553. 

1  Vide  cases  cited  sub  Interest,  post,  page  721. 


1893. 

MATTER  OF  EDWARD  D.  G.  PRIME,  136  N.  Y.  347. 

Testator  died  a  resident  April  7,  1891,  and  no  appraisement 
was  made  and  no  tax  was  assessed  or  fixed  until  October  12, 
1891,  but  on  the  previous  April  20,  1891,  the  act  of  1891  was 
passed,  by  which  act  the  first  section  of  the  before  existing  act 
(the  only  section  imposing  a  tax)  was  "amended  to  read  as 
follows."  Appellants  claim,  that  the  amendment  was  a  repeal 


176  THE   COURT   OF   APPEALS   DECISIONS 

of  the  old  first  section  of  the  law,  and  the  enactment  of  a  new 
section  in  its  place,  not  retroactive,  and  hence,  that  in  October, 
1891,  when  the  appraisement  was  made  and  the  tax  was  fixed 
and  assessed  by  the  surrogate,  there  was  no  law  in  existence 
which  authorized  a  tax  on  a  legacy  which  passed  upon  a  death 
which  occurred  April  7,  1891. 

By  his  will  testator  gave  certain  legacies  to  two  foreign  cor- 
porations, the  Presbyterian  Board  of  Relief  and  the  American 
Board  of  Commissions  of  Foreign  Missions.  The  court  say, 
page  355:  "The  conclusion  we  have  reached  makes  it  unneces- 
sary to  consider  the  point  whether,  if  the  act  of  1891  repealed 
the  first  section  of  the  act  of  1887,  the  repeal  operated  to  pre- 
vent the  subsequent  assessment  and  collection  of  a  tax  on  the 
estate  of  decedents  who  died  intermediate  the  act  of  1887  and 
the  act  of  1891.  The  more  interesting  question,  and  the  one 
of  greater  importance  from  the  larger  interests  involved  in  its 
determination,  arises  on  the  appeal  of  the  charitable  corpora- 
tions. *  *  *  (Page  362.)  It  is  the  policy  of  society  to 
encourage  benevolence  and  charity  but  it  is  not  the  proper 
function  of  a  state  to  go  outside  of  its  own  limits  and  devote  its 
resources  to  support  the  cause  of  religion,  education  or  missions 
for  the  benefit  of  mankind  at  large.  The  argument  may  have 
force,  that  the  state  might,  consistently  with  its  proper  func- 
tion, give  immunity  from  taxation  to  some  of  the  foreign  cor- 
porations engaged  in  the  work  of  education  or  charity.  But 
however  this  may  be,  we  are  convinced  that  the  statute  of  1891 
has  no  application  to  foreign  corporations,  and  having  reached 
that  conclusion,  our  duty  is  ended." 

Chapter  732,  Laws  of  1911,  in  effect  July  21,  1911,  amended  §  221  by 
doing  away  with  the  distinction  between  domestic  and  foreign  corporations; 
vide  §  221. 

Matter  of  Swift,  137  N.  Y.  77-88;  Matter  of  Ullmann,  137  N.  Y.  403-408; 
Matter  of  Merriam,  141  N.  Y.  479-484,  sustained  in  163  U.  S.  625,  sub 
nom.  United  States  v.  Perkins;  Matter  of  Balleis,  144  N.  Y.  132-133; 
Matter  of  Althause,  63  App.  Div.  252-256,  affirmed,  without  opinion, 
168  N.  Y.  670;  Matter  of  Wolfe,  23  Misc.  439.  Matter  of  Crittenton, 
N.  Y.  Law  Journal,  April  5,  1911,  in  which  it  was  held  that  a  corporation 
created  by  Congress  was  a  foreign  corporation  within  the  meaning  of  §  221 
prior  to  1911  Amendment. 

Matter  of  McCartin,  N.  Y.  Law  Journal,  December  5,  1913,  opinion 
quoted  post,  page  608. 


136  N.  Y.  649  177 

1892. 

MATTER  OF  CHARLES  H.  BUTLER,  136  N.  Y.  649,  affirms, 
without  opinion,  58  Hun,  400. 

Testator  died  September,  1889.  He  bequeathed  to  an  adopted 
son  a  legacy  of  the  value  of  $50,000,  and  the  surrogate  held 
the  transfer  taxable.  The  statute  in  force  at  death  of  testator 
provided,  inter  alia:  "  After  the  passage  of  this  act  all  property 
which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  *  *  *  other  than  to  or  for  the  use  of 
his  or  her  father,  mother,  husband,  wife,  child,  brother,  sis- 
ter, *  *  *  or  any  child  or  children  adopted  as  such  in 
conformity  with  the  laws  of  the  state  of  New  York,  or  any 
person  to  whom  the  deceased  for  not  less  than  ten  years  prior 
to  his  or  her  death  stood  in  the  mutually  acknowledged  rela- 
tion of  a  parent  *  *  *  shall  be  and  is  subject  to  a  tax  of 
five  dollars  on  every  hundred  dollars  of  the  clear  market-value 
of  such  property." 

The  court  say,  page  402:  "The  section  is  somewhat  awk- 
wardly constructed,  but  the  intention  of  the  legislature  to 
exempt  adopted  children  from  the  operation  of  the  law  is 
plainly  manifested.  *  *  *  /  The  statute  does  not  require 
the  proceedings  for  adoption  to  be  under  the  laws  of  this  state 
or  within  this  state,  but  to  be  in  conformity  with  them,  to  be 
like  them  and  to  correspond  in  character  and  manner  with 
them,  wherever  they  are  conducted;  and  an  examination  of 
the  proceedings  in  Boston  for  the  adoption  of  this  child  shows 
that  they  conform  substantially  to  the  requirements  of  our 
statute.  There  is  no  reason  for  a  severe  construction  of  this 
statute.  This  boy  was  legally  adopted  under  laws  substan- 
tially similar  to  our  own,  so  far  as  the  mode  of  procedure  is 
concerned,  and  that  is  sufficient  to  answer  the  requirements 
of  this  law.  Moreover,  the  deceased  stood  in  the  mutually 
acknowledged  relation  of  a  parent  to  this  appellant  for  eleven 
years  and  a  half  prior  to  his  death.  No  evidence  of  adoption 
is  required  by  this  portion  of  the  statute,  but  mutual  acknowl- 
edgment, and  that  is  proven  in  this  case  by  all  the  facts  and 
circumstances  which  cluster  round  these  parties  from  the  com- 
mencement of  their  relation  to  the  death  of  the  testator." 

Held,  that  legacy  was  not  subject  to  tax. 

Vide  subdivision  1,  §  221a;  Matter  of  Miller,  110  N.  Y.  216;  Matter  of 
Cook,  187  N.  Y.  253-261;  Matter  of  Duryea,  128  App.  Div.  205;  Domestic 

12 


178  THE    COURT   OF   APPEALS   DECISIONS 

Relations  Law,  §  114.     As  to  burden  of  proof  vide  Matter  of  Fisch,  34 
Misc.  146. 

Chapter  215,  Laws  of  1891,  in  effect  April  20,  1891,  first  taxed  transfers 
of  personal  property  to  persons  of  1%  class  and  transfers  of  real  property 
to  such  persons  were  first  taxed  March  16, 1903,  chapter  41,  Laws  of  1903. 


1893. 

MATTER  OF  JAMES  T.  SWIFT,  137  N.  Y.  77. 

Testator  died  a  resident  July,  1890.  At  the  time  of  his  death, 
the  testator's  estate  included  certain  real  estate  and  tangible 
personal  property  in  chattels,  situated  within  the  state  of  New 
Jersey.  The  law  in  force  at  the  time  of  the  decease  of  the 
testator  is  contained  in  chapter  713  of  the  Laws  of  1887. 

The  court  say,  page  82:  "The  language  of  the  act  has  been 
justly  condemned,  for  being  involved  and  difficult  to  read 
clearly.  *  *  *  (Page  84.)  What  has  the  state  done,  in 
effect,  by  the  enactment  of  this  tax  law?  It  reaches  out  and 
appropriates  for  its  use  a  portion  of  the  property  at  the  moment 
of  its  owner's  decease;  allowing  only  the  balance  to  pass  in 
the  way  directed  by  testator,  or  permitted  by  its  intestate 
law."  Held,  that  the  transfer  of  real  estate  situated  out  of 
this  state  is  not  taxable,  but  that  the  transfer  of  personal  prop- 
erty of  a  resident  decedent,  wheresoever  situated,  whether 
within  or  without  the  state,  is  subject  to  the  tax.1  The 
court  saying  as  to  the  real  estate,  page  86:  "Nor  is  the  argu- 
ment available  that,  by  the  power  of  sale  conferred  upon  the 
executors,  there  was  an  equitable  conversion  worked  of  the 
lands  in  New  Jersey,  as  of  the  time  of  the  testator's  death, 
and,  hence,  that  the  property  sought  to  be  reached  by  the 
tax,  in  the  eye  of  the  law,  existed  as  cash  in  this  state  in  the 
executor's  hands,  at  the  moment  of  the  testator's  death." 

The  court  also  say,  page  87:  "Another  question,  which  I 
shall  merely  advert  to  in  conclusion,  arises  upon  a  ruling  of  the 
surrogate  with  respect  to  appraisement,  in  connection  with  a 
clause  of  the  will  directing  that  the  amount  of  the  tax  upon 
the  legacies  and  devises  should  be  paid  as  an  expense  of  adminis- 
tration. The  appraiser,  in  ascertaining  the  value  of  the  residu- 
ary estate  for  the  purpose  of  taxation,  deducted  the  amount 
of  the  tax  to  be  assessed  on  prior  legacies.  The  surrogate 
overruled  him  in  this,  and  held  that  there  should  be  no  deduc- 
tion from  the  value  of  the  residuary  estate  of  the  amount  of 


137  N.  Y.  205  179 

the  tax  to  be  assessed,  either  upon  prior  legacies,  or  upon  its 
value.  He  held  that  the  legacies  taxable  should  be  reported, 
irrespective  of  the  provision  of  the  will;  and  that  a  mode  of 
payment  of  the  succession  tax  prescribed  by  will  is  something 
with  which  the  statute  is  not  concerned.  I  am  satisfied  with 
his  reasoning  and  can  add  nothing  to  its  force.  Manifestly, 
under  the  law  that  which  is  to  be  reported  by  the  appraiser  for 
the  purpose  of  the  tax  is  the  value  of  the  interest  passing  to 
the  legatee  under  the  will,  without  any  deduction  for  any  pur- 
pose, or  under  any  testamentary  direction."  2 

Matter  of  Ullman,  137  N.  Y.  403-408;  Matter  of  Seaman,  147  N.  Y. 
69-75;  Matter  of  Sherman,  153  N.  Y.  1-6;  United  States  ».  Perkins,  163 
U.  S.  625-629;  Matter  of  Hull,  111  App.  Div.  322-325,  affirmed,  without 
opinion,  186  N.  Y.  586;  Matter  of  Ramsdill,  190  N.  Y.  492-495;  Matter  of 
Smith,  150  App.  Div.  805-807;  Matter  of  Curtis,  142  N.  Y.  219-223;  Matter 
of  Hoffman,  143  N.  Y.  327-330;  Matter  of  James,  144  N.  Y.  6-12;  Matter 
of  Harbeck,  161  N.  Y.  211-218;  Matter  of  Pell,  171  N.  Y.  48-53;  Matter  of 
Webber,  151  App.  Div.  539-540;  Matter  of  Kissel,  65  Misc.  443-444, 
affirmed,  without  opinion,  142  App.  Div.  934;  Matter  of  Baker,  67  Misc. 
360-362;  Matter  of  Dwight,  N.  Y.  Law  Journal,  October  8,  1911,  affirmed, 
without  opinion,  149  App.  Div.  912. 

1  Tangible  property  without  the  state  not  subject  to  tax  since  amendment 
by  chapter  732,  Laws  of  1911,  hi  effect  July  21,  1911,  §§  220  and  243. 
Vide  State  Comptroller's  opinion,  dated  May  13,  1913, 2  State  Department 
Reports,  501,  opinion  quoted,  page  119. 

2  Matter  of  Gihon,  169  N.  Y.  443-447;  Matter  of  Kennedy,  20  Misc. 
531;  Matter  of  Purdy,  24  Misc.  301-302, 


1893. 

MATTER  OF  CATHARINE  L.  WOLFE,  137  N.  Y.  205. 

Testatrix  died  in  April,  1887.  She  bequeathed  legacies  to 
Grace  Church  of  the  City  of  New  York  and  Metropolitan 
Museum  of  Art.  The  court  say,  page  209:  "In  June,  1887, 
her  executors  applied  to  the  surrogate  of  New  York  county 
for  the  appointment  of  an  appraiser,  under  the  provisions  of 
chapter  483  of  the  Laws  of  1885,  known  as  the  Collateral  In- 
heritance Tax  Act,  in  order  to  ascertain  the  amount  of  the 
tax  upon  her  various  legacies.  Such  an  appointment  was 
made,  and,  upon  the  coming  in  of  his  report  appraising  the 
value  of  the  decedent's  property,  the  surrogate  made  an  order 
confirming  the  report  and  assessing  the  tax  upon  various  lega- 
cies; but  he  reserved  the  question  of  the  liability  to  taxation 
of  property  of  the  estate  disposed  of  in  certain  clauses,  which 


180  THE   COURT   OF  APPEALS   DECISIONS 

included  these  bequests,  for  further  consideration  and  fixed  a 
future  day  for  hearing  thereupon.  Copies  of  the  appraiser's 
report  and  of  the  surrogate's  order  were  thereafter  served  upon 
the  comptroller  of  the  city.  Upon  the  return  day,  fixed  by 
the  order  for  the  hearing  upon  the  question  reserved,  neither 
the  comptroller  nor  the  district  attorney  appeared  and  there- 
after and  on  October  the  29th,  1887,  the  surrogate  made  a  de- 
cree reciting  the  proceedings  had,  etc.,  and  adjudging,  among 
other  things,  that  the  legacies  in  question  here  were  exempt 
from  taxation  under  the  act.  On  May  the  31st,  1888,  the 
executors,  relying  upon  said  decree,  paid  over  the  legacies  in 
full  to  the  respective  legatees.  On  October  the  15th,  1890, 
and  possibly,  if  not  probably,  moved  thereto  by  our  decisions 
in  Catlin's  case  (113  N.  Y.  134)  and  in  Matter  of  Van  Kleeck, 
(121  N.  Y.  701),  the  district  attorney  of  New  York,  by  direction 
of  the  comptroller,  filed  his  petition  and  instituted  the  present 
proceeding  for  the  assessment  and  collection  of  a  tax  under  the 
act.  The  legatees  and  appellants  here  pleaded  the  previous 
decision  and  decree  of  the  surrogate  as  an  adjudication  of 
the  matter  and  their  payment  of  the  legacies  under  the  decree 
which  had  remained  unappealed  from  and  was  in  full  force." 

Held,  that  the  surrogate  being  vested  with  the  duty  and 
authority  to  assess  and  fix  the  tax,  a  prior  determination  of 
that  question  is  conclusive  upon  the  comptroller  and  district 
attorney,  and  leaves  no  scope  for  the  operation  of  sections  16 
and  17  of  the  1885  Act,  except  in  the  case  of  a  refusal  or  a  neglect 
to  pay  the  tax  which  is  due. 

The  court  say,  page  214:  "In  the  present  case,  the  surrogate's 
decree  of  October,  1887,  was  an  adjudication  upon  the  liability 
of  these  legacies  to  taxation,  which  was  final,  and  was  a  com- 
plete bar  to  the  maintenance  of  any  subsequent  proceeding 
by  the  district  attorney  to  collect  a  tax."  The  court  also 
say,  page  213:  "  The  doctrine  of  notice  is  one  which  finds  appli- 
cation when  it  is  sought  to  tax  the  property  of  the  citizen. 
When  he  is  to  be  assessed  it  is  essential  that  he  shall  be  given 
an  opportunity  to  be  heard,  to  establish  a  demand  against 
him." 

Vide  §§221  and  235;  Matter  of  Ullman,  137  N.  Y.  403-407;  Amherst 
College  v.  Ritch,  151  N.  Y.  282-343;  Weston  t;.  Goodrich,  86  Hun,  194- 
200;  Matter  of  O'Donohue,  44  App.  Div.  186;  Matter  of  David  Kennedy, 
113  App.  Div.  4-6;  Matter  of  Lansing,  31  Misc.  148-154;  Matter  of  Daly, 
34  Misc.  148-151. 


140  N.  Y.  377  181 

Statute,  §§  230  and  231,  now  requires  that  notice  must  be  given  to  State 
Comptroller. 

As  to  exemptions  vide  Matter  of  Mergentime,  129  App.  Div.  367, 
affirmed,  on  opinion  below,  195  N.  Y.  572;  Matter  of  McCormick,  206  N."  Y. 
100-104. 


1893. 

MATTER  OF  AMELIA  G.  ULLMANN,  137  N.  Y.  403. 

Testator  died  in  1890.  The  court  say,  page  407:  "Every 
officer  charged  with  the  duty  of  executing  the  taxing  power, 
whether  it  be  a  surrogate  or  a  town  assessor,  must  necessarily 
decide,  in  a  judicial  capacity,  important  questions  of  law  in 
order  to  perform  the  duties  of  his  office.  Ordinarily  such  de- 
cisions do  not,  like  judgments  in  actions,  conclude  the  parties 
as  to  the  same  question  hi  subsequent  proceedings  instituted 
for  some  other  purpose,  although  in  all  such  proceedings  for 
the  assessment  of  the  tax  it  ought  to  and  doubtless  would  until 
reversed  or  set  aside. 

"The  surrogate  must  decide  whether  any  property  of  a  de- 
ceased person  has  passed  to  another  under  a  will  or  under 
the  laws  of  intestacy  before  he  can  perform  the  duty  imposed 
upon  him.  It  may  sometimes  happen  that  the  property  of 
the  deceased  passes  in  both  ways.  The  fact  that  there  is  a  will, 
and  that  it  has  been  admitted  to  probate,  does  not  necessarily 
determine  the  ownership  or  the  transmission  of  the  property." 

Held,  page  408,  "that  the  jurisdiction  conferred  by  the 
statute  upon  the  surrogate  to  hear  and  decide  all  questions  in  re- 
lation to  the  tax  imposed  by  its  provisions  upon  persons 
to  whom  property  has  passed  from  a  decedent  is,  we  think, 
broad  enough  to  warrant  the  surrogate  in  holding,  in  a  case 
like  this,  that  the  property  which  is  the  subject  of  the  tax 
has  not  passed  to  the  legatees  or  devisees  under  the  will,  but 
to  the  heirs  at  law  or  next  of  kin." 

Vide  §  228;  Weston  v.  Goodrich,  86  Hun,  194-201;  Amherst  College  t>. 
Ritch,  151  N.  Y.  282-343;  Matter  of  Smith,  80  Misc.  140-143. 


1893. 

MATTER  OF  JOHN  KNOEDLER,  140  N.  Y.  377. 

Testator  died  January  8,  1891.  The  court  say,  page  378: 
"The  appellants  object  to  the  assessment  of  a  tax  under  the 
collateral  inheritance  law  upon  that  part  of  the  estate  of  the 


182  THE    COURT  OF   APPEALS   DECISIONS 

testator,  amounting  to  $65,000  and  upwards,  which  is  the  pro- 
ceeds of  four  life  insurance  policies,  held  by  him  at  the  time 
of  his  death.  *  *  *  Three  of  the  policies  were  payable  to 
the  testator,  his  executors,  administrators  and  assigns,  and  the 
fourth  was  a  paid-up  policy,  payable  to  his  legal  representa- 
tives. *  *  * 

(Page  380.)  "The  argument  is  made  that  it  is  only  property 
which  is  liable  to  taxation  under  the  general  tax  law  of  the 
state  which  can  be  taxed  under  the  act  relating  to  taxable 
transfers,  and  that,  inasmuch  as  life  insurance  policies  cannot 
be  included  in  the  valuation  of  a  taxpayer's  property  under 
the  general  law,  they  cannot  be  considered  in  assessing  a  tax 
under  the  collateral  inheritance  law.  The  main  premise  upon 
which  this  proposition  rests  is  manifestly  inadmissible.  The 
taxable  transfer  law  has  no  reference  or  relation  to  the  general 
law.  The  two  acts  are  not  in  pan  materia.1  While  the  object 
of  both  is  to  raise  revenue  for  the  support  of  the  government, 
they  have  nothing  else  in  common.  Nearly  sixty  years  inter- 
vened between  the  passage  of  the  earlier  and  the  later  statute, 
and  the  latter  was  enacted  under  different  conditions  from  the 
former.  It  proceeds  upon  a  new  theory  of  the  right  of  the  gov- 
ernment to  tax  and  establishes  a  new  system  of  taxation. 
It  taxes  the  right  of  succession  to  property,  and  measures  the 
tax  in  the  method  specifically  prescribed.  All  property  having 
an  appraisable  value  must  be  considered,  whether  it  is  such 
as  might  be  taxed  under  the  general  law  or  not.  Many  kinds 
of  property  might  be  enumerated  which  are  not  assessable  under 
the  general  law,  but  which  are  appraisable  under  the  collateral 
inheritance  act.  The  definition  of  the  different  kinds  of  prop- 
erty which  the  legislature  has  incorporated  in  the  general  tax 
law,  for  the  purposes  of  that  law,  cannot  be  imported  into  the 
collateral  inheritance  tax  law  upon  any  sound  principle  of 
statutory  construction.  It  is,  therefore,  immaterial  whether 
life  insurance  policies  can  be  valued  and  assessed  for  taxation 
under  the  general  law." 

Held,  that  the  amount  of  the  policies  was  taxable. 

As  to  life  insurance  in  New  York  Company  on  life  of  non-resident,  Matter 
of  Gordon,  186  N.  Y.  471;  Matter  of  Rhoads,  190  N.  Y.  525. 

As  to  resident  vide  Matter  of  Parsons,  117  App.  Div.  321;  Matter  of 
Fay,  25  Misc.  468;  Matter  of  Elting,  78  Misc.  692. 

1  Matter  of  Althause,  63  App.  Div.  252-254,  affirmed,  without  opinion, 
168  N.  Y.  670;  Matter  of  Hellman,  174  N.  Y.  254-257. 


141   N.   Y.  479  183 

1894. 

MATTER  OF  WILLIAM  W.  MERRIAM,  141  N.  Y.  479,  sus- 
tained in  163  U.  S.  625,  sub  nom.  United  States  v.  Perkins. 

Testator  died  a  resident  January  30,  1889,  and  devised  and 
bequeathed  all  his  estate  to  the  United  States  government. 

The  United  States  Supreme  Court  say,  page  625:  "This 
case  raises  the  single  question  whether  personal  property  be- 
queathed by  will  to  the  United  States  is  subject  to  an  inherit- 
ance tax  under  the  laws  of  New  York.  *  *  *  (Page  627.) 
While  the  laws  of  all  civilized  states  recognize  in  every  citizen 
the  absolute  right  to  his  own  earnings,  and  to  the  enjoyment 
of  his  own  property,  and  the  increase  thereof,  during  his  life, 
except  so  far  as  the  state  may  require  him  to  contribute  his 
share  for  public  expenses,  the  right  to  dispose  of  his  property 
by  will  has  always  been  considered  purely  a  creature  of  statute 
and  within  legislative  control.  'By  the  common  law,  as  it 
stood  in  the  reign  of  Henry  II,  a  man's  goods  were  to  be  divided 
into  three  equal  parts;  of  which  one  went  to  his  heirs  or  lineal 
descendents,  another  to  his  wife,  and  a  third  was  at  his  own 
disposal;  or  if  he  died  without  a  wife,  he  might  then  dispose  of 
one  moiety,  and  the  other  went  to  his  children;  and  so,  e  con- 
verso  if  he  had  no  children,  the  wife  was  entitled  to  one  moiety 
and  he  might  bequeath  the  other;  but  if  he  died  without  either 
wife  or  issue,  the  whole  was  at  his  own  disposal.'  2  Bl.  Com. 
492.  Prior  to  the  Statute  of  Wills,  enacted  in  the  reign  of 
Henry  VIII,  the  right  to  a  testamentary  disposition  of  prop- 
erty did  not  extend  to  real  estate  at  all,  and  as  to  personal 
estate  was  limited  as  above  stated.  Although  these  restric- 
tions have  long  since  been  abolished  in  England,  and  never 
existed  in  this  country,  except  in  Louisiana,  the  right  of  the 
widow  to  her  dower  and  to  a  share  in  the  personal  estate  is 
ordinarily  secured  to  her  by  statute. 

"By  the  Code  Napoleon,  gifts  of  property,  whether  by  acts 
inter  vivos  or  by.  will,  must  not  exceed  one-half  the  estate  if 
the  testator  leave  but  one  child;  one-third,  if  he  leaves  two 
children;  one-fourth,  if  he  leaves  three  or  more.  If  he  have 
no  children,  but  leaves  ancestors,  both  in  the  paternal  and  ma- 
ternal line,  he  may  give  away  but  one-half  of  his  property,  and 
but  three-fourths  if  he  have  ancestors  in  but  one  line.  By  the 
law  of  Italy,  one-half  a  testator's  property  must  be  distributed 
equally  among  all  his  children;  the  other  half  he  may  leave 


184  THE    COURT   OF   APPEALS    DECISIONS 

to  his  eldest  son  or  to  whomsoever  he  pleases.  Similar  restric- 
tions upon  the  power  of  disposition  by  will  are  found  in  the 
codes  of  other  continental  countries,  as  well  as  in  the  state 
of  Louisiana.  Though  the  general  consent  of  the  most  en- 
lightened nations  has,  from  the  earliest  historical  period,  recog- 
nized a  natural  right  in  children  to  inherit  the  property  of 
their  parents,  we  know  of  no  legal  principle  to  prevent  the  legis- 
lature from  taking  away  or  limiting  the  right  of  testamentary 
disposition  or  imposing  such  conditions  upon  its  exercise  as 
it  may  deem  conducive  to  public  good. 

"In  this  view,  the  so-called  inheritance  tax  of  the  state  of 
New  York  is  in  reality  a  limitation  upon  the  power  of  a  testator 
to  bequeath  his  property  to  whom  he  pleases;  a  declaration 
that,  in  the  exercise  of  that  power,  he  shall  contribute  a  cer- 
tain percentage  to  the  public  use;  in  other  words,  that  the 
right  to  dispose  of  his  property  by  will  shall  remain,  but  sub- 
ject to  a  condition  that  the  state  has  a  right  to  impose.  Cer- 
tainly, if  it  be  true  that  the  right  of  testamentary  disposition 
is  purely  statutory,  the  state  has  a  right  to  require  a  contribu- 
tion to  the  public  treasury  before  the  bequest  shall  take  effect. 
Thus  the  tax  is  not  upon  the  property,  in  the  ordinary  sense 
of  the  term,  but  upon  the  right  to  dispose  of  it,  and  it  is  not 
until  it  has  yielded  its  contribution  to  the  state  that  it  be- 
comes the  property  of  the  legatee.  *  *  *  (Page  630.)  The 
act  in  question  is  not  open  to  the  objection  that  it  is  an  attempt 
to  tax  the  property  of  the  United  States,  since  the  tax  is  imposed 
upon  the  legacy  before  it  reaches  the  hands  of  the  government. 
The  legacy  becomes  the  property  of  the  United  States  only 
after  it  has  suffered  a  diminution  to  the  amount  of  the  tax, 
and  it  is  only  upon  this  condition  that  the  legislature  assents 
to  a  bequest  of  it." 

It  was  also  held  that  its  stocks  of  foreign  corporation  owned 
by  resident  decedent  were  subject  to  transfer  tax  (141  N.  Y. 
479^85). 

Vide  subdivision  1,  §  220  and  subdivision  2,  §  221a. 

Matter  of  James,  144  N.  Y.  6-12;  Matter  of  Cullum,  145  N.  Y.  593; 
People  ex  rd.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475-482;  Matter  of 
Smith,  150  App.  Div.  805-807. 


42  N.    Y.  219  185 

1894. 

MATTER  OF  CLARISSA  E.  CURTIS,  142  N.  Y.  219. 

Testarix  died  November  3,  1886.  The  court  say,  page  221 : 
"The  testatrix,  by  the  terms  of  her  will,  created  a  group  of 
trusts  for  the  benefit  of  her  two  daughters  and  two  named 
grandchildren,  each  trust  running  for  the  life  of  the  beneficiary; 
and  then  devised  and  bequeathed  remainders  over  to  such  of 
her  named  nephews  and  nieces  as  should  be  living  at  the  time 
of  the  successive  termination  of  each  of  such  trusts,  or  if  any 
such  beneficiaries  should  then  be  dead,  to  their  then  living 
issue.  *  *  *  The  surrogate  decreed  that  the  remainders 
were  liable  to  taxation  under  the  Collateral  Inheritance  Act 
as  it  stood  in  1885,  and  caused  the  values  to  be  appraised  and 
the  amounts  of  the  tax  to  be  fixed.  On  appeal  to  the  General 
Term  that  decree  was  reversed,  the  court  deciding  that  the 
appraisal  and  assessment  were  premature,  and  from  that  de- 
cision the  present  appeal  is  brought." 

The  court  say,  page  222:  "Until  the  end  of  the  trusts  it 
cannot  be  determined  whether  the  property  represented  by 
the  remainders  will  be  taxable  at  all:  that  is  to  say,  whether 
it  will  pass  actually  and  beneficially  to  persons  in  whose  hands 
it  will  be  taxable,  or  to  others  in  whose  possession  it  will  be 
exempt.  If,  in  the  end,  these  remainders  go  to  the  nephews 
and  nieces  a  tax  will  be  imposed,  but  if,  instead  of  passing  to 
them,  the  remainders  should  go  to  the  children  and  grand- 
children they  would  be  exempt  from  taxation.  Under  this 
will-,  however  we  may  speculate  as  to  the  technical  location 
of  the  fee  pending  the  running  of  the  trusts,  the  actual  and 
beneficial  interest  in  remainder  may  pass  wholly  to  the  two 
daughters  by  intestacy.  *  *  *  The  remainders  vested 
in  the  nephews  and  nieces  at  once  upon  the  death  of  the  tes- 
tatrix and  so  became  contingent  interests  taxable  under  the 
law.  If  that  technical  vesting  be  admitted,  what  so  passed 
was  rather  a  theoretical  possibility  than  a  tangible  reality, 
for  the  life  estate  was  in  the  trustee  of  the  daughters  carrying 
the  whole  beneficial  use;  there  was  no  power  over  it  in  the 
contingent  remainderman;  and  the  nominal  and  technical  fee 
might  never  become  a  taxable  estate.  It  was  never  intended 
by  the  law  to  tax  a  theory  having  no  real  substance  behind  it. 

(Page  223.)  "*  *  *  This  case  illustrates  one  result  of 
the  contrary  doctrine.  Walter  Racey,  a  nephew  named,  has 


186  THE    COURT   OF   APPEALS   DECISIONS 

died  without  issue.  He  never  took  anything  beneficial  under 
the  will  and  his  estate  can  take  nothing,  and  yet  it  is  assessed 
for  about  one  thousand  dollars,  which  it  is  said  will  more  than 
exhaust  all  that  he  left,  and  in  return  for  which  he  received 
actually  nothing  and  theoretically  only  an  unsubstantial  legal 
fabric.1  That  is  too  unjust  to  be  borne. 

"I  do  not  at  all  criticize  the  wisdom  of  the  law  which  imposes 
a  tax  upon  the  succession  of  collaterals  to  estates  which  usually 
they  did  not  help  to  earn  and  very  often  do  not  deserve.  On 
the  contrary,  I  deem  the  law  thoroughly  wise  and  just;  but  it 
does  not  at  all  follow  that  collaterals  should  be  taxed  upon 
property  which  they  never  received  and  upon  what  is  in  form 
but  a  theory  and  in  fact  only  an  illusion.  The  law  itself  gives 
abundant  evidence  in  its  language  of  the  intent  to  subject  only 
real  and  beneficial  interests  to  taxation,  and  nothing  in  its 
policy  justifies  the  imposition  of  such  a  burden  where  no  corre- 
sponding benefit  has  been  received.  *  *  *  It  may  possibly 
be  that  where  the  only  contingency  of  the  future  is  upon  which 
of  several  named  persons  or  classes  of  persons,  all  of  whom 
are  liable  to  suffer  the  taxation  the  beneficial  interests  will 
ultimately  devolve,  the  appraisal  and  assessment  need  not  be 
postponed,  though  even  that  is  hardly  a  prudent  construction, 
but  need  not  now  be  discussed,  yet  where  the  contingency 
touches  the  taxable  character  of  the  succession,  where  it  is 
only  in  the  chance  of  uncertain  events  that  the  beneficial  in- 
terests will  finally  alight  where  they  will  be  taxable  at  all,  a 
delay  until  the  contingency  is  solved  is  both  just  and  necessary." 

Vide  §§  222,  230  and  241;  and  discussion  of  amendments  in  Matter  of 
Burgess,  204  N.  Y.  265,  and  sub  Remainders. 

Matter  of  Seaman,  141  N.  Y.  69-75;  Matter  of  Davis,  149  N.  Y.  539- 
549;  Matter  of  Langdon,  153  N.  Y.  6-9;  Matter  of  Hitchins,  43  Misc. 
485-493,  affirmed,  without  opinion,  181  N.  Y.  553;  Matter  of  Hoffman,  143 
N.  Y.  327-334;  Matter  of  Roosevelt,  143  N.  Y.  120-124;  Matter  of  Dows, 
167  N.  Y.  227-233,  sustained  in  183  U.  S.  278,  sub  nom.  Orr  v.  Oilman; 
Matter  of  Babcock,  37  Misc.  445-448,  affirmed,  without  opinion,  81  App. 
Div.  645. 

1  Matter  of  White,  208  N.  Y.  64. 


1894. 

MATTER  OF  DANIEL  B.  FAYERWEATHER,  143  N.  Y.  114. 

Testator  died  November  15,  1890.     A  contest  arose  over 
the  probate  of  the  will.    The  application  of  the  executors  to 


143  N.  Y.   114  187 

the  surrogate  for  a  remission  of  the  penalty  imposed  by  law 
for  the  non-payment  of  the  whole  of  the  tax  within  eighteen 
months  of  the  date  of  the  death  of  the  decedent,  resulted  favor- 
ably to  the  executors,  and  the  surrogate  adjudged  that  the 
interest  to  be  charged  on  the  balance  of  the  tax  then  imposed 
should  be  at  the  rate  of  six  per  cent,  from  the  15th  of  May,  1892 
(eighteen  months  subsequent  to  the  death  of  the  decedent), 
and  the  application  of  the  comptroller  for  an  order  charging 
interest  on  that  amount  at  the  rate  of  six  per  cent,  from  the 
death  of  the  testator  (Nov.  15,  1890),  as  provided  by  chap.  399 
of  the  Laws  of  1892,  was  denied. 

The  court  say,  page  117:  "Under  the  act  of  1887  (chap. 
713),  which  was  in  force  at  the  time  of  the  death  of  the  de- 
cedent, *  *  *  it  was  provided  that  the  penalty  of  ten 
per  cent,  imposed  by  the  fourth  section  should  not  be  charged 
where  in  cases  by  reason  of  claims  made  upon  the  estate,  neces- 
sary litigation  or  other  unavoidable  cause  of  delay,  the  estate 
of  a  decedent  could  not  be  settled  at  the  end  of  the  eighteen 
months  from  the  death  of  the  decedent,  and  in  such  cases  only 
six  per  cent,  per  annum  should  be  charged  from  the  expiration 
of  the  eighteen  months  until  the  cause  of  delay  should  be  re- 
moved. At  the  time,  therefore,  when  the  tax  upon  this  estate 
accrued  or  became  due,  viz.,  upon  the  death  of  the  decedent 
the  law  gave  the  executors  of  his  will  eighteen  months  in  which 
to  pay  the  tax  without  the  addition  of  any  interest  whatever, 
and  ten  per  cent,  interest  from  the  time  this  tax  accrued  was 
imposed  as  a  penalty  for  non-payment  unless  it  was  excused  un- 
der the  provisions  of  section  5  above  quoted,  and  in  that  case 
interest  only  at  the  rate  of  six  per  cent,  from  the  expiration  of 
the  eighteen  months,  until  the  cause  of  delay  was  removed,  was 
imposed.  *  *  *  While  the  law  was  in  this  condition  the 
legislature  on  the  first  day  of  May,  1892,  passed  the  act,  chapter 
399  of  the  laws  of  that  year.  The  statute  repealed  the  prior 
acts  upon  the  subject  of  taxation  of  collateral  inheritances  and 
itself  made  full  provision  therefor.  It  altered  the  fifth  section 
of  the  act  of  1887,  above  alluded  to,  by  providing  that  if  the 
penalty  of  ten  per  cent,  interest  on  overdue  taxes  was  not 
charged,  then  interest  at  the  rate  of  six  per  cent,  per  annum 
should  be  charged  from  the  date  of  the  decedent's  death.  The 
reasons  for  not  charging  the  penalty  of  ten  per  cent,  were  left 
the  same  in  the  new  as  in  the  old  statute.  Section  24  of  the 
new  or  repealing  act  contained  a  saving  clause  providing  that 


188  THE    COURT   OF   APPEALS   DECISIONS 

the  repealing  clause  should  '  not  affect  or  impair  any  act  done 
or  right  accruing,  accrued  or  acquired,  or  liability,  penalty, 
forfeiture  or  punishment  incurred  prior  to  May  1,  1892,  under 
or  by  virtue  of  any  law  so  repealed.'  It  will  be  seen  that  the 
repealing  act  was  passed  a  few  days  before  the  expiration  of 
eighteen  months  subsequent  to  the  death  of  the  decedent." 

Held,  page  119:  "If  there  were  a  doubt  upon  the  question 
it  should  be  resolved  in  favor  of  the  taxpayer  as  represented 
by  the  executors  and  against  the  taxing  power;  and  that  the 
order  of  the  surrogate  should  be  affirmed." 

Vide  §  223,  and  cases  cited  sub  Interest. 

Vide  Amherst  College  v.  Ritch,  151  N.  Y.  282-342;  Matter  of  Cooley, 
186  N.  Y.  220-227;  Matter  of  Mergentine,  129  App.  Div.  367-374,  affirmed, 
on  opinion  below,  195  N.  Y.  572;  Matter  of  de  Peyster,  N.  Y.  Law  Journal, 
January  21,  1913,  affirmed,  without  opinion,  156  App.  Div.  938. 


1894. 

MATTER  OF  CORNELIUS  V.  S.  ROOSEVELT,  143  N.  Y. 
120. 

Testator  died  September  30,  1887.  After  certain  specific 
legacies  to  his  wife,  the  testator  disposed  of  his  residuary  es- 
tate as  follows:  The  entire  amount  to  be  held  by  the  executor 
and  the  executrix  in  trust,  to  pay  the  income  thereof  to  his 
wife  during  her  life;  at  her  death  seven  life  annuities  are  given. 
On  the  decease  of  the  wife,  the  estate  is  given,  subject  to  the 
payment  of  the  annuities,  to  twelve  nephews  and  nieces. 

The  court  say,  page  122:  "Two  questions  are  presented  for 
our  determination,  viz.:  First,  are  the  annuities  created  by  the 
will  such  property,  in  a  legal  sense,  as  to  be  presently  taxable, 
and  can  their  fair  and  clear  market  value  at  the  time  of  the 
death  of  the  testator  be  ascertained;  second,  is  the  fair  and 
clear  market  value  at  the  time  of  testator's  death,  of  the  estates 
in  remainder  ascertainable,  and  is  the  tax  thereon  due  at 
once?  *  *  *  It  is  not  to  be  assumed  that  the  legislature  in- 
tended to  compel  the  citizen  to  pay  a  tax  upon  an  interest  he 
may  never  receive,  and  the  reasonable  construction  of  this  stat- 
ute leads  to  no  such  unjust  result.  It  does  not  follow  because 
the  legislature  taxes  persons  beneficially  entitled  to  property  or 
income,  in  possession  or  expectancy,  that  a  tax  was  thereby 
imposed  upon  an  interest  that  may  never  vest;  until  that 
time  arrives  the  power  to  tax  does  not  exist.  The  testator 


'143  N.  Y.  327  189 

has  created  seven  life  annuities,  if  the  annuitants  survive  his 
wife,  and  there  can  be  no  vested  interest  in  any  of  them  until 
the  happening  of  that  event.  All  may  survive — a  portion 
may  be  living — everyone  may  be  dead.  To  hold  such  a  possibil- 
ity presently  taxable,  and  its  value  capable  of  immediate  com- 
putation, shocks  the  sense  of  justice.  *  *  *  (Page  124.) 
The  legislature,  in  the  act  of  1892,  has  given  a  practical  con- 
struction to  its  previous  legislation  on  this  subject  when  it 
provides  that  where  the  fair  market  value  of  the  property 
or  interest  cannot  be  ascertained  at  the  time  of  the  transfer, 
the  tax  shall  become  due  and  payable  when  the  beneficiary 
shall  come  into  actual  possession  or  enjoyment.  (Chapter  399, 
Laws  of  1892,  section  3.)" 

Held,  that  the  case  must  be  decided  under  the  Laws  of  1887 
in  force  at  the  time  of  testator's  death,  and  that  neither  the 
annuities  nor  the  remainders  were  presently  taxable. 

Vide  Matter  of  Vanderbilt,  172  N.  Y.  69-77;  Matter  of  Brez,  172  N.  Y. 
609;  and  §§  222,  230  and  241;  Matter  of  Westurn,  152  N.  Y.  93-100;  Matter 
of  Dows,  167  N.  Y.  227-234;  Matter  of  Hoffman,  143  N.  Y.  327-334; 
Matter  of  Pell,  171  N.  Y.  48-54;  Matter  of  Meyer,  83  App.  Div.  381-384; 
Matter  of  Tracy,  179  N.  Y.  501-508;  Matter  of  Babcock,  37  Misc.  445-448, 
affirmed,  without  opinion,  81  App.  Div.  645;  Matter  of  Eldridge,  29  Misc. 
734-738;  Matter  of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion 
quoted  sub  Power  of  Appointment,  page  772. 


1894. 

MATTER  OF  ELLA  S.  HOFFMAN,  143  N.  Y.  327. 

Testatrix  died  November  7,  1892. 

Held,  that  Laws  of  1892,  chapter  399,  changed  the  former 
rule,  and  that  the  interest  of  the  mother  of  decedent  in  a  legacy 
was  taxable  at  one  per  cent,  (page  333),  "although  itself  of  a 
value  of  less  than  ten  thousand  dollars,  because  the  aggregate 
transfers  by  the  will  to  taxable  persons  exceeded  that  amount." 

Vide  §  221a;  Matter  of  Westurn,  152  N.  Y.  93-99;  Matter  of  Corbett, 
171  N.  Y.  516;  Matter  of  Costello,  189  N.  Y.  288-292;  Matter  of  Jourdan, 
70  Misc.  159,  affirmed,  on  dissenting  opinion  of  Jenks,  J.  (151  App.  Div. 
8-11),  in  206  N.  Y.  653;  Matter  of  Schwarz,  209  N.  Y.  mem. 

Matter  of  Pullman,  46  App.  Div.  574-578;  Matter  of  Pell,  171  N.  Y. 
48-54;  Matter  of  Garland,  88  App.  Div.  380;  Matter  of  Babcock,  37  Misc. 
445-448,  affirmed,  without  opinion,  81  App.  Div.  645;  Matter  of  Mc- 
Murray,  96  App.  Div.  128-130;  Matter  of  Fisher,  96  App.  Div.  133;  Mat- 
ter of  Birdsall,  22  Misc.  180-181,  affirmed,  without  opinion,  43  App.  Div. 
624;  Matter  of  De  Graaf,  24  Misc.  147-150;  Kitching  v.  Shear,  26  Misc.  436- 
438;  Matter  of  Hallock,  42  Misc.  473;  Matter  of  Mason,  69  Misc.  280-285. 


190  THE    COURT   OF   APPEALS   DECISIONS 

1894. 

MATTER  OF  JOHN  A.  PHIPPS,  143  N.  Y.  641,  affirms  on 
opinion  below,  77  Hun,  325. 

Elizabeth  Fogg,  a  resident  of  this  state,  died  on  the  3d  day 
of  January,  1891,  leaving  a  last  will  and  testament,  which  was 
admitted  to  probate  on  the  15th  of  April,  1891.  By  her  will 
she  gave  and  devised  all  of  her  residuary  estate,  some  of  which 
consisted  of  real  estate,  but  where  situated  does  not  appear, 
equally  to  Hiram  Fogg,  of  Bangor,  Maine,  and  John  A.  Phipps, 
of  Boston,  Mass.  In  January,  1892,  Phipps  died  at  said  Boston, 
leaving  a  will  which  on  February  1,  1892,  was  duly  admitted 
to  probate  in  the  county  of  Suffolk,  Mass.,  the  domicile  of 
the  decedent  at  the  time  of  his  death.  The  legacy  to  Phipps 
was  never  paid  to  him,  nor  was  it  in  a  condition  to  be  paid,  he 
having  died  while  Mrs.  Fogg's  estate  was  unsettled.  This 
proceeding  was  instituted  for  the  purpose  of  having  it  deter- 
mined what  amount  of  inheritance  tax,  if  any,  he  was  liable 
to  pay  upon  the  legacy  bequeathed  by  Mrs.  Fogg  to  his  testa- 
tor Phipps. 

The  question  involved  upon  this  appeal  depends  upon  the 
construction  to  be  given  to  section  1  of  chapter  483  of  the  Laws 
of  1885  as  amended  by  chapter  713  of  the  Laws  of  1887,  as 
amended  by  chapter  215  of  the  Laws  of  1891,  the  last  named 
statute  being  the  one  which  was  in  operation  at  the  time  of 
the  death  of  the  testator,  Phipps.  The  provisions  of  this  act, 
as  far  as  they  are  necessary  to  be  considered  in  the  disposition 
of  this  appeal,  are  as  follows:  "After  the  passage  of  this  act, 
all  property  which  shall  pass  by  will  or  by  the  intestate  laws 
of  this  state  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  or  if  the  decedent 
was  not  a  resident  of  this  state  at  the  time  of  his  death,  which 
property  or  any  part  thereof  shall  be  within  this  state  *  *  * 
shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter  specified." 

The  court  say,  page  327:  "It  is  a  familar  principle  that  the 
situs  of  personal  property  is  presumptively  the  domicile  of  its 
owner,  and  its  disposition  is  controlled  by  the  laws  of  such 
domicile.  But  for  certain  purposes  of  taxation  a  different  rule 
has  obtained  because  of  statutes  passed  to  prevent  non-residents 
having  the  protection  of  our  laws  for  their  property  which 
is  invested  and  kept  within  this  state  without  contributing 
to  the  expense  of  such  protection.  And  it  is  in  the  same 


143  N.  Y.  641  191 

line  of  legislation  that  the  statute  of  1891  has  been  passed; 
and  consequently  where  a  resident  of  another  state  dies  the 
owner  of  personal  property  which  he  has  habitually  kept  and 
invested  in  this  state,  it  is  liable  to  taxation.  But  it  has  not 
yet  been  determined  that  if  a  resident  of  another  state  dies, 
having  debts  due  him  by  residents  of  this  state,  that  those 
debts  are  the  subject  of  taxation  as  being  the  property  of  the 
decedent  within  this  state.1  That  such  property  is  not  the 
subject  upon  which  the  act  hi  question  was  intended  to  operate 
seems  to  have  been  intimated  in  the  case  of  Swift  (137  N.  Y. 
77),  where  the  property  the  subject  of  taxation  is  likened  to 
realty,  being  tangible  and  located  within  the  limits  of  the 
state,  as  was  the  fact  hi  reference  to  the  estate  of  Romaine, 
127  N.  Y.  80.  But  a  mere  chose  in  action,  a  right  to  recover 
a  sum  of  money,  has  never,  as  yet,  been  given  the  attribute 
of  tangibility,  and  this  seems  to  be  all  that  Phipps  had  at  the 
time  of  his  death.  He  had  a  right  to  claim  the  amount  of  money 
which  his  share  of  the  residuary  estate  of  Mrs.  Fogg  would 
result  in,  nothing  more;  no  particular  piece  of  property,  no 
particular  sum  of  money,  no  particular  representatives  of 
money  or  property.  And  until  this  residuary  estate  was  ascer- 
tained by  an  accounting  of  the  executors,  the  legatee  might 
not  be  even  able  to  maintain  an  action  for  its  recovery.  It 
would  appear,  therefore,  that  a  tax  in  this  proceeding  has  been 
levied  upon  a  legacy  which  not  only  had  never  been  realized, 
but  the  right  to  the  possession  of  which  had  never  accrued. 
And  if,  as  intimated  in  the  Matter  of  Romaine,  it  was  not  the 
intention  to  attempt  to  levy  a  tax  upon  property,  except  such 
as  the  owner  at  the  time  of  his  death  voluntarily  permitted  to 
remain  in  the  state,  how  can  such  a  tax  be  levied  upon  property 
which  the  decedent  has  never  had  it  in  his  power  to  remove,  if 
this  unrealized  legacy  can  be  called  property  within  this  state? 
In  other  words,  can  this  act  be  construed  to  cover  a  right  at 
some  future  time  to  receive  a  sum  of  money,  or  to  recover  a 
debt? 

"We  think,  clearly,  it  cannot,  and  that  all  that  it  was  intended 
to  cover  was  tangible  property  kept  within  this  state  by  the 
decedent  and  that  property  which  is  transiently  here,  as  upon 
the  person  or  in  the  baggage  of  a  man  suddenly  dying  within 
this  state,  was  never  intended  to  be  covered  by  the  provisions 
of  the  act." 

Vide  cases  cited  in  Matter  of  Clinch,  180  N.  Y.  300-302  (1905). 


192  THE   COURT   OF   APPEALS   DECISIONS 

Vide  subdivisions  2  and  4  of  §  220,  and  §  243.  Matter  of  Zefita,  167 
N.  Y.  280;  Matter  of  Lord,  111  App.  Div.  152-6,  affirmed,  without  opinion, 
186  N.  Y.  549,  sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn;  Mat- 
ter of  Huber,  86  App.  Div.  458-463;  Matter  of  Wolfe,  89  App.  Div.  349- 
351,  affirmed,  without  opinion,  179  N.  Y.  599;  Matter  of  Leopold,  35  Misc. 
369;  Matter  of  Ames,  141  N.  Y.  Supp.  793-796;  Matter  of  Clark,  N.  Y. 
Law  Journal,  February  9,  1912;  Matter  of  Revere,  id.,  January  28,  1913. 

As  to  transfers  in  non-resident  estates  since  1911  amendment  vide 
page  133. 


1894. 

MATTER  OF  FRANK  LINSLY  JAMES,  144  N.  Y.  6. 

Testator  died  in  April,  1890,  a  citizen  of  Great  Britain  and 
a  non-resident  of  the  state  of  New  York.  He  left  property  in 
Great  Britain,  which  was  valued  at  $477,630,  and  property 
in  this  country,  which  was  valued  at  $2,303,472.53.  He  gave 
legacies  to  collateral  relatives  and  to  charities  which,  in  the 
aggregate,  amounted  to  $236,810.  The  residue  of  his  estate 
was  given  to  his  executors,  upon  trusts  for  the  benefit  of  his 
two  brothers. 

Stocks  of  foreign  corporations,  although  deposited  in  this 
state,  are  not  taxable  in  a  non-resident's  estate. 

The  court  say,  page  10:  "The  tax  is  laid  only  in  the  case 
where  property  of  the  non-resident  decedent  within  the  state 
passes  to  the  legatee's  collateral  relative,  or  stranger  in  blood. 
Having,  by  the  previous  act  of  1885,  imposed  a  succession 
tax  with  respect  to  the  property  of  residents  of  the  state,  the 
legislature  added  by  amendment  a  further  provision,  which 
imposed  the  same  tax  with  respect  to  any  property  of  non- 
residents, that  should  be  within  the  state  and  that  should  pass 
to  persons  or  corporations,  not  excepted  by  the  statute.  *  *  * 
The  property,  which  the  testator  died  possessed  of  in  Great 
Britain,  is  largely  in  excess  of  the  amount  given  by  him  in  lega- 
cies. Some  portion  of  them  has  already  been  paid  from  the 
English  estate  and  the  executor  has  declared  his  determination 
of  appropriating  that  part  of  the  testator's  property  to  their 
payment;  so  that  the  American  estate  shall  constitute  the  resid- 
uary estate,  disposed  of  by  the  will  in  favor  of  the  testator's 
brothers.  This  he  may  rightly  do  and  thus  save  the  estate 
from  the  payment  of  the  succession  tax  imposed  by  our  laws." 

Vide  Matter  of  Bronson,  150  N.  Y.  1-7;  etiam  subdivisions  2  and  3 
of  §  220  and  §  243. 


145  N.  Y.  593  193 

Subdivision  3  was  added  to  the  statute  by  chapter  310,  Laws  of  1908, 
in  effect  May  18,  1908,  for  the  express  purpose  of  doing  away  with  the 
principle  of  this  case.  Matter  of  Porter,  67  Misc.  19,  affirmed,  without 
opinion,  148  App.  Div.  896.  Vide  etiam  ruling  of  Comptroller,  January  20, 
1913,  in  1  State  Department  Reports,  605,  quoted  supra,  page  152. 

As  to  transfers  in  non-resident  estates  since  1911  amendment  vide 
page  133. 

Matter  of  Livingston,  1  App.  Div.  568-570;  Matter  of  Cooley,  186  N.  Y. 
220-7;  Matter  of  Ramsdill,  190  N.  Y.  492-4;  Matter  of  McEwan,  51  Misc. 
455;  Matter  of  Whiting,  200  N.  Y.  520;  Matter  of  Bishop,  82  App.  Div. 
112-115;  Matter  of  Gibbes,  84  App.  Div.  510-513,  affirmed,  without  opin- 
ion, 176  N.  Y.  565;  Matter  of  Thayer,  58  Misc.  117-119,  affirmed,  193 
N.  Y.  430. 


1894. 

MATTER  OF  NICHOLAS  BALLEIS,  144  N.  Y.  132. 

By  his  will  the  testator  divided  his  residuary  estate  among 
certain  religious  corporations,  organized  and  existing  under 
the  laws  of  other  states,  and  it  is  contended  for  them  that 
they  are  exempted  from  taxation  under  the  provisions  of  chap- 
ter 399  of  the  Laws  of  1892. 

Held,  (page  135)  that  the  natural  construction  ol  the  act 
of  1892  is  to  confine  its  operation  to  religious  corporations 
created  by  the  state. 

The  distinction  between  domestic  and  foreign  corporations  was  elim- 
inated by  Amendment  of  §221  by  chapter  732,  Laws  of  1911,  in  effect 
July  21, 1911.  Matter  of  Prime,  136  N.  Y.  347;  Matter  of  Palmer,  33  App. 
Div.  307,  affirmed,  on  opinion  below,  158  N.  Y.  669;  United  States  v.  Per- 
kins, 163  U.  S.  625-630;  Matter  of  Athause,  63  App.  Div.  252-256,  affirmed, 
without  opinion,  168  N.  Y.  670;  Matter  of  McCartin,  N.  Y.  Law  Journal, 
December  5,  1913,  opinion  quoted  post,  page  608. 

Matter  of  Crittenton,  N.  Y.  Law  Journal,  April  4,  1911,  held  that  a 
corporation  created  by  Congress  was  a  foreign  corporation  within  the 
me°ning  of  §  221  prior  to  1911  amendment. 


1895. 

MATTER  OF  GEORGE  W.  CULLUM,  146  N.  Y.  593,  affirms, 
without  opinion,  76  Hun,  610. 

A  legacy  to  the  United  States  is  subject  to  a  transfer  tax. 

Vide  Matter  of  Merriam,  141  N.  Y.  479,  sustained  hi  163  U.  S.  625, 
sub  nom.  United  States  v.  Perkins;  Matter  of  Hamilton,  148  N.  Y.  310- 
313. 

13 


194  THE    COURT   OF   APPEALS   DECISIONS 

1895. 

MATTER  OF  CHARLES  H.  EDWARDS,  146  N.  Y.  380, 
affirms,  without  opinion,  85  Hun,  436. 

Decedent  died  a  resident  October  16,  1888.  He  had  money 
on  deposit  in  savings  banks  and  kept  the  savings  bank  books 
in  a  tin  box.  On  October  1,  1888,  he  delivered  the  tin  box  to 
James  A.  Ridden  informing  him  that  he  was  about  to  go  to  St. 
Luke's  Hospital  in  the  city  of  New  York  to  have  an  operation 
performed  for  hernia,  and  that  he  was  apprehensive  he  might 
die  from  the  result  of  the  operation,  and  said  to  him  that  if  he 
did  not  return,  he  gave  him  the  box  and  its  contents.  He  went 
to  the  hospital  on  the  next  day,  and  on  the  fifth  day  of  Octo- 
ber an  operation  was  there  performed  for  Inguinal  Hernia. 
The  operation  was  not  dangerous  and  was  apparently  successful. 
But  on  the  sixteenth  day  of  October  he  suddenly  died  from 
heart  disease,  with  which  he  was  afflicted  when  he  went  to  the 
hospital.  He  had  not  returned  from  the  hospital  and  had  not 
recovered  from  the  disease  for  which  the  operation  was  per- 
formed, nor  from  the  results  of  the  operation. 

The  court  say,  page  436:  "The  box  contained  sixteen  sav- 
ings bank  books,  seven  of  which  represented  accounts  stand- 
ing to  the  credit  of  Charles  H.  Edwards,  and  nine  of  which 
represented  accounts  standing  to  the  credit  of  Thomas  Edwards. 
Thomas  Edwards  was  the  father  of  Charles  H.  Edwards,  and 
he  died  before  Charles,  who  was  his  only  relative  and  heir  at 
law. 

"The  appraiser  appointed  by  the  surrogate  valued  the  prop- 
erty at  $26,227.48  and  that  valuation  was  confirmed,  and  a 
tax  was  imposed  upon  the  sum  under  the  transfer  statute  of 
this  state. 

"The  donee  of  the  gift  has  appealed  from  the  order  and  in- 
sists that  there  can  be  no  tax  upon  the  amounts  represented 
by  the  bank  books  which  stood  in  the  name  of  Thomas  Edwards, 
because  Charles  H.  Edwards  was  not  the  owner  of  such  ac- 
counts. 

"The  facts  developed  fail  to  justify  that  contention.  The 
bank  books  were  in  the  possession  of  Charles  H.  Edwards,  and 
Ridden,  the  donee,  received  them  from  him.  All  the  title  he 
ever  had  to  any  of  the  bank  books  was  derived  from  his  donor, 
and  that  title  was  affirmed  by  the  Court  of  Appeals.  (Ridden  v. 
Thrall,  125  N.  Y.  572.) 


146  N.  Y.  380  195 

"It  is  to  be  collected  from  the  affidavit  of  Ridden,  printed 
in  the  appeal  book,  that  when  he  made  a  claim  against  the 
banks  for  the  money  standing  to  the  credit  of  Thomas  Edwards 
upon  the  nine  banks  books  which  contained  his  name,  he  was 
confronted  by  a  claim  of  the  representatives  of  the  estate  of 
Thomas  Edwards,  which  he  compromised  by  paying  them  the 
sum  of  $5,000.  Thereupon  he  received  the  money  from  the 
banks,  and  he  received  it  as  owner.  He  did  not  acknowledge 
the  claim  of  the  representatives  of  Thomas  Edwards  to  the 
ownership  of  the  money;  he  merely  acknowledged  them  as 
adverse  claimants,  and  made  a  compromise  with  them.  In 
other  words,  he  bought  them  off  by  paying  them  about  one- 
fifth  of  their  claim.  He  took  no  assignment  from  them,  but 
as  between  him  and  the  banks  he  evidently  based  his  claim  to 
the  money  upon  the  donation  of  Charles  H.  Edwards. 

"The  legal  effect  of  his  compromise  with  the  representatives 
of  the  estate  of  Thomas  Edwards  was  to  quiet  their  claim  and 
perfect  his  title  to  the  property  which  he  received  from  his 
donor. 

"The  appellant  also  contends  that  property  passing  by  virtue 
of  a  gift  causa  mortis  was  not  subject  to  taxation  under  the 
statute  which  was  in  force  in  1888,  when  the  gift  in  question 
was  made.  That  statute  was  as  follows:  'After  the  passage 
of  this  act  all  property  which  shall  pass  by  will,  or  by  the  in- 
testate laws  of  this  state  from  any  person  who  may  die  seized 
or  possessed  of  the  same  while  a  resident  of  this  state,  *  *  * 
or  any  interest  therein  or  income  therefrom,  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift  made  or  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor  or  bargainer,  *  *  *  shall  be  and  is  subject  to  a 
tax'  (Chap.  713,  Laws  of  1887,  §  1). 

"This  statute  evinces  the  intention  of  the  Legislature  to 
subject  to  a  tax  all  property  which  should  be  transferred  by  a 
gift  to  take  effect  after  the  death  of  the  grantor  or  bargainer. 

"The  title  to  the  property  passed  to  the  appellant  upon  its 
delivery  to  him  by  the  donor,  but  the  gift  was  subject  to  revo- 
cation at  all  times  during  the  lifetime  of  the  giver,  and  in  that 
sense  it  took  effect  in  enjoyment  after  the  death  of  his  grantor. 
He  could  not  have  maintained  an  action  for  the  recovery  of 
the  money  represented  by  the  bank  books  during  the  lifetime 
of  Charles  H.  Edwards,  and,  therefore,  he  could  not  enter 
upon  the  full  enjoyment  of  the  gift  until  after  his  death. 


196  THE   COURT   OF   APPEALS   DECISIONS 

"The  gift  therefore,  seems  to  fall  within  the  spirit  and  inten- 
tion of  the  statute,  and  the  tax  was,  therefore,  properly  im- 
posed." 

Vide  subdivision  4,  §  220.  Matter  of  John  Palmer,  117  App:  Div.  360- 
367;  Matter  of  Birdsall,  22  Misc.  180-195,  affirmed,  without  opinion,  43 
App.  Div.  624.  Vide  cases  cited  sub  Gift,  and  sub  Compromise  of  Claim. 


1895. 

MATTER  OF  JOHN  B.  SEAMAN,  147  N.  Y.  69. 

Testator  died  in  October,  1876,  and  by  his  will  created  life 
estates,  with  remainders  over.  There  was  no  inheritance  tax 
law  when  the  will  took  effect  and  the  estates  which  it  created 
devolved,  but  the  act  of  1892  was  in  force  when  the  life  tenants 
died  and  possession  of  the  remainders  passed  to  the  four  children, 
and  the  question  involved  was  whether  that  vesting  hi  possession 
which  occurred  after  1892  was  a  transfer  or  succession  then  for 
the  first  time  passing,  and,  so,  taxable  under  the  act,  or,  if  not 
then  first  occurring,  is  at  least  made  taxable  by  the  explicit  lan- 
guage of  the  statute. 

Held,  that  the  tax  law  did  not  operate  retrospectively,  and 
subject  to  taxation  rights  of  succession  which  accrued  before  the 
tax  law  came  into  existence,  and  that  the  remainders  of  the 
four  children  were  not  taxable.  Further  held,  that  the  portion 
of  §  220  which  is  now  embodied  in  subdivision  5  of  the  present 
§  220  does  not  refer  to  transfers  by  will  or  intestacy. 

The  court  said,  page  74:  "  It  is  obvious  that  a  right  of  succes- 
sion to  the  estates  in  remainder  passed  at  once  on  the  death  of 
the  testator  to  the  four  children  and  was  a  vested  interest,  al- 
though subject  to  be  defeated  or  modified  by  subsequent  con- 
tingencies. If  the  Inheritance  Tax  Law  had  been  in  existence 
at  the  date  of  the  testator's  death,  these  interests  would  have 
been  taxable  at  once  in  the  sense  that  the  incumbrance  of  the 
right  of  the  state  would  immediately  attach.  We  have  held 
that  the  tax  is  not  upon  the  property  which  is  transferred,  but 
upon  the  right  of  succession  which  passes  to  the  successor. 
(Matter  of  Swift,  137  N.  Y.  88.)  A  right  of  succession  passed  to 
the  four  living  children  of  George  at  the  death  of  testator.  It 
came  from  him;  it  was  transferred  by  him;  taking  effect  at  his 
death;  and  passed  then  or  never.  But  the  right  itself,  although 
vesting  in  the  successors  at  once,  had  its  own  peculiar  character. 


147  N.  Y.  69  197 

It  could  not  ripen  into  possession  or  enjoyment  until  the  death 
of  the  life  tenants,  and  before  that  event  was  contingent  solely 
as  to  the  persons  who  should  eventually  take  and  the  propor- 
tions to  be  observed.  The  legatees  as  a  class  were  certain;  the 
particular  individuals  were  alone  uncertain. 

"But  in  just  such  a  case  difficulties  arose  hi  respect  to  the 
application  of  the  Inheritance  Tax  Law,  and  received  their  solu- 
tion hi  the  case  of  Curtis  (142  N.  Y.  219).  There,  as  here,  a 
right  of  succession  passed  by  the  will,  and  at  the  date  of  the 
death  of  the  testatrix,  but  was  contingent  as  to  the  specific 
legatees;  and  it  was  seen  that  the  immediate  assessment  and 
collection  of  a  tax  was  impossible,  because,  as  the  law  then 
stood,  the  succession  of  the  children  was  exempt  while  the  sub- 
stituted succession  of  the  nephews  and  nieces  would  be  taxable; 
and  we  determined  that  the  state  must  wait  for  the  collection 
of  its  tax  until  the  contingency  was  settled.  I  sought  in  that 
case  to  free  the  subject  from  the  nice  and  difficult  questions 
which  attend  the  construction  of  wills,  but,  desirable  as  the 
result  is,  I  am  less  confident  than  I  was  then  of  our  ability  to 
accomplish  it.  The  case  did  not  decide  what  is  now  contended 
on  behalf  of  the  respondent.  In  the  counsel's  brief  it  is  described 
as  holding  that  no  beneficial  interest  passed,  and  that  construc- 
tion is  reached  by  emphasizing  half  of  a  sentence  with  a  neglect 
of  the  remaining  half.  The  language  used  was  'the  state  cannot 
establish  that  any  beneficial  interest  will  pass  to  persons  in 
whose  hands  it  will  be  taxable,  and  until  it  can  show  that  vital 
and  necessary  fact  its  right  to  the  tax  cannot  arise.'  To  say  that 
no  beneficial  interest  passed  into  hands  where  it  was  taxable  is 
very  different  from  saying  that  no  beneficial  interest  passed  at 
all.  The  doctrine  of  the  case  and  its  manifest  trend  was  that 
where  the  particular  persons  who  were  to  have  the  beneficial 
possession  were  uncertain,  the  appraisal  and  collection  must  be 
adjourned  until  the  uncertainty  ended,  but  no  new  doctrine  of 
the  passing  of  the  right  of  succession  at  a  date  later  than  that  of 
the  will  was  at  all  asserted. 

"  It  is  said,  however,  that  the  right  of  succession  passing  in  re- 
mainder by  the  will  was  at  best  merely  technical  and  nominal, 
and  that  the  beneficial  interest  did  not  pass  until  the  termina- 
tion of  the  life  estates.  In  one  sense  that  is  true.  The  right  of 
succession  to  specific  individuals  might  prove  barren,  and  for 
that  reason  the  claim  of  the  state  should  be  adjourned,  and  the 
law  of  1892  fully  recognizes  and  provides  for  such  an  adjourn- 


198  THE    COURT   OF   APPEALS   DECISIONS 

ment,  but  a  necessary  and  admissible  delay  in  appraisal  and 
collection  is  a  very  different  matter  from  an  assertion  that  no 
beneficial  right  of  succession  passed  at  all  until  after  the  decease 
of  the  life  tenants.  Next,  the  language  of  the  act  is  relied  on  to 
effect  the  result,  and  it  presents  the  real  and  difficult  question 
requiring  solution.  Section  one  of  the  act  imposes  a  tax  upon  all 
transfers  of  property  to  persons  or  corporations  not  exempt 
from  taxation  iji  the  cases  thereafter  specified.  The  first  sub- 
division embraces  transfers  by  will  or  by  intestacy  from  residents 
of  the  state.  The  second  covers  similar  transfers  of  property 
within  the  state  where  the  decedent  was  a  non-resident  at  the 
time  of  his  death.  So  far  the  transfers  take  place  necessarily 
at  the  moment  of  death,  for  the  will  on  the  one  hand  and  the 
intestate  laws  on  the  other  operate  and  speak  from  that  date, 
and  any  special  provision  about  that  was  needless.  But  then 
comes  the  third  subdivision  introducing  a  new  case.  It  reads 
thus:  'When  the  transfer  is  of  property  made  by  a  resident  or  a 
non-resident  when  such  non-resident's  property  is  within  this 
state,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after  such  death.' 
At  this  point  are  evidently  referred  to  grants  or  gifts  causa 
mortis;  that  is,  those  affecting  the  result  of  a  will  or  of  intestacy 
by  a  grant  or  gift  made  during  life,  and  so  by  a  different  process. 
The  subdivision  then  proceeds:  'Such  tax  shall  also  be  imposed 
when  any  such  person  or  corporation  becomes  beneficially  en- 
titled, in  possession  or  expectancy  to  any  property  or  the  in- 
come thereof  by  any  such  transfer  whether  made  before  or  after 
the  passage  of  this  act.'  1  If  we  give  this  language  a  general 
and  broad  application,  making  it  cover  not  only  grants  or  gifts 
causa  mortis,  but  also  transfers  by  will  or  intestacy,  we  give  the 
act  a  retrospective  operation,  and  subject  to  taxation  rights  of 
succession  which  accrued  before  the  statute  came  into  existence. 
Of  course  we  ought  not  to  do  that  upon  any  doubtful  or  ambigu- 
ous expression.  The  words  of  the  statute  have  their  full  and 
natural  force  when  applied  to  the  new  case,  immediately  pre- 
ceding, of  grants  or  gifts  causa  mortis.  A  grantor  may  have  con- 
veyed and  delivered  his  deed  before  1892,  in  contemplation  of 
death,  and  to  take  effect  upon  the  happening  of  that  event,  or 
reserving  a  power  of  revocation,  as  well  as  the  possession  or  en- 
joyment, during  his  lifetime,  and  the  legislature  certainly  in- 
tended to  put  such  a  transfer  on  the  same  footing  as  one  by  will. 


147  N.  Y.  69  199 

It  is  of  no  consequence  that  the  will  was  executed  before  the 
statute  if  the  death  occurs  after,  and  the  same  rule  was  intended 
to  be  explicitly  applied  to  grants  causa  mortis. 

"Though  the  deed  precedes  the  tax  law,  as  the  execution 
of  the  will  precedes  that  law  in  a  possible  case,  yet  the  transfer 
in  both  instances  is  to  date  from  the  one  event  which  makes  it 
operative  and  effective.  So  much  the  legislature  certainly  in- 
tended, and  so  much  can  be  admitted  without  making  the 
statute  operate  retrospectively.  Did  the  legislature  mean  more 
than  that?  The  argument  for  an  affirmative  answer  rests 
somewhat  upon  the  expression:  'Shall  be  beneficially  entitled 
hi  possession  or  expectancy.'  But  these  four  children,  at  the 
death  of  the  testator,  were  'beneficially  entitled'  to  their  re- 
mainders hi  'expectancy.'  An  estate  'in  expectancy'  is  one 
where  the  right  to  the  possession  is  postponed  to  a  future  period, 
and  it  is  'beneficial'  where  the  devisee  takes  solely  for  his  own 
use  or  benefit,  and  not  as  the  mere  holder  of  the  title  for  the 
use  of  another.  So  that  the  four  children,  as  I  have  said,  were 
beneficially  entitled  in  expectancy,  at  the  date  of  testator's 
death,  to  the  estates  which  later  came  into  their  actual  pos- 
session. 

"In  addition,  it  should  be  observed  that  the  statute  draws 
the  distinction  between  the  passing  of  the  right  of  succession 
and  the  subsequent  enjoyment,  or  termination  of  a  defeasible 
quality.  The  right  of  the  state  attaches  when  the  right  of  suc- 
cession accrues,  but  may  not  be  enforced  in  advance  of  that 
future  possession  and  enjoyment,  or  indefeasible  ownership, 
which  identifies  the  persons  who  ought  to  pay.  I  think  that 
is  the  meaning  of  the  statute,  although  in  some  respects  it  is 
not  free  from  ambiguity,  and  that  we  ought  not  to  give  it  the 
retrospective  effect  for  which  the  respondent  contends." 

Matter  of  Davis,  149  N.  Y.  539-549;  Matter  of  Langdon,  153  N.  Y. 
6-9;  Matter  of  Gibson,  157  N.  Y.  680,  post,  page  226;  Matter  of  Edgerton, 
35  App.  Div.  125-129,  affirmed,  without  opinion,  158  N.  Y.  671;  Matter  of 
Masury,  28  App.  Div.  580-587,  affirmed,  without  opinion,  159  N.  Y.  532; 
Matter  of  Bostwick,  160  N.  Y.  489;  Matter  of  Vanderbilt,  172  N.  Y. 
69-72;  Matter  of  Baker,  83  App.  Div.  530-534,  affirmed,  on  opinion  below, 
178  N.  Y.  575;  Matter  of  Hitchins,  43  Misc.  485-493,  affirmed,  without 
opinion,  181  N.  Y.  553;  Matter  of  Birdsall,  22  Misc.  180-195,  affirmed, 
without  opinion,  43  App.  Div.  624;  Matter  of  Meyer,  83  App.  Div.  381- 
333;  Matter  of  Palmer,  117  App.  Div.  360-366;  Matter  of  Smith,  150  App. 
Div.  805-808;  Matter  of  Abraham,  151  App.  Div.  441-442;  Matter  of 
Webber,  151  App.  Div.  539;  Matter  of  Haight,  76  Misc.  380-382,  affirmed, 
152  App.  Div.  228;  Matter  of  Penfold,  142  N.  Y.  Supp.  678-680. 


THE   COURT   OF   APPEALS   DECISIONS 

1  As  to  subdivision  5,  §  220,  vide  Matter  of  Spaulding,  49  App.  Div. 
541-549,  affirmed,  without  opinion,  163  N.  Y.  607;  Matter  of  Dows,  167 
N.  Y.  227-233;  Matter  of  Pell,  171  N.  Y.  48-53;  Matter  of  Craig,  97  App. 
Div.  289,  affirmed,  on  opinion  below,  181  N.  Y.  551;  Matter  of  Abraham, 
151  App.  Div.  441-443. 


1896. 

MATTER  OF  ROBERT  RAY  HAMILTON,  148  N.  Y.  310. 

Testator  died  August  23,  1890,  and  his  will  contained  a  be- 
quest of  $10,000  to  the  city  of  New  York  for  the  purpose  of 
providing  an  ornamental  fountain  to  be  placed  in  one  of  the 
public  places  in  the  city.  The  question  is  whether  this  bequest 
is  subject  to  the  succession  tax  upon  legacies  imposed  by  chap- 
ter 713  of  the  Laws  of  1887. 

The  court  say,  page  314:  "Public  property  is  non-taxable, 
not  upon  the  theory  of  exemption,  but  for  the  obvious  reason 
that  there  is  no  law,  and  practically  never  can  be  a  law,  making 
it  taxable.  Of  course  a  statute  might  be  enacted  including  it 
within  the  operation  of  tax  laws,  but  since  the  government 
would  have  to  pay  the  tax  itself  such  a  law  would  be  utterly 
useless. 

"It  is,  therefore,  quite  plain  that  when  the  legislature excepted 
from  the  operation  of  the  law  now  under  consideration  'the 
societies,  corporations  and  institutions  now  exempted  by  law 
from  taxation/  it  could  not  have  referred  to  the  state  itself  or 
to  any  of  its  political  divisions.  The  reference  obviously  was 
to  such  associations,  corporations  or  institutions  as  would  have 
been  included  within  its  general  terms,  but  for  the  exception  or 
exemption  itself.  We  have  seen  that  the  state  or  any  of  its  polit- 
ical divisions  would  not  have  fallen  within  the  terms  of  the  law, 
and  hence,  no  exemption  was  necessary  in  order  to  relieve  them 
from  its  provisions.  Exemption  implies  that  the  person  or 
corporation  to  which  it  applies  is  or  would  otherwise  be  taxable. 
To  include  public  property  which  is  not,  and  in  the  nature  of 
things  cannot  be  taxable  at  all  within  the  terms  of  an  exemption 
act,  would  be  to  do  a  vain  and  useless  thing  which  cannot  be 
imputed  to  the  legislature  in  the  construction  of  the  act  in 
question. 

"  It  is  entirely  reasonable,  however,  to  suppose  it  was  intended 
that  when  a  municipal  corporation  takes  a  gift  of  personal 
property  under  a  will  that  the  gift  is  upon  the  same  conditions 
and  subject  to  the  same  burdens  and  deductions  as  would  apply 


149  N.  Y.  539  201 

& 

in  a  case  where  the  bequest  was  made  to  an  individual.  It  must, 
we  think,  take  the  gift  subject  to  the  payment  of  the  succession 
tax  since  it  is  not  included  within  the  exemption  which  permits 
certain  other  corporations  to  take  without  such  conditions. 
The  gift,  less  the  tax,  is  what  the  city  takes  and  the  balance 
is  to  be  paid  into  the  state  treasury." 

Vide  §§  2216  and  244.  Matter  of  Thrall,  157  N.  Y.  46;  United  States  v. 
Perkins,  163  U.  S.  625-631,  sustaining  Matter  of  Merriam,  141  N.  Y.  479; 
Matter  of  Moses,  138  App.  Div.  525-6.  As  to  bequest  to  city  in  trust  for 
educational  purposes  vide  Matter  of  Saunders,  77  Misc.  54,  affirmed,  with- 
out opinion,  156  App.  Div.  891. 


1896. 

MATTER  OF  KATHARINE  J.  S.  DAVIS,  149  N.  Y.  539. 

Testatrix  died  a  resident  January  16,  1887.  Transfer  tax 
proceedings  were  not  commenced  until  July  24,  1894. 

The  will  provided,  inter  alia:  "I  give,  devise  and  bequeath  to 
my  sister,  Julia  L.  S.  Ingraham,  now  wife  of  Duncan  Ingraham, 
all  my  real  and  personal  estate  and  property  of  what  nature, 
name  or  kind  the  same  may  be,  for  her  sole  and  separate  use  and 
benefit,  for  and  during  the  term  of  her  natural  life,  and  from  and 
immediately  after  her  decease  I  do  give,  devise  and  bequeath  the 
same  to  the  children  of  my  said  sister  who  may  be  living  at  the 
time  of  her  decease,  share  and  share  alike."  The  sister,  Mrs. 
Ingraham,  died  February  2,  1894. 

The  transfer  or  inheritance  tax  must  be  governed  by  chap.  483 
of  the  Laws  of  1885,  which  was  in  force  at  her  death,  and  its  pro- 
visions must  control  as  to  the  subject  and  the  rate  of  taxation. 
The  method  of  procedure  for  the  enforcement  of  the  Transfer  or 
Inheritance  Tax  Law  was  somewhat  changed  by  chap.  713  of  the 
Laws  of  1887  and  chap.  399  of  the  Laws  of  1892;  the  procedure  is 
controlled  by  the  statute  as  it  existed  at  the  time  this  proceeding 
was  instituted.  Hence,  the  rights  of  the  parties  depend  upon  the 
statute  of  1885,  while  the  method  of  procedure  is  governed  by 
that  of  1892. 

The  court  say,  page  546:  "It  has  been  often  held  by  this 
court  that  the  tax  imposed  is  not  a  tax  upon  property,  but  upon 
the  right  of  succession,  and,  hence,  the  true  test  of  value  by 
which  the  tax  is  to  be  measured,  is  the  value  of  the  estate  at  the 
time  of  the  transfer  of  title,  and  not  its  value  at  the  time  of  the 
transfer  of  the  possession.  *  *  * 


202  THE   COURT   OP   APPEALS   DECISIONS 

"  (Page  547.)  Whatever  of  confusion  exists  in  the  authorities 
upon  the  subject  seems  to  be  due  to  a  failure  in  some  of  the  cases 
to  properly  distinguish  between  the  time  when,  in  a  given  case, 
the  title  passed  and  the  time  when  the  legatee  became  entitled 
to  the  possession  of  his  estate  under  the  will.  Where  the  estate 
transferred  has  a  fixed  or  ascertainable  value  at  the  time  of  the 
death  of  the  grantor,  testator  or  intestate  the  value  at  that  time 
must  be  the  basis  of  the  appraisal  whenever  made;  but  if  the 
person  to  whom  the  property  passed  cannot  be  known  until  the 
death  of  the  life  tenant,  the  tax  cannot  be  imposed  until  after 
that  event.  Hence,  the  appellant's  contention  that  the  interest 
of  the  respondent  was  to  be  appraised  as  of  the  time  when  she 
acquired  possession  of  the  estate,  cannot  be  sustained.  Such  was 
manifestly  the  opinion  of  the  learned  surrogate  when  he  made 
the  original  decree  in  this  proceeding,  as  he,  with  the  assistance 
of  the  superintendent  of  the  insurance  department,  ascertained 
the  value  of  her  estate  at  the  time  of  the  death  of  the  testatrix, 
and  established  the  value  of  the  respondent's  interest  upon 
that  basis.  That  portion  of  his  decree  was  correct.  He  how- 
ever, added  to  it  a  direction  to  collect  interest  at  the  rate  of 
ten  per  cent,  from  January  16,  1887.  In  this  he  was  clearly 
wrong.  *  *  * 

"(Page  547.)  The  respondent's  appeal  to  the  surrogate  was 
only  from  that  portion  of  the  decree  which  directed  the  county 
treasurer  to  add  interest  at  the  rate  of  ten  per  cent,  from  Jan- 
uary 16,  1887.  She  did  not  appeal  from  the  appraisal  or  val- 
uation of  the  estate,  or  from  the  assessment  of  the  tax.  Upon 
that  appeal  the  learned  surrogate  was  not  authorized  to  reverse 
the  entire  decree,  to  make  a  new  appraisal  or  valuation  of  the 
estate,  or  to  interfere  with  any  portion  of  it  except  that  appealed 
from,  as  it  is  a  well  settled  rule  that  only  the  parts  of  a  judgment 
or  decree  which  are  appealed  from  can  be  reviewed.1  *  *  * 

As  we  have  already  seen,  the  right  to  the  tax  in  this  case  did 
not  arise  until  the  death  of  the  life  tenant,  for  the  reason  that 
until  that  time  it  was  neither  certain  that  this  property  would 
be  subject  to  an  inheritance  or  transfer  tax,  nor  that  the  re- 
spondent would  ever  be  entitled  to  the  possession  of  the  prop- 
erty and  thus  become  liable  to  be  taxed  upon  her  right  of  succes- 
sion. Until  that  time  no  tax  accrued.  *  *  *  Interest  should 
be  charged  only  from  the  time  of  the  death  of  the  life  tenant  to 
the  time  of  payment." 

1  As  to  notice  of  appeal  vide  Matter  of  Manning,  169  N.  Y.  449;  Matter 


149  N.  Y.  618  203 

of  Cook,  194  N.  Y.400;  Matter  of  Wormser,  51  App.  Div.  441-445;  Matter 
of  Kennedy,  93  App.  Div.  27-30;  Matter  of  Stone,  56  Misc.  247-248. 

Vide  Matter  of  Sloane,  154  N.  Y.  109-113;  Matter  of  Vanderbilt,  172 
N.  Y.  69-77;  §§222,  223,  230,  232  and  241;  Morgan  v.  Cowie,  49  App. 
Div.  612-616;  Matter  of  Rice,  56  App.  Div.  253-256;  Matter  of  Fuller, 
62  App.  Div.  428-429;  Matter  of  Meyer,  83  App.  Div.  381-384;  Matter  of 
Abraham,  151  App.  Div.  441-442;  Matter  of  Webber,  151  App.  Div.  539; 
Matter  of  Coogan,  27  Misc.  563-567,  affirmed,  162  N.  Y.  613;  Matter  of 
Eldridge,  29  Misc.  734-738;  Matter  of  Loewi,  75  Misc.  57-62;  Matter  of 
Clark,  N.  Y.  Law  Journal,  February  9,  1912;  Matter  of  Penfold,  142  N.  Y. 
Supp.  678-680. 


1896. 

MATTER  OF  GEORGE  WILLIAM  SUTTON,  149  N.  Y.  618, 
affirms  on  opinion  below,  3  App.  Div.  208. 

The  estate  of  the  testator  consisted  of  both  real  and  personal 
property.  By  the  provisions  of  the  will  there  was  an  equitable 
conversion  of  the  real  into  personal  estate,  and  the  whole  estate 
passed  to  the  beneficiaries  as  personal  property,  and  none  of  the 
real  estate,  as  such,  was  transferred  to  them. 

The  appraiser  held  that  the  whole  estate  was  to  be  treated 
as  personal  property  for  the  purpose  of  determining  the  transfer 
tax.  Upon  appeal  to  the  surrogate  the  order  entered  upon  the 
appraiser's  report  was  modified  so  as  to  exempt  from  the  tax  the 
equity  in  the  real  estate  over  and  above  the  mortgages.  From 
the  order  of  the  surrogate  the  executor  and  the  county  treasurer 
both  appealed. 

The  questions  presented  on  the  appeal  were,  page  210: 

"First,  Whether  the  real  estate  of  which  the  testator  died 
seized  is,  for  the  purpose  of  determining  the  transfer  tax,  to  be 
treated  as  such  or  as  personal  property. 

"Second,  If  it  is  treated  as  real  estate,  whether  in  determining 
the  amount  of  the  tax  the  debts  of  the  testator  secured  by  mort- 
gages upon  the  real  estate  should  be  deducted  from  the  personal 
property." 

The  order  of  the  surrogate  was  affirmed,  the  court  holding 
(page  211)  the  tax  should  be  on  the  property  as  the  testator 
"  leaves  it,  without  regard  to  the  operation  or  effect  of  equitable 
rules  that  apply  only  to  the  administration  of  the  estate."  It 
also  was  held  that  the  mortgages  should  not  be  deducted  from 
the  personal  estate. 

Transfers  of  real  property  situate  within  the  state  first  taxable  to  "lin- 
eals"  by  chapter  41,  Laws  of  1903,  in  effect  March  16,  1903.  Vide  §  220; 


204  THE   COURT   OF   APPEALS   DECISIONS 

Matter  of  Dows,  167  N.  Y.  227-232;  distinguished  in  Matter  of  Mills,  86 
App.  Div.  555,  affirmed,  without  opinion,  177  N.  Y.  562. 

Matter  of  Livingston,  1  App.  Div.  568;  Matter  of  Offerman,  25  App. 
Div.  94;  Matter  of  Maresi,  74  App.  Div.  76-79;  Matter  of  Daly,  100  App. 
Div.  373-377,  affirmed,  without  opinion,  182  N.  Y.  524;  Matter  of  Wallace, 
28  Misc.  603-605;  Matter  of  Baker,  67  Misc.  360-363. 


1896. 

MATTER  OF  HENRY  BRONSON,  150  N.  Y.  1. 

The  court  say,  page  3 :  "  The  decedent  was  domiciled  in  the 
state  of  Connecticut,  where  he  died  in  1893 ;  leaving,  by  his  will, 
his  residuary  estate  to  his  two  sons,  also  residents  of  that  state. 
A  part  of  the  residuary  estate  consisted  hi  shares  of  the  capital 
stock  and  in  the  bonds  of  corporations  incorporated  under  the 
laws  of  this  state  and  which  were  in  the  testator's  possession  at 
his  domicile.  They  had  been  handed  over  to  the  residuary 
legatees,  prior  to  the  institution  by  the  comptroller  of  the  City 
of  New  York  of  this  proceeding  to  appraise  them  for  the  purposes 
of  taxation  under  the  Transfer  Tax  Act  (chap.  399,  Laws  of 
1892).  *.  *  *  The  important  words  to  be  noticed  are,  in  the 
case  of  a  non-resident  decedent  'property  within  the  state.' 
Their  importance  is  evident;  inasmuch  as  the  attempt  of  the 
state  to  collect  a  tax,  where  the  decedent  was  not  subject  to  its 
jurisdiction,  is  limited  to  that  which  possesses  the  legal  attri- 
butes and  characteristics  of  property  here.  *  *  * 

"  (Page  5.)  Whatever  may  be  argued  in  support  of  the  right 
to  subject  the  bonds  of  domestic  corporations  to  appraisement 
for  taxation  purposes  under  this  act,  when  physically  within  the 
state,  upon  some  theory  that  they  are  something  more  than  the 
evidences  of  a  debt  and  constitute  a  peculiar  and  appreciable 
species  of  property,  within  the  recognition  of  the  law  as  well  as 
of  the  business  community,  such  argument  is  certainly  unavail- 
ing in  this  case;  where  the  bonds  themselves  were  at  their  own- 
er's foreign  domicile.  *  *  * 

"  (Page  8.)  The  attitude  of  a  holder  of  shares  of  capital  stock 
is  quite  other  than  that  of  a  holder  of  bonds,  towards  the  cor- 
poration which  issued  them.  Wh'ile  the  bondholders  are  simply 
creditors,  whose  concern  with  the  corporation  is  limited  to  the 
fulfillment  of  its  particular  obligation,  the  shareholders  are  per- 
sons who  are  interested  in  the  operation  of  the  corporate  prop- 
erty and  franchises  and  their  shares  actually  represent  undivided 
interests  in  the  corporate  enterprise." 


150  N.  Y.  27  205 

Held,  that  the  transfer  of  the  bonds  was  not  taxable,  but  that 
the  transfer  of  the  stock  was. 

Neither  bonds  nor  stock  held  by  a  non-resident  decedent  are  taxable 
if  transferred  since  the  amendment  by  chapter  732,  Laws  of  1911,  in  effect 
July  21,  1911;  subdivisions  2  and  4  of  §  220,  and  §  243.  Vide  opinion  of 
Comptroller,  dated  May  13,  1913,  2  State  Department  Reports,  501,  opin- 
ion quoted,  page  119. 

As  to  present  law  re  non-resident  estates  vide  page  133. 

Vide  Matter  of  Embury,  19  App.  Div.  214-217,  affirmed,  without  opinion, 
154  N.  Y.  746;  Matter  of  Fitch,  160  N.  Y.  87-90;  Matter  of  Pullman,  46 
App.  Div.  574-577;  Matter  of  Crerar,  56  App.  Div.  479-482;  Matter  of 
Preston,  75  App.  Div.250;  Matter  of  Gibbes,  84  App.  Div.  510-513,  affirmed, 
without  opinion,  176  N.  Y.  565;  Matter  of  Schermerhorn,  50  Misc.  233; 
Matter  of  Bushnell,  73  App.  Div.  325,  affirmed,  without  opinion,  172  N.  Y. 
649;  Matter  of  Clinch,  180  N.  Y.  300;  Matter  of  Daly,  100  App.  Div. 
373-380,  affirmed,  without  opinion,  in  182  N.  Y.  524;  Matter  of  Cooley, 
186  N.  Y.  220-229;  Beers  ».  Glynn,  211  U.  S.  477-484;  sustaining  Matter  of 
Merriam,  141  N.  Y.  479;  Matter  of  Fearing,  200  N.  Y.  340-344;  Matter  of 
Ames,  141  N.  Y.  Supp.  793-795. 


1896. 

MATTER  OF  AUGUSTUS  WHITING,  150  N.  Y.  27. 

Testator,  a  resident  of  Newport,  Rhode  Island,  died  there  on 
the  23d  of  July,  1894,  leaving  a  will  by  which  he  gave  his  entire 
estate  in  trust  for  his  infant  daughter.  At  the  time  of  his  death 
he  had  money  on  deposit  in  a  bank  in  this  state,  and  owned  cer- 
tain bonds  and  certificates  of  stock  that  were  found  in  a  box 
rented  by  him  in  a  safe  deposit  vault  in  this  state.  The  stocks 
and  bonds  were  issued  partly  by  domestic  and  partly  by  foreign 
corporations;  and  there  were  also  bonds  of  the  United  States. 

The  court  say,  page  30:  "When  the  design  of  the  legislature 
is  to  tax  the  transfer  of  everything  that  it  has  power  to  tax, 
there  is  no  inconsistency  in  taxing  in  one  form  if  another  is  not 
available.  Indeed,  perfect  consistency  is  not  always  practicable 
in  a  scheme  of  taxation  that  is  intended  to  let  nothing  escape 
that  can  be  owned  or  transferred.  Thus  the  legislature  in- 
tended, as  I  think,  to  repeal  the  maxim  mobilia  personam  sequ- 
untur,  so  far  as  it  was  an  obstacle,  and  to  leave  it  unchanged, 
so  far  as  it  was  an  aid,  to  the  imposition  of  a  transfer  tax  upon 
all  property  in  any  respect  subject  to  the  laws  of  this  state.  I 
think  this  intention  plainly  appears  from  the  history  of  legisla- 
tion upon  the  subject,  the  decisions  of  the  courts,  some  of  them 
in  effect  repealed,  and  from  the  sweeping  language  of  the  statute, 


206  THE    COURT   OF   APPEALS   DECISIONS 

which  subjects  everything  that  can  be  owned  in  this  state  to  a 
succession  tax,  except  so  far  as  expressly  exempted.  The  legisla- 
ture possessed  and  exercised  the  power  to  employ  the  maxim 
when  necessary,  and  to  disregard  it  when  necessary  to  attain 
that  object.  That  dominant  purpose  is  the  key  to  the  construc- 
tion of  the  act,  and  it  should  not  be  thwarted  by  the  conserva- 
tism of  the  courts,  even  if,  in  order  to  embrace  all  kinds  of 
property,  it  is  necessary  to  make  it  so  pliable  in  application  as  to 
conform  to  all  methods  of  doing  business  and  all  ways  of  holding 
property." 

Held,  that  the  stock  of  the  foreign  corporations  was  not  tax- 
able, that  the  stock  of  the  domestic  corporations  was  taxable, 
that  the  bonds  physically  present  in  this  state  were  taxable, 
except  the  United  States  bonds  for  (page  31)  "although  the 
state  may  have  the  power  to  impose  a  succession  tax  upon 
United  States  bonds,  it  has  not  yet  done  so." 

For  present  law,  vide  supra,  page  133. 

Vide  Matter  of  Bronson,  150  N.  Y.  1;  Matter  of  Sherman,  153  N.  Y. 
1-5;  Matter  of  Clinch,  180  N.  Y.  300;  Matter  of  Fearing,  200  N.  Y.  340- 
345;  etiam  subdivision  2  of  §§  220  and  243. 

United  States  bonds  held  to  be  taxable  under  amendment  of  chapter  88, 
Laws  of  1898,  in  effect  March  21,  1898;  Matter  of  Plummer,  161  N.  Y. 
631,  sustained  sub  nom.  Plummer  v.  Coler,  178  U.  S.  115. 

Matter  of  Tiffany,  143  App.  Div.  327-328,  affirmed,  on  opinion  of 
McLaughlin,  J.,  below,  202  N.  Y.  550. 

Matter  of  Blackstone,  69  App.  Div.  127-129,  affirmed,  without  opinion, 
171  N.  Y.  682,  and  sustained  in  188  U.  S.  189,  sub  nom.  Blackstone  v. 
Miller;  Matter  of  Gibbes,  84  App.  Div.  510-513,  affirmed,  without  opinion, 
176  N.  Y.  565;  Matter  of  Coogan,  27  Misc.  563-565,  affirmed,  without 
opinion,  162  N.  Y.  613;  Matter  of  Schermerhorn,  50  Misc.  233-234;  Matter 
of  Ames,  141  N.  Y.  Supp.  793-795. 

As  to  transfer  of  stock  vide  §  227  and  Dunham  v.  City  Trust  Company  of 
New  York,  115  App.  584-587,  affirmed,  without  opinion,  193  N.  Y.  642. 

As  to  leasehold  of  New  York  premises  held  by  a  non-resident  decedent 
who  died  prior  to  1911  amendment  vide  Matter  of  Ilosenbaum,  N.  Y.  Law 
Journal,  August  7, 1913,  opinion  quoted,  page  730. 


1896. 

MATTER  OF  GEORGE  MORGAN,  150  N.  Y.  36. 

The  testator  died  December  17,  1894,  a  resident  of  Lakewood, 
New  Jersey.  His  personal  property  consisted  of  stocks  and 
bonds  of  foreign  and  domestic  corporations,  mortgages  upon 
lands  in  this  state,  and  moneys  deposited  in  banks  in  this  state. 


150  N.  Y.  37  207 

The  securities  were  habitually  kept  by  the  decedent  in  a  safe 
deposit  vault  in  this  state,  in  charge  of  an  agent  in  this  state. 
There  is  no  other  difference  between  this  and  the  Whiting 
(150  N.  Y.  1)  case  than  that,  in  the  present  case,  it  appears  that 
some  of  the  bonds  of  the  foreign  corporation,  which  were  owned 
by  the  non-resident  decedent,  were  registered. 

Held,  the  stock  of  foreign  corporations  was  not  taxable,  but 
the  bonds,  both  registered  and  unregistered,  were  taxable. 

Vide  subdivision  2  of  §  220  and  §  243.  For  present  law  vide  supra, 
page  133. 

Matter  of  Clinch,  180  N.  Y.  300-302;  Matter  of  Gibbes,  84  App.  Div. 
510-513,  affirmed,  without  opinion,  176  N.  Y.  565;  Matter  of  Schermer- 
horn,  50  Misc.  233-234. 


1896. 

MATTER  OF  JOHN  F.  HOUDAYER,  150  N.  Y.  37,  writ  of 

error  dismissed  in  175  U.  S.  32,  sub  nom.  Scudder  v. 

Comptroller. 

Testator  died  May  21,  1895,  a  resident  of  New  Jersey.  At 
his  death  he  had  money  on  deposit  in  a  New  York  trust  company. 

The  Court  of  Appeals  say,  page  40:  "If  he  had  deposited  in 
specie,  to  be  returned  in  specie,  there  can  be  no  doubt  that  the 
money  would  be  property  in  this  state  subject  to  taxation.  But, 
instead,  he  did  as  business  men  generally  do,  deposited  his  money 
in  the  usual  way,  knowing  that,  not  the  same,  but  the  equiva- 
lent, would  be  returned  to  him  upon  demand.  While  the  rela- 
tion of  debtor  and  creditor  technically  existed,  practically  he 
had  his  money  in  the  bank  and  could  come  and  get  it  when  he 
wanted  it.  It  was  an  investment  in  this  state  subject  to  attach- 
ment by  creditors.  If  not  voluntarily  repaid,  he  could  compel 
payment  through  the  courts  of  this  state.  The  depositary  was 
a  resident  corporation,  and  the  receiving  and  retaining  of  the 
money  were  corporate  acts  in  this  state.  Its  repayment  would 
be  a  corporate  act  in  this  state.  Every  right  springing  from  the 
deposit  was  created  by  the  laws  of  this  state.  Every  act  out  of 
which  those  rights  arose  was  done  in  this  state.  In  order  to 
enforce  those  rights,  it  was  necessary  for  him  to  come  into  this 
state.  Conceding  that  the  deposit  was  a  debt;  conceding  that 
it  was  intangible,  still  it  was  property  in  this  state  for  all  prac- 
tical purposes,  and  in  every  reasonable  sense  within  the  mean- 
ing of  the  Transfer  Tax  Act." 


208  THE   COURT  OF   APPEALS   DECISIONS 

The  United  States  Supreme  Court  say:  "No  mention  of  the 
Constitution  of  the  United  States,  or  of  any  provision  thereof, 
by  the  plaintiff  in  error,  or  by  the  court,  is  to  be  found  at  any 
stage  of  the  case  while  it  was  pending  in  the  courts  of  the  state 
of  New  York;  and  it  is  impossible,  upon  this  record,  to  avoid  the 
conclusion  that  it  never  occurred  to  the  plaintiff  in  error  to  raise 
a  Federal  question  until  after  the  case  had  been  finally  decided 
against  him  in  the  highest  court  of  the  state. 

"In  order  to  give  this  court  jurisdiction  of  a  writ  of  error  to 
review  a  judgment  which  the  highest  court  of  a  state  has  ren- 
dered in  favor  of  the  validity  of  a  statute  of  or  an  authority 
exercised  under  a  state,  the  validity  of  the  statute  or  authority 
must  have  been  'drawn  in  question'  'on  the  ground  of  their 
being  repugnant  to  the  Constitution,  laws  or  treaties  of  the 
United  States.'  When  no  such  ground  has  been  presented  to 
or  considered  by  the  Courts  of  the  State,  it  cannot  be  said  that 
those  courts  have  disregarded  the  Constitution  of  the  United 
States,  and  this  court  has  no  jurisdiction.  Rev.  Stat.,  §  709; 
Murdock  v.  Memphis?,  20  Wall.  590,  633,  634;  Levy  v.  Superior 
Court  of  San  Francisco,  167  U.  S.  175;  Miller  v.  Cornwall  Rail- 
road, 168  U.  S.  131;  Columbia  Water  Power  Co.  v.  Columbia 
Railway,  172  U.  S.  475,  488,  and  cases  there  cited."  x 

Vide  subdivision  2  of  §§  220  and  243;  Matter  of  Blackstone,  171  N.  Y. 
682,  affirmed  in  188  U.  S.  189,  sub  nom.  Blackstone  v.  Miller;  Matter  of 
Lord,  111  App.  Div.  152-157,  affirmed,  without  opinion,  186  N.  Y.  549, 
sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn;  Matter  of  Gordon, 
186  N.  Y.  471;  Matter  of  Gibbes,  84  App.  Div.  510-513,  affirmed,  without 
opinion,  176  N.  Y.  565;  Matter  of  Bentley,  31  Misc.  656-658;  Matter  of 
Probest,  40  Misc.  431-432;  Matter  of  Burden,  47  Misc.  329-330. 

1  Stickney  v.  Kelsey,  209  U.  S.  419,  dismissing  writ  of  error  from  Matter 
of  Stickney,  185  N.  Y.  107;  Tilt  v.  Kelsey,  207  U.  S.  43,  reversing  Matter  of 
Tilt,  182  N.  Y.  557. 


1898. 

MATTER  OF  DAVID  F.  KIMBERLY,  150  N.  Y.  90. 

Testator  died  June  29,  1895.  The  court  say,  page  93:  "The 
sole  question  involved  relates  to  the  construction  of  the  tes- 
tator's will,  and  is  whether  the  bequest  was  to  the  testator's 
sisters  jointly,  or  whether  they  took  the  property  as  tenants  in 
common.  That  upon  the  death  of  one  of  the  legatees  before  the 
decease  of  the  testator,  the  legacy  lapsed  if  it  was  to  the  legatees 
as  tenants  in  common,  is  not  denied  by  either  party.  The  courts 


151  N.  Y.  282  209 

below  have  held  that  the  legatees  took  as  tenants  in  common, 
and,  hence,  that  as  to  one-third  of  the  testator's  estate,  he  died 
intestate. 

"The  appellant's  contention  is  that  the  legatees  took  jointly, 
and  if  not,  that  the  bequest  was  to  the  sisters  of  the  decedent  as 
a  class,  and  consequently  there  was  no  lapse  in  the  disposition  by 
reason  of  the  death  of  one  of  the  legatees." 

The  will  provided,  inter  alia:  "I  give,  devise  and  bequeath  all 
my  estate,  real  and  personal,  of  whatsoever  kind  and  where- 
soever situate,  unto  my  three  sisters,  Mary,  Annie  and  Louisa." 
Mary  died  prior  to  the  death  of  the  testator.  The  appraiser 
construed  the  will  and  fixed  the.  tax  upon  the  theory  that  the 
testator  died  intestate  as  to  one-third  of  his  estate,  by  reason 
of  the  pre-decease  of  Mary  Kimberly;  that  Annie  and  Louisa 
each  took  one-third  of  Mary's  share  as  next  of  kin,  and  that  the 
remaining  one-third  passed  to  nine  nephews  and  nieces  of  the 
decedent  as  their  share  of  the  estate  which  was  undisposed  of  by 
the  will. 

The  appraiser's  construction  was  confirmed. 

Matter  of  Eldridge,  29  Misc.  734.  The  appraiser  had  to  have  in  this  case, 
it  is  evident,  a  knowledge  of  law  in  order  to  perform  his  duty  of  appraising 
the  fair  market  value  of  the  property.  The  duties  of  the  appraiser  are  set 
forth  in  §  230;  People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35-39. 

Vide  §  29  of  Decedent  Estate  Law  as  amended  by  Laws  1912,  Chap.  384, 
post,  page  540 


1897. 

AMHERST  COLLEGE  v.  RITCH,  151  N.  Y.  282. 

Daniel  B.  Fayerweather  died  November  15,  1890,  leaving 
an  estate  of  several  millions,  and  this  action  involved  the  con- 
struction of  his  will.  A  question  was  raised  whether  the  adjudi- 
cation by  the  surrogate  in  proceedings  under  the  Collateral 
Inheritance  Act  was  a  bar  to  the  present  action.  The  court 
say,  page  342:  "This  was  a  special  proceeding  instituted  by  the 
comptroller  of  the  city  and  county  of  New  York  with  the  sole 
object  of  ascertaining  what  amount  of  property,  passing  under 
Mr.  Fayerweather's  will,  was  subject  to  taxation  and  to  fix  the 
amount  of  the  tax.  The  decree  of  the  surrogate  should  be  con- 
strued solely  with  reference  to  that  object  and,  as  thus  con- 
strued, the  adjudication  was  that,  for  the  purposes  of  taxation 
under  the  act  in  question,  a  certain  amount  of  property  passed 
to  the  residuary  legatees  under  the  will.  Legitimate  inquiry 
14 


210  THE   COURT   OF   APPEALS   DECISIONS 

necessarily  stopped  at  that  point,  for  it  was  immaterial,  so  far 
as  that  statute  was  concerned,  whether  the  fund  became  im- 
pressed with  a  trust  after  it  reached  the  residuary  legatees,  as  the 
tax  would  be  the  same  whether  it  did  or  not.  They  took  the 
legal  title,  as  we  have  held,  and  hence  their  legacy  was  subject 
to  taxation  without  reference  to  what  it  became  their  duty  to  do 
with  it.  The  adjudication  was  necessarily  limited  to  the  subject 
of  taxation,  and  if  conclusive  at  all  as  a  bar,  it  was  not  conclusive 
upon  the  rights  of  the  parties  arising  from  matters  outside  of  the 
will.  The  surrogate  was  acting  simply  as  an  assessing  officer,  and 
represented  the  state  for  those  purposes.  *  *  * 

(Page  343.)    "The  adjudication  of  the  surrogate  was  binding 
upon  the  question  of  taxation  only." 

Vide  Matter  of  Fayerweather,  143  N.  Y.  114. 

As  to  special  proceeding  vide  §  3334  of  Code  of  Civ.  Proc.;  Morgan  v. 
Warner,  45  App.  Div.  424-426,  affirmed,  on  opinion  below,  162  N.  Y.  612. 


1896. 

MATTER  OF  GEORGE  KEMP,  161  N.  Y.  619,  affirms,  on 
opinion  below,  7  App.  Div.  609. 

Testator  died  a  resident  November  23,  1893.  An  inspection 
of  the  printed  papers  on  appeal  shows  that  at  the  time  of  his 
death  testator  was  erecting  a  large  building  upon  real  property 
owned  by  him.  He  had  contracts  with  builders  and  for  materials 
which  contracts  provided  for  payments  to  be  made  for  such 
building  and  materials  from  time  to  time  as  the  building  should 
be  completed.  At  the  time  of  testator's  death  there  was  unpaid 
upon  said  contracts  the  sum  of  $251,051.90,  said  amount  not 
being  then  due  or  earned.  The  surrogate  said:  "In  refusing  to 
deduct  from  the  amount  of  personal  property  the  sum  paid  by 
the  executors  in  carrying  out  the  contract  made  by  the  decedent 
for  the  erection  of  buildings  upon  real  property  owned  by  him, 
the  appraiser  acted  properly."  The  order  of  the  surrogate  was 
affirmed  as  to  this  ruling.1 

The  surrogate  had  appointed  in  this  transfer  tax  proceeding 
a  special  guardian  for  two  infants.2  The  Appellate  Division  say : 
"This  case  is  clearly  within  the  principles  laid  down  in  The 
Matter  of  Baudouine  (5  App.  Div.  622)  and  in  The  Matter  of 
Livingston  (1  id.  568).  Indeed,  the  principle  of  the  Livingston 
case  is  more  decisive  than  that  enunciated  in  the  Baudouine 


152  N.  Y.  93  211 

case.  *  *  *  The  only  error  we  find  in  this  record  is  the 
allowance  of  twenty-five  dollars  to  the  special  guardian.  We 
think  that  the  appointment  of  a  special  guardian  was  wholly 
unnecessary  upon  the  facts  in  this  case,  and  that  the  rule  laid 
down  in  the  Post  case  (Matter  of  Post,  5  App.  Div.  113)  on  that 
subject  is  applicable.  The  order  should,  therefore,  be  modified 
by  striking  out  the  allowance  of  twenty-five  dollars  to  the  special 
guardian,  and  as  modified,  affirmed,  without  costs." 

1  Matter  of  Amsinck,  N.  Y.  Law  Journal,  February  21,  1913,  opinion 
quoted  page  657. 

2  As  to  special  guardian  vide  §  231  which  provides: 

"The  surrogate  shall  immediately  give  notice,  upon  the  determina- 
tion by  him  as  to  the  value  of  any  estate  which  is  taxable  under  this  article, 
and  of  the  tax  to  which  it  is  liable,  to  all  persons  known  to  be  interested 
therein.  *  *  * 

"If,  however,  it  appear  at  any  stage  of  the  proceedings  that  any  of  such 
persons  known  to  be  interested  m  the  estate  is  an  infant  or  an  incompetent, 
the  surrogate  may,  if  the  interest  of  such  infant  or  incompetent  is  presently 
involved  and  is  adverse  to  that  of  any  of  the  other  persons  interested  therein, 
appoint  a  special  guardian  of  such  infant;  but  nothing  hi  this  provision 
shall  affect  the  right  of  an  infant  over  fourteen  years  of  age  or  of  any  one  on 
behalf  of  an  infant  under  fourteen  years  of  age  to  nominate  and  apply 
for  the  appointment  of  a  special  guardian  for  such  inf ant  at  any  stage  of  the 
proceedings." 

Vide  etiam  Matter  of  Jones,  54  Misc.  202-206. 


1897. 

MATTER  OF  SAMUEL  WESTURN,  152  N.  Y.  93. 

Intestate  died  May  22,  1890.  The  court  say,  page  99:  "The 
litigation  over  the  probate  of  the  will  of  the  decedent  was  finally 
terminated  by  the  decision  of  this  court,  May  21,  1895,  in  favor 
of  the  contestants.  It  was  not  until  the  final  determination  of 
the  controversy,  by  the  judgment  of  this  court,  that  it  could  be 
known  whether  the  property  of  the  decedent  passed  under  his 
will  or  as  in  case  of  intestacy,  and,  until  this  fact  was  ascer- 
tained, it  was  impracticable  to  proceed  to  fix  the  transfer  tax 
under  the  act  of  1892,  or  the  prior  statutes,  since  the  ascer- 
tainment of  the  persons  entitled  to  the  property  of  a  decedent 
must  precede  the  imposition  of  any  tax.  *  *  * 

"  (Page  100.)  Letters  of  administration  were  issued  June  3, 
1895.  The  surrogate,  on  July  6,  1895,  on  his  own  motion, 
appointed  an  appraiser."  The  estate  contended  that  the  sur- 
rogate had  no  power  to  appoint  an  appraiser  or  to  fix  the  tax 


212  THE   COURT   OF  APPEALS   DECISIONS 

until  the  fact  whether  there  were  claims  against  the  estate  had 
been  ascertained  in  the  usual  course.  The  court  say,  page  101 : 
"When  an  estate  is  in  the  ordinary  course  of  administration, 
it  would  seem  to  be  prudent  and  reasonable  for  the  surrogate  to 
take  notice  of  the  statutory  system  for  the  settlement  of  estates, 
and  to  defer  the  appointment  of  an  appraiser  for  the  period 
necessary  to  enable  the  executor  or  administrator  to  advertise 
for  claims  and  ascertain  whether  there  are  any  creditors." 

The  court  say,  page  100:  "It  is  plainly  inferable  from  the 
sixth  section  (now  §  225)  of  the  act  that  the  debts  of  the  dece- 
dent are  to  be  deducted  in  arriving  at  the  valuation  of  the  prop- 
erty and  in  fixing  the  tax.  That  section  authorizes  a  propor- 
tionate amount  of  a  tax  to  be  refunded  in  case  debts  against  the 
estate  shall  be  proven  after  the  tax  shall  have  been  paid." 

The  estate  also  contended  that  the  surrogate  erred  in  refusing 
to  deduct  from  the  valuation  of  the  estate  the  sum  expended  by 
them  in  the  litigation  over  the  will.  The  court  say,  page  102: 
"We  think  the  surrogate  properly  disallowed  this  item.  It  was 
not  a  claim  existing  against  the  decedent  or  his  property.  The 
tax  imposed  by  the  statute  is  upon  the  interests  transferred  by 
will  or  under  the  intestate  laws  of  the  state.  The  devolution  of 
the  property  and  the  right  of  the  state  have  their  origin  at  the 
same  moment  of  time.  The  ascertainment  of  the  value  of  the 
taxable  interest  and  the  fixing  of  the  tax  necessarily  takes  place 
subsequent  to  the  death.  But  the  guide  is  the  value  at  the  time 
of  the  death,  when  the  interests  were  acquired.  The  fact  that 
the  appellants  were  put  to  expense  in  asserting  their  rights  and 
were  embroiled  in  expensive  litigation  to  obtain  them,  was  their 
misfortune.  It  did  not  diminish  the  value  of  the  interests  which 
devolved  upon  them  on  Westurn's  death.  It  was  a  loss,  but 
a  loss  to  their  general  estate.  It  did  not  prevent  them  receiving 
the  whole  interest  transmitted  to  them.  The  fact  that  the  court 
charged  certain  costs  and  allowances  in  their  favor  upon  the 
estate  did  not  change  the  situation.  It  was  practically  a  charge 
upon  their  own  property  for  the  benefit  of  their  attorneys." 

A  note  belonging  to  decedent  was  in  litigation,  and  it  was  held 
that  it  was  error  for  the  surrogate  to  include  in  the  appraisement 
the  amount  of  the  note,  the  court  saying,  page  103:  "It  was, 
we  think,  the  plain  duty  of  the  surrogate  to  have  excluded  this 
claim  from  valuation  at  the  time,  reserving  it  for  future  appraise- 
ment in  case  the  administrators  succeeded  in  collecting  it. 

"We  are  also  of  opinion  that  the  surrogate  should  have  per- 


152  N.   Y.  93  213 

mitted  the  appellants  to  have  filed  the  additional  allegations  in 
respect  to  the  claim  of  Mary  Clark,  that  she  and  her  brothers 
and  sisters  were  the  sole  heirs  and  next  of  kin  of  Westurn,  and 
to  have  received  and  considered  the  proofs  offered  to  show  that 
a  litigation  had  been  commenced  in  the  Surrogate's  Court  to 
revoke  the  letters  of  administration  granted  June  3,  1895,  based 
on  this  claim.  It  is  not  suggested  that  the  proceeding  was  col- 
lusive. The  application  to  the  surrogate  hi  behalf  of  the  persons 
contesting  the  claim  of  the  appellants  to  be  the  heirs  and  next 
of  kin  of  Westurn,  was  based  upon  positive  statements  under 
oath.  If  their  claim  is  well  founded  it  is  manifest  that  the  tax 
could  not  be  assessed  against  the  appellants.  They  would  in  the 
case  supposed  have  no  taxable  interest.  The  conflicting  claims 
of  the  appellants  and  of  Mary  Clark  and  those  she  represented 
involved  a  controversy  which  affected  the  title  to  the  whole 
estate.  The  surrogate  should  either  have  postponed  the  appraise- 
ment until  the  litigation  was  determined,  or  at  least  should  have 
received  and  considered  the  evidence.  It  is  not  necessary  now 
to  determine,  whether  as  incident  to  his  jurisdiction  in  tax  pro- 
ceedings under  the  statute,  he  could  determine  which  set  of 
claimants  was  entitled  to  the  estate.  It  is  claimed  that  the  sur- 
rogate properly  refused  to  permit  the  new  allegations  based  on 
the  claim  of  Mary  Clark  to  be  filed,  since  the  sixty  days  had  ex- 
pired during  which  an  appeal  must  be  taken,  and  for  the  further 
reason  that  the  statute  requires  the  notice  of  appeal  to  specify 
the  grounds  of  appeal,  and  that  there  was  no  reference  in  the 
notice  served  by  the  appellants  to  the  claim  of  Mary  Clark. 

"The  appeal  to  the  surrogate,  given  by  sec.  13  of  the  act  of 
1892,  is  in  the  nature  of  an  application  for  a  rehearing  upon  which 
new  evidence  may  be  taken,  bearing  upon  the  questions  in- 
volved. The  requirement  that  the  notice  of  appeal  shall  specify 
the  grounds  of  appeal,  implies  that  in  the  prior  proceedings,  ques- 
tions had  been  raised  and  decided,  upon  which  error  could  be 
assigned.  But  the  new  fact  in  the  case,  viz.,  the  claim  of  Mary 
Clark,  was  not  disclosed  until  after  the  appeal  was  taken,  and 
after  the  expiration  of  sixty  days  from  September  19,  1895, 
when  the  original  order  of  the  surrogate  fixing  the  tax  was  made. 

"We  think  the  statute  ought  to  be  construed  so  as  to  permit 
the  raising  upon  appeal,  of  a  question  which  did  not  enter  into 
the  original  determination,  and  which  was  first  made  known  after 
the  appeal  had  been  taken,  and  after  the  expiration  of  the  sixty 
days.  The  surrogate  had  j  urisdiction  of  the  appeal  by  the  notice 


214        THE  COURT  OF  APPEALS  DECISIONS 

actually  given,  and  it  would  be  an  unwise  construction  of  the  act 
to  limit  the  hearing  so  as  to  exclude  the  consideration  of  a  new 
question  subsequently  arising,  on  the  ground  that  it  was  not 
specified  in  the  notice  of  appeal." 

Vide  Matter  of  Thrall,  30  App.  Div.  at  page  274,  reversed  in  157  N.  Y. 
46,  but  not  as  to  question  of  deduction;  Matter  of  Gihon,  169  N.  Y.  443- 
445;  Matter  of  Sanford,  66  Misc.  395. 

Vide  §§  223  and  230.  Etiam  Matter  of  Gihon,  169  N.  Y.  443-445;  Mat- 
ter of  Ramsdill,  190  N.  Y.  492-495;  Matter  of  Grosvenor,  124  App.  Div. 
331-333,  affirmed,  without  opinion,  193  N.  Y.  652;  Matter  of  Brundage, 
31  App.  Div.  348;  Matter  of  O'Donohue,  44  App.  Div.  186;  Matter  of 
Pullman,  46  App.  Div.  574,  577;  Matter  of  Rice,  56  App.  Div.  253-257; 
Matter  of  Rogers,  71  App.  Div.  461,  affirmed,  on  opinion  below,  172 
N.  Y.  617;  Matter  of  Maresi,  74  App.  Div.  76-80;  Matter  of  Dimon,  82  App. 
Div.  107-111;  Matter  of  Skinner,  106  App.  Div.  217-218;  Matter  of  Kelsey 
v.  Church,  112  App.  Div.  408-409;  Matter  of  Berry,  23  Misc.  230-231; 
Matter  of  Purdy,  24  Misc.  301-303;  Matter  of  Becker,  26  Misc.  633-635; 
Matter  of  Kelly,  29  Misc.  169-170;  Matter  of  Bentley,  31  Misc.  656-657; 
Matter  of  Morgan,  36  Misc.  753;  Matter  of  Thomas,  39  Misc.  223-225; 
Matter  of  Marks,  40  Misc.  507-509. 


1897. 

MATTER  OF  GEORGE  B.  SHERMAN,  153  N.  Y.  1. 

Testator  died  in  1896,  and  the  question  arose  as  to  whether  the 
act  of  1892  exempted  United  States  bonds.  In  Wallace  v.  Myers 
(38  Fed.  Rep.  184),  it  was  held  that  the  inclusion  of  United  States 
bonds  in  the  valuation  under  the  laws  for  the  taxation  of  inher- 
itances, for  the  purpose  of  ascertaining  the  tax,  was  a  valid  ex- 
ercise of  the  legislative  power  of  a  state,  and  did  not  constitute 
a  taxation  of  Federal  securities.  The  case  of  Wallace  v.  Myers 
was  governed  by  the  act  of  1887,  chap.  713. 

The  court  say,  page  5:  "By  the  first  section  of  that  act  the 
tax  was  imposed  upon  'all  property'  passing  by  will  or  by  the 
intestate  laws  of  the  state.  There  was  no  limitation  of  this 
language  in  the  subsequent  sections  of  the  act,  and  it  was  held, 
as  we  think  properly,  that  United  States  bonds  were  to  be  valued 
in  fixing  the  tax.  The  act  of  1892  contains  a  new  provision,  not 
found  in  the  prior  acts.  The  22d  section  declares  that  the 
words  'estate'  and  'property'  as  used  in  the  act,  'shall  include 
all  property  or  interest  therein,  whether  situated  within  or 
without  this  state,  over  which  this  state  has  any  jurisdiction 
for  the  purpose  of  taxation.' 


153  N.  Y.  1  215 

"We  had  occasion,  in  the  Matter  of  Whiting  (150  N.  Y.  27), 
to  consider  the  application  of  this  clause  of  §  22  of  the  act  of 
1892  to  a  case  of  United  States  bonds  owned  by  a  non-resident 
decedent  on  deposit  at  the  time  of  his  death  with  other  securities 
in  the  vaults  of  a  safe  deposit  company  in  the  city  of  New  York. 
The  objection  was  taken  that  they  could  not  be  included  in  the 
valuation  under  the  act  of  1892,  and  this  court  sustained  the  ob- 
jection on  the  ground  that  the  bonds,  being  property  not 
subject  to  the  taxing  power  of  the  state,  were  exempt  from 
valuation  under  the  definition  of  property  hi  §  22.  It  was  prob- 
ably the  primary  purpose  of  this  definition  to  exclude  any  in- 
ference from  the  generality  of  the  words  used  in  the  first  section 
of  the  act,  that  the  valuation  to  be  made  should  include  the  real 
property  of  resident  decedents  situated  outside  of  the  state. 
(See  In  re  Swift,  137  N.  Y.  77.)  But  the  language  extends  to  all 
property  not  within  the  taxing  power  of  the  state,  and  Federal 
securities  are  plainly  within  the  definition.  It  is  the  jurisdiction 
of  the  state  to  subject  property  to  taxation  under  its  general 
taxing  power,  and  not  whether  the  jurisdiction  has  been  exer- 
cised, which  is  the  test  of  exemption  under  §  22  of  the  act  of 
1892.  Property  of  every  description  passing  by  will  or  under  the 
Statutes  of  Descents  or  Distributions  which  is  subject  to  the 
taxing  power  of  the  state,  is  to  be  valued  under  the  act,  irre- 
spective of  the  fact  whether  it  has  or  has  not  been  subjected  to 
taxation  under  existing  laws.  (Matter  of  Knoedler,  140  N.  Y. 
377.)  But  we  are  of  opinion  that  the  United  States  bonds  were 
properly  excluded  from  the  valuation  of  the  decedent's  estate  by 
the  surrogate  by  force  of  §  22  of  the  act  of  1892." 

Since  amendment  by  chapter  88,  Laws  of  1898,  in  effect  March  21,  1898, 
the  transfer  of  United  States  bonds  has  been  taxable.  Matter  of  Plummer, 

161  N.  Y.  631,  sustained  in  178  U.  S.  115,  sub  nom.  Plummer  v.  Coler.    In 
estates  of  non-residents  it  was  held  that  United  States  bonds  were  not 
taxable  even  though  physically  within  the  State  at  tune  of  decedent's 
death.    Matter  of  Schermerhorn,  50  Misc.  233,  a  case  in  which  the  decedent 
died  in  1891.    Subsequent  to  1898  and  until  the  amendment  by  chapter  732, 
Laws  of  1911,  in  effect  July  21,  1911,  the  transfer  of  United  States  bonds 
hi  non-resident  estates  was  taxable  if  the  bonds  were  physically  kept  within 
the  State.     They  have  not  been  taxable  in  non-resident  estates  since  the 
1911  amendment.    §§  220  and  243. 

Matter  of  Delano,  176  N.  Y.  486-492,  sustained  in  205  U.  S.  466,  sub 
nom.  Chanler  v.  Kelsey ;  Matter  of  Smith,  150  App.  Div.  805-807;  Matter  of 
Purdy,  24  Misc.  301-302;  Matter  Coogan,  27  Misc.  563-565,  affirmed  in 

162  N.  Y.  613. 


L'Ki  THE    COURT   OF   APPEALS   DECISIONS 

1897. 

MATTER  OF  CATHERINE  L.  LANGDON,  163  N.  Y.  6. 

Catherine  L.  Langdon  died  on  December  25,  1883,  and  in  her 
will  her  residuary  estate  was  devised  and  bequeathed  to  her 
husband,  Walter  Langdon,  to  be  held,  used,  enjoyed  and  dis- 
posed of  by  him  at  his  pleasure  so  long  as  he  should  live  and  with 
the  right  to  dispose  of  the  same  upon  his  death  by  will,  or  so 
much  thereof  as  should  then  remain.  It  was  also  provided  that 
such  residue,  or  so  much  thereof  as  should  remain  at  his  death 
undisposed  of,  should  then  pass  to  two  legatees  named  or  to  the 
survivor. 

Walter  Langdon,  the  husband,  died  on  the  16th  of  September, 
1894,  leaving  a  will  which  was  admitted  to  probate  December  4, 
1894,  and  it  contained  the  following  provision  with  respect  to 
the  property  bequeathed  to  him  for  life  by  the  will  of  his  wife 
with  power  of  disposition  by  will : 

"First.  I  direct  my  executors  to  keep  the  estate  of  my  de- 
ceased wife  separate  from  my  estate,  and  to  distribute  her 
estate  according  to  the  provisions  of  her  last  will  and  testament, 
by  delivering  the  same  to  the  executors  named  in  her  will  for 
that  purpose." 

The  court  say,  page  9:  "The  husband  did  not  in  any  fair  or 
substantial  sense  exercise  the  power  of  disposition  conferred 
upon  him  by  his  wife.  The  provision  of  his  will  above  quoted 
was  in  fact  a  relinquishment  or  renunciation  of  that  right.  It 
was  a  declaration  of  his  purpose  not  to  exercise  the  power,  but  to 
allow  the  property  to  pass  under  the  will  of  the  wife.  *  *  * 
The  property  passed  directly  under  the  will  of  the  wife,  and  not 
through  the  medium  of  a  power  in  the  husband,  and  as  the  will 
antedated  the  law,  the  statute  has  no  application  to  the  case." 

Vide  subdivision  6,  §  220;  Matter  of  Harbeck,  161  N.  Y.  211-221;  Mat- 
ter of  Pell,  171  N.  Y.  48;  Matter  of  Lansing,  182  N.  Y.  238;  Matter  of 
Ripley,  122  App.  Div.  419-423,  affirmed,  per  curiam,  192  N.  Y.  536; 
People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402;  Matter  of  Hitchins,  43 
Misc.  485-493,  affirmed,  without  opinion,  181  N.  Y.  553. 


1897. 

MATTER  OF  SARAH  H.  GREEN,  163  N.  Y.  223. 

Testatrix  died  May  21,  1893.    On  February  14, 1889,  she  had 
delivered  certain  of  her  property  to  a  trustee  under  a  trust  deed 


153  N.  Y.  223  217 

upon  the  following  conditions  and  for  the  following  uses.  1.  To 
collect  the  income  and  apply  the  same  to  her  use  during  her  life. 
2.  After  her  death,  to  divide  and  pay  over  the  same  and  the  pro- 
ceeds among  her  three  nieces,  who  were  named,  the  issue  of 
either  who  might  die  before  the  donor  to  receive  the  share  to 
which  the  mother  would  be  entitled  if  living,  and  in  case  of  the 
death  of  either  of  the  nieces  before  her  without  issue  her  share  to 
go  to  the  survivors. 

The  court  say,  page  227:  "It  is  not  important  to  determine 
whether  the  trust  instrument  was  made  in  contemplation  of 
death,  or  whether,  upon  the  delivery  thereof,  the  remainders 
vested  in  the  nieces  in  such  a  sense  as  to  constitute  a  gift  inter 
vivos  within  the  meaning  of  the  cases  cited  by  the  learned  counsel 
for  the  respondent.  It  may  be  conceded  that  upon  the  delivery 
<5f  the  trust  deed  an  interest  in  remainder  vested  in  the  nieces 
subject  to  open  and  let  in  the  children  of  one  who  had  died  dur- 
ing the  lifetime  of  the  donor,  according  to  the  terms  of  the  in- 
strument. The  real  question  is,  whether  the  remainders  which 
the  nieces  took  under  the  deed,  were  intended  to  'take  effect, 
in  possession  or  enjoyment,'  at  or  after  the  death  of  the  donor. 
Until  her  death,  they  had  no  actual  possession,  or  right  to  the 
possession,  of  the  property.  Since  they  could  not  receive  any 
part  of  the  principal  or  the  income  till  after  her  death,  their 
right  of  enjoyment  was  postponed  till  the  happening  of  that 
event.  Whatever  interest  they  may  have  had  before,  the  right 
to  the  possession  and  enjoyment  depended  upon  the  death  of 
the  donor.  We  think  it  quite  clear  that  the  remainders  were 
transferred  to  the  nieces,  in  possession  or  enjoyment,  by  an 
instrument  intended  to  take  effect  for  that  purpose,  at  or  after 
the  death  of  the  donor,  and  so  the  case  is  brought  within  the 
terms  of  the  statute.  It  matters  not  whether  the  transfer  is 
by  grant  or  by  gift  so  long  as  it  was  intended  to  take  effect, 
in  possession  or  enjoyment,  at  or  after  the  death  of  the 
grantor  or  donor,  the  devolution  of  title  is  subject  to  the 
tax. 

"The  death  of  the  donor  was  the  event  which  made  the  trans- 
fer complete  and  effective  and  secured  to  the  nieces  the  posses- 
sion and  enjoyment  of  the  property.  (In  re  Seaman,  147  N.  Y. 
77.) 

"The  property  was  within  this  state  and  the  transfer  was  by 
a  resident.  The  nieces  take  the  remainders  hi  possession  or  en- 
joyment under  the  laws  of  this  state  and  under  an  instrument 


218  THE    COURT   OF   APPEALS   DECISIONS 

made  here.    It  is  not  important,  therefore,  whether  they  now 
reside  here  or  elsewhere." 

Vide  Matter  of  Cruger,  54  App.  Div.  405-408,  affirmed,  on  opinion  below, 
166  N.  Y.  602;  Matter  of  Brandreth,  169  N.  Y.  437-442;  Matter  of  Hess, 
110  App.  Div.  476-483,  affirmed  on  opinion  of  Spring,  J.,  below  in  187  N. 
Y.  554;  Matter  of  Keeney,  194  N.  Y.  281-285,  sustained  in  222  U.  S.  525, 
sub  nom.  Keeney  v.  New  York;  Matter  of  Miller,  77  App.  Div.  473-483; 
Matter  of  Birdsall,  22  Misc.  180-195,  affirmed,  without  opinion,  43  App. 
Div.  624;  Matter  of  Loewi,  75  Misc.  57-62;  Matter  of  Spring,  75  id.  586- 
587;  Matter  of  Barbey,  114  N.  Y.  Supp.  725;  Matter  of  Atterbury,  N.  Y. 
Law  Journal,  March  25,  1913,  opinion  quoted  sub  Trust  Deed,  page  871; 
Matter  of  Cowan,  id.,  July  24,  1913,  opinion  quoted  sub  Gift,  page  699; 
Matter  of  Schermerhorn,  id.,  June  26, 1913,  opinion  quoted  sub  Trust  Deed, 
page  869;  Matter  of  Thome,  44  App.  Div.  8-10,  affirmed,  162  N.  Y.  238. 

Matter  of  Paterson,  146  App.  Div.  286,  affirmed,  without  opinion,  204 
N.  Y.  677;  Matter  of  Webber,  151  App.  Div.  539;  Matter  of  Heiser,  N.  Y. 
Law  Journal,  July  19,  1913,  opinion  quoted  sub  Property  Held  in  Trust 
or  Jointly,  page  804. 

Matter  of  Dingman,  66  App.  Div.  228. 


1897. 

MATTER  OF  THOMAS  C.  SLOANE,  154  N.  Y.  109. 

Testator  died  a  resident  on  June  17,  1890.  His  will  be- 
queathed $400,000  to  trustees  and  directed  them  "to  apply  the 
net  income  thereof  to  the  use  of  my  said  wife,  by  paying  the 
same  over  to  her  quarterly  during  her  life  or  until  her  remarriage 
and  upon  her  death  or  remarriage  I  give  and  bequeath  out  of 
said  principal  sum  of  four  hundred  thousand  dollars  the  sum  of 
two  hundred  thousand  dollars  to  the  president  and  fellows  of 
Yale  College  in  New  Haven;  the  sum  of  one  hundred  thousand 
dollars  to  my  sister  Euphemia  Coffin,  wife  of  Edmund  Coffin, 
and  the  sum  of  one  hundred  thousand  dollars  to  Mrs.  Elizabeth 
W.  Barnes,  wife  of  Henry  B.  Barnes,  and  said  trustees  are  to  pay 
over  and  deliver  the  same  accordingly." 

The  wife  of  testator  married  on  April  16,  1896,  and  two  days 
later  the  transfer  tax  proceedings  were  instituted.  The  appraiser 
reported  his  valuation  of  the  property  at  the  sum  of  $400,000, 
less  $6,800  deducted  for  legal  expenses  and  commissions,  leav- 
ing the  net  value  of  the  trust  estate  $393,200  and  the  value  of  the 
legacy  to  Yale  College,  one-half  of  that  amount,  or  $196,600. 
The  surrogate  thereupon  entered  a  formal  order  assessing  the 
taxable  interest  of  Yale  College  in  the  estate  upon  that  basis, 


154  N.  Y.   109  219 

which,  at  the  rate  of  five  per  cent,  on  said  amount,  made  the  tax 
$9,830.  The  College  appealed  to  the  surrogate,  who  reversed  the 
order  and  remitted  the  matter  to  the  appraiser  to  make  a  new 
report,  with  instructions  to  compute  the  value  of  the  estate  hi 
remainder  by  deducting  from  said  sum  of  $196,600  the  value  of 
the  particular  estate  of  the  widow  for  the  term  during  which  her 
widowhood  actually  existed.  Held,  that  the  order  of  the  sur- 
rogate was  correct. 

The  court  discuss  the  law,  saying,  page  112:  "The  original 
act  taxing  the  right  of  succession  to  legacies  and  inheritances  in 
certain  cases  has  been  repeatedly  amended  in  relation  to  the 
method  of  procedure  to  ascertain  the  amount  of  the  taxes  pro- 
vided thereby.  As  it  stood,  when  first  enacted  hi  1885,  it  re- 
quired the  property  passing  under  a  bequest  or  devise  to  'be  ap- 
praised immediately  after  the  death  of  the  decedent,  at  what  was 
the  fair  market  value  thereof  at  the  time  of  the  death  of  the  de- 
cedent, *  *  *  and  after  deducting  therefrom  the  value  of 
any  'life  estate,  or  term  of  years,  the  tax  prescribed  by'  the  act 
on  the  remainder  was  declared  to  'be  immediately  due  and  pay- 
able.' (L.  1885,  chap.  483,  §  2.)  By  §  13  provision  was  made  for 
the  appointment  of  an  appraiser  by  the  surrogate,  whose  duty 
it  was  to  appraise  the  property  at  its  fair  market  value,  and  the 
surrogate  was  then  required  to  'forthwith  assess  and  fix  the 
then  cash  value  of  all  estates,  annuities  and  life  estates,  or  term 
of  years  growing  out  of  said  estate,  and  the  tax  to  which  the  same 
is  liable.' 

"In  1887,  §  2  was  amended  so  as  to  provide  that,  'when  any 
gift,  grant,  legacy  or  succession  upon  which  a  tax  is  imposed  by 
section  first  of  this  act,  shall  be  an  estate,  income  or  interest  for 
a  term  of  years  or  for  life,  or  determinable  upon  any  future  or 
contingent  event,  or  shall  be  a  remainder,  reversion,  or  other 
expectancy,  real  or  personal,  the  entire  property  or  fund  by 
which  such  estate,  income  or  interest  is  supported,  or  of  which 
it  is  a  part,  shall  be  appraised  immediately  after  the  death  of  the 
decedent,  at  what  was  the  fair  and  clear  market  value  thereof  at 
the  time  of  the  death  of  the  decedent.'  (L.  1887,  chap.  713,  sec- 
tion 2.)  Section  13  was  also  amended  at  the  same  time  so  as  to 
provide  that  'the  value  of  every  future  or  contingent  or  limited 
estate,  income  or  interest  shall,  for  the  purposes  of  this  act,  be 
determined  by  the  rule,  method  and  standards  of  mortality  and 
of  value  which  are  employed  by  the  superintendent  of  the  in- 
surance department  in  ascertaining  the  value  of  policies  of  life 


220  THE   COURT   OF   APPEALS   DECISIONS 

insurance  and  annuities,  for  the  determination  of  the  liabilities 
of  life  insurance  companies.' 

"  In  1892  the  act  was  still  further  amended  so  as  to  provide  for 
an  appraisal  of  contingent  estates  'immediately  after  such 
transfer,  or  as  soon  thereafter  as  may  be  practicable,  at  the  fair 
and  clear  market  value  thereof  at  that  time,  provided,  however, 
that  when  such  estate,  income  or  interest  shall  be  of  such  a 
nature  that  its  fair  and  clear  market  value  cannot  be  ascer- 
tained at  such  time,  it  shall  be  appraised  in  like  manner  at  the 
time  when  such  value  first  became  ascertainable.'  (L.  1892, 
chap.  399,  section  11.) 

"  It  is  claimed  by  the  appellant  that  the  assessment  in  question 
is  to  be  made  in  accordance  with  the  provisions  of  the  Laws  of 
1885,  as  amended  in  1887.  We  have  held,  however,  that  the 
method  of  procedure  in  a  proceeding  for  the  ascertainment  and 
determination  of  a  transfer  or  inheritance  tax  is  controlled  by 
the  statute  on  the  subject  in  force  at  the  time  of  the  institution 
of  the  proceeding,  although  the  tax  itself  and  the  rights  of  the 
parties  are  controlled  by  an  earlier  statute.  (Matter  of  Davis, 
149  N.  Y.  539.)  In  that  case  the  intestate  died  January  16, 1887, 
but  the  proceeding  to  ascertain  the  amount  of  the  tax  was  not 
commenced  until  July  24, 1894,  and  we  held  that  while  the  rights 
of  the  parties  depended  upon  the  earlier,  the  procedure  was  con- 
trolled by  the  later  statute.  According  to  this  precedent,  there- 
fore, the  rights  of  the  parties  now  before  us  depend  upon  the 
statute  as  amended  hi  1887,  but  the  method  of  procedure  de- 
pends upon  the  statute  of  1892.  *  *  *  After  this  proceed- 
ing was  instituted,  and  on  the  27th  of  May,  1896,  the  act  in  re- 
lation to  taxable  transfers  of  property  was  incorporated  in  the 
General  Tax  Law  after  various  amendments  had  been  made 
thereto,  one  of  which  provided  that  'Whenever  an  estate  for 
life  or  for  years  can  be  divested  by  the  act  or  omission  of  the 
legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possi- 
bility of  such  limitation.'  (L.  1896,  chap.  908,  section  230.)  As 
this  act  did  not  take  effect  until  the  15th  of  June,  1896,  it  has  no 
application  to  the  proceeding  now  before  us.  (Id.,  section  281.) 
The  trust  estate  had  terminated  before  the  new  provision  took 
effect.  Moreover,  as  that  provision  only  relates  to  the  taxa- 
tion of  an  estate  for  life  or  for  years  that  can  be  divested  by  the 
act  or  omission  of  the  legatee  or  devisee,  it  does  not  apply  to  an 
estate  in  remainder  that  cannot  be  so  divested.  The  estate  for 
life  or  for  years  alone  is  referred  to  when  the  statute  says,  'it 


154  N.   Y.  242  221 

shall  be  taxed  as  if  there  were  no  possibility  of  such  a  limi- 
tation.'" 

Vide  Matter  of  Vanderbilt,  172  N.  Y.  69,  §  230.  Matter  of  Mason,  120 
App.  Div.  738,  affirmed,  without  opinion,  189  N.  Y.  556;  Matter  of  Meyer, 
83  App.  Div.  381-384;  Matter  of  Lawrence,  96  App.  Div.  29-32;  Matter  of 
White,  208  N.  Y.  64-67;  Matter  of  Abraham,  151  App.  Div.  441-442; 
Matter  of  Webber,  151  App.  Div.  539;  Matter  of  Jones,  54  Misc.  202-205; 
Matter  of  Ames,  141  N.  Y.  Supp.  793-796;  Matter  of  Stuart,  N.  Y.  Law 
Journal,  May  10, 1913,  opinion  quoted  sub  Power  of  Appointment. 


1897. 

MATTER  OF  JOHN  H.  BEACH,  154  N.  Y.  242. 

Testator  died  a  resident  on  September  28,  1893,  devising  and 
bequeathing  to  appellant  certain  of  his  estate.  Appellant 
claimed  that  the  property  given  to  her  by  the  will  was  exempt 
from  taxation  under  that  provision  in  §  2  of  the  1892  act  which 
exempts  from  such  taxation  real  property,  and  also  personal 
property  not  exceeding  ten  thousand  dollars  in  value,  passing  by 
will,  deed  or  gift  to  "any  person  to  whom  any  such  decedent, 
grantor,  donor  or  vendor,  for  not  less  than  ten  years  prior  to 
such  transfer,  stood  in  the  mutually  acknowledged  relation  of  a 
parent."  Held,  that  although  appellant  was  an  adult  when  the 
relationship  began  she  was  entitled  to  the  exemption. 

In  discussing  the  statute,  the  court  say,  page  248:  "The 
legislature,  at  the  time  of  the  enactment  in  question,  had  in 
mind  the  question  of  legitimacy,  for  it  excluded  illegitimate 
descendants  of  a  decedent  from  the  benefit  of  the  exemption  by 
the  words  'or  to  any  lineal  descendent  of  such  decedent,  etc., 
born  in  lawful  wedlock.'  In  other  words,  illegitimate  descend- 
ants are  not  entitled  as  such  to  the  exemption  in  any  case,  or 
under  any  circumstances.  They  only  became  so  entitled  under 
the  alternative  clause  when  the  conditions  of  the  statute  are  met, 
and  then  not  because  they  are  illegitimate,  but  because  they  are 
embraced  within  the  words  'any  person,'  etc.  The  use  of  the 
words  'mutually  acknowledged'  has  been  regarded  as  giving 
force  to  the  view  that  illegitimate  children  were  alone  in  the 
contemplation  of  the  legislature.  It  is  said  that  a  fact  may  be 
acknowledged  and  that  the  words  'mutually  acknowledged' 
do  not  properly  express  a  relation  not  existing  in  fact.  We 
think  they  were  used  as  equivalent  to  the  words  'mutually 
recognized.'  The  illegitimate  child  could  not  know  the  fact 


222  THE   COURT   OF   APPEALS   DECISIONS 

of  its  parentage,  and  it  is  difficult  to  suppose  that,  by  the  use  of 
the  words  'mutually  acknowledged  relation,'  the  legislature  in- 
tended to  denote  the  actual  relation  between  a  parent  and  his 
illegitimate  offspring,  and  an  open  acknowledgment  of  that  re- 
lation between  themselves  and  the  public  for  the  period  men- 
tioned. The  clause,  we  think,  was  intended  to  have  a  broader 
scope;  to  include,  among  others,  those  cases,  not  infrequent, 
where  a  person  without  offspring,  needing  the  care  and  affection 
of  some  one  willing  to  assume  the  position  of  a  child,  takes, 
without  formal  adoption,  a  friend  or  relative  into  his  household, 
standing  to  such  person  in  loco  parentis,  or  as  a  parent,  and 
receives  in  return  filial  attention  and  service." 

Chapter  88,  Laws  of  1898,  amended  the  statute  by  providing  that  the 
relationship  must  begin  "at  or  before  the  child's  fifteenth  birthday." 
Vide  subdivision  1  of  §  221a  of  present  statute.  Matter  of  John  W.  Davis, 
184  N.  Y.  299-302;  Matter  of  Roebuck,  79  Misc.  589;  Matter  of  Brundage, 
31  App.  Div.  348-351. 


1897. 

MATTER  OF  PHILIP  EMBURY,  164  N.  Y.  746,  affirms,  with- 
out opinion,  19  App.  Div.  214. 

The  court  say,  page  214:  "After  the  passage  of  chapter  483  of 
the  Laws  of  1885,  then  known  as  the  Collateral  Inheritance  Act, 
it  became  a  matter  of  legal  controversy  whether  the  property  of 
a  non-resident  decedent,  situate  within  this  State,  was  subject  to 
the  tax  provided  for  by  such  act.  It  was  finally  decided  by  the 
Court  of  Appeals,  in  the  year  1889,  that  it  did  not  affect  property 
within  this  State  which  passed  by  will  or  intestacy  from  a  non- 
resident decedent  to  collateral  relatives  or  strangers.  (Matter 
of  Enston,  113  N.  Y.  174.) 

"Intermediate  the  passage  of  the  statute  and  the  decision  in 
Matter  of  Enston,  the  Legislature  amended  such  act  by  chap- 
ter 713  of  the  Laws  of  1887,  and  it  was  later  held,  but  by  a  di- 
vided court,  that  one  of  the  objects  of  the  amendment  was  to 
tax  the  personal  property  within  this  State  owned  by  a  non- 
resident decedent.  (Matter  of  Romaine,  127  N.  Y.  80.) 

"A  few  months  after  the  amendment  of  1887  took  effect, 
Philip  Embury,  a  resident  of  New  Jersey,  died  at  West  Orange 
in  that  State.  He  left  a  will  in  which  he  made  disposition  of  all 
his  estate,  and  appointed  as  executors  Benjamin  T.  Kissam  and 
Aymar  Embury,  both  of  whom  were,  at  the  testator's  death,  and 


154  N.  Y.  746  223 

ever  since  have  been,  citizens  and  residents  of  New  Jersey.  The 
will  was  thereafter  duly  probated  in  Essex  county,  New  Jersey. 
Subsequently,  and  in  November,  1888,  the  executors  rendered 
an  account  of  their  trust  before  the  Orphans'  Court  of  Essex 
county,  New  Jersey,  and  were  discharged.  The  will  was  not 
proved,  nor  were  ancillary  executors  or  administrators  appointed 
in  this  State,  nor  did  the  executors  invoke  the  laws  of  the  State 
of  New  York  for  any  purpose. 

"  Philip  Embury,  at  the  time  of  his  death,  was  not  the  owner 
of  any  real  property  in  the  State  of  New  York,  but  he  was  the 
owner  of  certain  stocks  of  New  York  banks,  and  had  moneys  on 
deposit  both  of  a  bank  and  a  trust  company  doing  business  in 
the  city  of  New  York.  The  executors  withdrew  the  deposits  and 
took  them,  together  with  the  bank  shares  or  their  proceeds,  to 
New  Jersey  for  disposition  in  accordance  with  the  provisions  of 
the  will,  prior  to  their  being  discharged  as  executors.  The  exec- 
utors did  not  pay  any  tax  under  the  '  Collateral  Inheritance  Tax 
Act '  of  1887,  nor  did  the  Surrogate's  Court  of  New  York  county 
have  jurisdiction  to  appoint  an  appraiser  and  fix  the  value  of  the 
personal  property  and  the  amount  of  the  tax  thereon. 

"The  section  of  the  act  of  1887  which  attempts  to  confer 
jurisdiction  on  the  Surrogate's  Court  (section  15)  reads  as  fol- 
lows: 'The  Surrogate's  Court  in  the  county  in  which  the  real 
property  is  situate  of  a  decedent  who  was  not  a  resident  of  the 
State,  or  in  the  county  of  which  the  decedent  was  a  resident  at 
the  time  of  his  death,  shall  have  jurisdiction  to  hear  and  deter- 
mine all  questions  in  relation  to  the  tax  arising  under  the  pro- 
visions of  this  act,  and  the  surrogate  first  acquiring  jurisdiction 
hereunder  shall  retain  the  same  to  the  exclusion  of  every  other.' 

"The  statute,  therefore,  only  conferred  on  the  surrogate  ju- 
risdiction in  the  case  of  such  non-resident  decedents  as  should 
die  seized  of  real  estate  within  the  surrogate's  county.  *  *  * 

"  (Page  216.)  In  other  words,  the  statute  of  1885,  as  amended 
by  the  act  of  1887,  declared  such  of  Embury's  property  as  was 
in  New  York  taxable,  but  omitted  to  give  the  Surrogate's  Court 
jurisdiction  to  impose  the  tax." 

The  jurisdictional  defect  of  the  statute  re  non-resident  estates  was  reme- 
died by  chapter  399  of  the  Laws  of  1892;  vide  §  228  of  present  act.  Etiam 
Matter  of  Fitch,  160  N.  Y.  87-90;  Matter  of  Pettit,  171  N.  Y.  654;  Matter 
of  Lord,  111  App.  Div.  152-153,  affirmed,  without  opinion,  186  N.  Y.  549, 
and  sustained  in  211 U.  S.  477,  sub  nom.  Beers  v.  Glynn;  Matter  of  Hubbard, 
21  Misc.  566-567, 


224  THE   COURT  OF   APPEALS   DECISIONS 

As  to  power  and  duties  of  surrogate  vide  opinion  of  comptroller,  dated 
April  16,  1913,  given  in  answer  to  inquiry  of  surrogate  of  Chemung  County, 
2  State  Department  Reports,  497. 

As  to  present  law  in  non-resident  estate  vide  supra,  page  133. 


1898. 

MATTER  OF  JAY  GOULD,  166  N.  Y.  423,  modifies  19  App. 
Div.  352. 

Testator  died  a  resident  December  2,  1892.  A  codicil  to  the 
will  provided,  inter  alia:  "My  beloved  son,  George  J.  Gould, 
having  developed  a  remarkable  business  ability,  and  having  for 
twelve  years  devoted  himself  entirely  to  my  business,  and  during 
the  past  five  years  taken  entire  charge  of  all  my  difficult  inter- 
ests, I  hereby  fix  the  value  of  his  said  services  at  $5,000,000." 

George  J.  Gould  was  allowed  to  testify,  notwithstanding  ob- 
jection by  Comptroller  based  on  §  829  of  the  Code  of  Civil  Pro- 
cedure. (Vide  19  App.  Div.  at  page  355.)  * 

The  Appellate  Division,  page  359,  held  that  expenses  of  ad- 
ministration "could  be  arrived  at  by  estimating  the  same  in 
part."  2 

The  Court  of  Appeals  say,  page  426:  "The  statute  reads:  'A 
tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property  *  *  *  when  the  transfer  is  by  will.'  It  will  be 
noted  that  the  imposition  of  the  tax  is  not  limited  to  property 
gratuitously  given  by  will,  but  is  extended  to  all  property  so 
transferred.  Was  not  the  property  mentioned  in  this  codicil 
transferred  by  will?  Certainly  it  was,  for  the  title  to  the  bonds 
and  stocks  described  in  the  codicil  was  taken  away  from  the 
estate  of  Jay  Gould  and  vested  in  George  J.  Gould  under  and  by 
virtue  of  the  second  codicil  of  the  will  and  such  property 
is,  therefore,  taxable  under  the  express  provisions  of  this 
statute.  *  *  * 

"  (Page  428.)  It  matters  not  what  the  motive  of  a  transfer  by 
will  may  be,  whether  to  pay  a  debt,  discharge  some  moral  obli- 
gation, or  to  benefit  a  relative  for  whom  the  testator  entertains 
a  strong  affection,  if  the  devise  or  bequest  be  accepted  by  the 
beneficiary,  the  transfer  is  made  by  will,  and  the  state  by  the 
statute  in  question  makes  a  tax  to  impinge  upon  that  perform- 
ance." 

Matter  of  Rogers,  71  App.  Div.  461-465,  affirmed,  on  opinion  below, 
172  N.  Y.  617;  Matter  of  Wolfe,  89  App.  Div.  349-351,  affirmed,  without 


157  N.  Y.  46  225 

opinion,  179  N.  Y.  599;  Matter  of  Maverick,  135  App.  Div.  44-45,  affirmed, 
without  opinion,  198  N.  Y.  618;  Matter  of  Huber,  86  App.  Div.  458-460; 
Matter  of  Niven,  29  Misc.  550-551;  Matter  of  Daniell,  40  Misc.  329-331; 
Matter  of  Eaton,  55  Misc.  472-477;  Matter  of  Starbuck,  63  Misc.  156- 
159,  affirmed,  201  N.  Y.  531. 

1  Matter  of  Brundage,  31  App.  Div.  348-353;  Matter  of  White,  116 
App.  Div.  183-185;  Matter  of  Bentley,  31  Misc.  656-657;  Matter  of  Hart- 
man,  N.  Y.  Law  Journal,  October,  8,  1913,  opinion  quoted  supra,  page 
858.    Contra  Matter  of  Thompson,  81  Misc.  86,  vide  post,  page  857. 

2  Matter  of  Granfeld,  79  Misc.  374-376. 


1898. 

MATTER  OF  S.  MARETTA  THRALL,  157  N.  Y.  46. 

Testatrix  left  a  legacy  to  the  city  of  Middletown.  The  Court 
say,  page  49:  "  In  1896  there  was  a  general  revision  of  all  the  tax 
laws  of  the  state,  including  the  Collateral  Inheritance  Tax,  now 
known  as  the  Transfer  Tax.  Under  the  revision  there  may  be 
no  material  change  in  the  Transfer  Act  as  to  exemptions,  but 
we  find  a  very  material  change  with  reference  to  the  general 
taxation  of  property.  *  *  *  It  appears  to  us  that  cities 
are  now  brought  clearly  within  the  provisions  of  the  Transfer 
Act,  and  are  exempt  as  to  property  held  or  to  be  held  for  a  public 
use  within  the  corporate  limits." 

Deduction  will  not  be  allowed  for  expenses  hi  an  action 
brought  by  executors,  both  individually  and  in  their  representa- 
tive capacity,  for  a  construction  of  the  will  of  their  testator, 
where  such  action  is  unnecessary,  the  questions  being  such  as 
can  readily  be  settled  in  the  Surrogate's  Court  by  the  decree  of 
distribution;  and  where  it  also  appears  that  its  principal  object 
is  to  benefit  the  personal  interests  of  the  executors.  (Vide  30 
App.  Div.  at  page  274.) l 

Prior  to  the  1896  amendment,  vide  Matter  of  Hamilton,  148  N.  Y.  310. 

After  this  decision  §  244  was  added  to  statute  by  chapter  382,  Laws  of 
1900,  hi  effect  April  11,  1900.  Exemptions  are  no  longer  granted  unless 
within  the  terms  of  §  221  or  §  2216.  Matter  of  Grouse,  34  Misc.  670- 
672;  Matter  of  Huntington,  168  N.  Y.  399;  Matter  of  Sanford,  66  Misc. 
395. 

As  to  bequest  to  city  in  trust  for  educational  purposes  vide  Matter  of 
Saunders,  77  Misc.  54,  affirmed,  without  opinion,  156  App.  Div.  891. 

lAs  to  when  allowed  vide  Matter  of  Sanford,  66  Misc.  395-399;  Matter 
of  Gihon,  169  N.  Y.  443-445. 


15 


226  THE   COURT  OF  APPEALS   DECISIONS 

1898. 

MATTER  OF  MARY  ANN  MURPHY,  157  N.  Y.  679,  affirms, 
without  opinion,  32  App.  Div.  627,  which  affirms,  without 
opinion,  and  on  authority  of  Matter  of  Offerman,  25 
App.  Div.  94,  order  of  Surrogate  of  Kings  County. 

Testatrix  died  a  resident  October  23,  1896,  and  by  her  will 
directed  her  executor  to  pay  a  bond  and  mortgage  executed  by 
her.  The  court  held  that  the  amount  of  the  bond  and  mortgage 
should  not  be  deducted  from  the  personal  estate  for  the  purpose 
of  assessing  the  estate  for  taxation  under  the  Transfer  Tax  Act. 

Matter  of  Livingston,  1  App.  Div.  568;  Matter  of  Sutton,  3  App.  Div. 
208,  affirmed,  on  opinion  below,  149  N.  Y.  618;  Matter  of  Maresi,  74  App. 
Div.  76-79;  Matter  of  Berry,  23  Misc.  230. 


1898. 

MATTER  OF  HENRY  B.  GIBSON,  157  N.  Y.  680,  affirms, 
without  opinion,  on  ground  that  case  is  governed  by 
Matter  of  Seaman  (147  N.  Y.  69),  33  App.  Div.  628,  which 
affirms,  without  opinion,  order  of  Surrogate  of  Ontario 
County. 

Testator  died  a  resident  November  20,  1863.  By  his  will 
he  gave  to  his  trustees  securities  amounting  to  $150,000  in  trust 
to  pay  the  income  to  his  daughter  for  life,  with  remainders  to  his 
children  and  other  grandchildren  of  testator.  The  life  tenant 
died  October  25,  1897.  It  was  conceded  that  unless  the  amend- 
ment of  chapter  284,  Laws  1897  changed  the  statute  the  transfer 
of  the  remainders  upon  the  death  of  the  life  tenant  was  not  tax- 
able under  authority  of  Matter  of  Seaman,  147  N.  Y.  69. 

Held,  that  transfer  not  taxable.  Costs  were  awarded  to  each 
respondent  appearing  by  separate  attorney. 

Matter  of  Spaulding,  49  App.  Div.  541-549,  affirmed,  without  opinion, 
163  N.  Y.  607;  Matter  of  Pell,  171  N.  Y.  48-53;  Matter  of  Craig,  97  App. 
Div.  289-294,  affirmed,  on  opinion  below,  181  N.  Y.  551;  Matter  of  Smith, 
150  App.  Div.  805. 


1899. 

MATTER  OF  SARAH  A.  LANKFORD  PALMER,  158  N.  Y. 
669,  affirms,  on  opinion  below,  33  App.  Div.  307. 

Testatrix  died  a  resident  on  April  25,  1896.  She  bequeathed 
a  portion  of  her  estate  "to  Bishop  William  Taylor  or  his  living 
successor,  to  be  used  in  his  African  Mission  work."  Before  the 


158  N.  Y.  671  227 

testatrix  died  Bishop  William  Taylor  died,  and  it  is  conceded 
that  the  appellant,  Joseph  C.  Hartzell,  is  his  living  successor 
and  is  bishop  and  is  entitled  to  this  legacy.  He  claimed  before 
the  surrogate  that  he  was  exempt  from  the  tax,  because  of  the 
fact  that  he  was  a  bishop. 

Held,  that  although  Bishop  Hartzell  was  a  resident  of  New 
Jersey,  the  legacy  was  not  taxable. 

Vide  §  221.  As  to  archbishop  vide  Matter  of  Kelly,  29  Misc.  169;  Church 
of  the  Transfiguration  v.  Niles,  86  Hun,  221;  Matter  of  Frazier,  N.  Y. 
Law  Journal,  March  28,  1912,  opinion  quoted  sub  Power  of  Appointment, 
page  778. 

Matter  of  McCartin,  N.  Y.  Law  Journal,  December  5,  1913,  opinion 
quoted  post,  page  608. 


1899. 

MATTER  OF  ERASTUS  S.  EDGERTON,  168  N.  Y.  671, 
affirms,  without  opinion,  35  App.  Div.  125. 

Intestate  died  a  resident  on  April  15,  1893.  He  had  been 
doing  business  in  the  state  of  Minnesota  and  some  of  his  prop- 
erty was  there  and  letters  of  administration  upon  his  estate  were 
there  taken  out.  No  administration  has  been  granted  in  this 
state.  On  or  about  the  31st  of  March,  1888,  he  made  transfers 
of  the  greater  portion  of  his  property  to  his  sisters  and  nephew 
and  nieces,  and  the  controversy  in  this  case  is  over  the  question 
whether  such  transfers  are  subject  to  taxation  under  the  act  re- 
lating to  taxable  transfers  of  property. 

There  was  no  power  of  revocation.  He  took  from  the  trans- 
ferees bonds  conditioned  for  the  payment  to  him  of  certain 
yearly  sums  during  his  life. 

The  court  say,  page  128:  "By  chapter  713  of  the  Laws  of 
1887,  which  was  in  force  when  these  transfers  were  made,  a  tax 
was  imposed  upon  the  transfer  of  any  property  '  by  deed,  grant, 
sale  or  gift,  made  or  intended  to  take  effect  in  possession  or  en- 
joyment after  the  death  of  the  grantor  or  bargainer. '  By  chap- 
ter 399  of  the  Laws  of  1892,  which  was  in  force  at  the  time  of  the 
death  of  Mr.  Edgerton,  a  tax  was  imposed  upon  any  transfer 
made  '  by  deed,  grant,  bargain,  sale  or  gift  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to 
take  effect,  in  possession  or  enjoyment,  at  or  after  such  death.' 
Under  the  act  of  1887  transfers  to  a  sister  were  exempt,  other- 
wise under  the  act  of  1892,  unless  the  estate  transferred  was  less 
than  $10,000. 


228  THE    COURT   OF   APPEALS   DECISIONS 

"It  is  argued  by  the  appellants  that  the  act  of  1892  is  appli- 
cable, and  that  the  transfers  in  question  were  made  in  contempla- 
tion of  the  death  of  the  transferrer,  and,  therefore,  with  hi  the  pro- 
vision of  that  act  above  quoted.  *  *  *  The  transfers  here, 
aside  from  the  trust  deed  as  to  the  monument,  were,  I  think, 
intended  to  take  effect  in  possession  and  enjoyment  at  the  time 
they  were  made  and,  therefore,  were  not  within  the  statute.  It 
can  hardly  be  said  there  was  an  attempt  to  evade  the  law,  inas- 
much as  under  the  law,  as  it  was  at  the  time  the  transfers  were 
made,  the  sisters  who  received  about  two-thirds  of  the  property 
were  exempt. 

"No  particular  point  seems  to  be  made  as  to  the  provision  for 
a  monument  and  care  of  a  burial  lot.1  Assuming  that  the  trans- 
fer covered  by  that  instrument  would  not  be  deemed  to  take 
effect  in  possession  as  to  the  proceeds  of  the  sale  of  the  stock 
therein  mentioned  until  the  death  of  Mr.  Edgerton,  still  the  pro- 
vision for  a  monument  is  considered  a  part  of  funeral  expenses 
and  so  not  subject  to  the  tax  as  ordinarily  understood." 

Vide  subdivision  4  of  §  220.  Matter  of  Spaulding,  49  App.  Div.  541- 
550,  affirmed,  without  opinion,  163  N.  Y.  607;  Matter  of  Hess,  110  App. 
Div.  476-480,  affirmed,  on  opinion  of  Spring,  J.,  below,  in  187  N.  Y.  555; 
Matter  of  John  Palmer,  117  App.  Div.  360-366;  Matter  of  Thorne,  44  App. 
Div.  8-10,  affirmed,  162  N.  Y.  238.  Vide  cases  cited  sub  Contemplation 
of  Death  and  sub  Gift. 

1  Matter  of  Maverick,  133  App.  Div.  44-45,  affirmed,  without  opinion, 
198  N.  Y.  618. 


1899. 

MATTER  OF  JOHN  W.  MASURY,  159  N.  Y.  632,  affirms, 
without  opinion,  28  App.  Div.  580. 

John  W.  Masury  died  a  resident  on  May  14, 1895.  During  the 
year  1892  he  executed  deeds  of  trust  in  favor  of  his  two  adopted 
sons,  the  income  of  which  was  to  go  to  the  beneficiaries.  In  1890 
he  executed  a  deed  of  trust  which  provided  that  the  income 
should  go  to  himself  or  order,  and  in  1892  he  directed  the  trustee 
to  pay  the  income  to  his  grandson  "until  this  authority  is  re- 
voked by  me  in  writing." 

There  was  no  question  of  fraud  involved;  he  acted  in  good 
faith  and  with  the  single  purpose  of  providing  for  his  adopted 
sons,  in  executing  and  delivering  the  several  trust  deeds.  The 
only  point  at  issue  was  whether  these  deeds  of  trust  were  gifts 
among  the  living,  or  whether  they  were  in  some  manner  con- 


159  N.  Y.  532  229 

tingent  upon  the  death  of  the  grantor.  It  is  conceded  that  if  the 
deeds  of  trust  were  gifts  taking  full  effect  during  the  lifetime  of 
the  parties,  the  property  would  be  beyond  the  reach  of  the 
statute;  but  a  clause  having  been  inserted  hi  each  of  such  deeds 
of  trust,  reserving  the  right  of  the  grantor  "to  revoke  and 
annul  the  same  during  my  lifetime,"  it  is  urged  that  the  gifts 
did  not  become  absolute  and  completed  until  the  death  of 
the  grantor,  and  that  the  property  is,  therefore,  properly  in- 
cluded in  the  appraisal.  The  court  say,  page  583:  "It  is  nec- 
essary, to  bring  this  property  within  the  scope  of  the  law, 
that  the  gift  should  have  been  made  'in  contemplation  of  the 
death  of  the  grantor/  or  that  it  was  'intended  to  take  effect, 
hi  possession  or  enjoyment,  at  or  after  such  death.'  *  *  * 
We  are  asked  to  determine  that,  because  of  the  fact  that  the 
grantor  might  have  revoked  the  trusts  at  any  time  during  his 
lifetime,  the  rights  of  the  appellants  in  the  trust  funds  did  not 
become  absolute  until  after  the  death  of  the  grantor,  and  that, 
therefore,  the  property  passed  into  the  possession  of  the  appel- 
lants, or  their  rights  became  absolute,  upon  the  death  of  the 
grantor,  and  it  is  subject  to  the  tax  which  was  ordered  by  the 
surrogate  to  be  collected.  This  does  not,  however,  follow.  If  it 
should  be  determined  that  the  gift  did  not  become  absolute 
until  the  possibility  of  its  annulment  ceased,  upon  the  death  of 
the  grantor,  it  would  still  be  necessary  to  show  that  the  gift  was 
'intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after 
such  death;'  and  to  determine  the  intention  of  the  donor,  we 
must  look,  not  to  the  argument  of  the  respondent,  but  to  the 
language  of  the  deeds  of  trust,  the  relations  which  existed  be- 
tween the  parties,  and  the  fact  of  the  beneficial  enjoyment  of  the 
avails  of  the  trust."  After  quoting  from  the  1892  trust  deeds 
the  court  continue,  page  585:  "We  must  conclude  that  the  title 
to  the  property  passed  to  the  trustee,  and  that  it  constituted  no 
part  of  the  property  of  the  said  John  W.  Masury  at  the  time  of 
his  death,  and  should  not  have  been  included  in  an  appraisal  of 
his  estate  for  the  purpose  of  taxation  under  the  Transfer  Tax 
Act." 
The  1890  trust  was  held  to  be  taxable. 

Vide  subdivision  4  of  §  220;  Matter  of  Bostwick,  160  N.  Y.  489;  Matter 
of  Keeney,  194  N.  Y.  281,  sustained  sub  nom.  Keeney  v.  New  York,  222 
U.  S.  525;  Matter  of  Patterson,  146  App.  Div.  286-291,  affirmed,  without 
opinion,  204  N.  Y.  677;  Matter  of  Spaulding,  49  App.  Div.  541-550, 
affirmed,  without  opinion,  163  N.  Y.  607;  Matter  of  Smith  Ely,  N.  Y. 


230  THE   COURT   OF   APPEALS   DECISIONS 

Law  Journal,  March  6,  1912,  opinion  quoted,  post,  page  868;  Matter  of 
McKeon,  id.,  June  8,  1912,  opinion  quoted,  post,  page  647;  Matter  of 
Schermerhorn,  id.,  June  26,  1913,  opinion  quoted,  post,  page  869;  Matter 
of  Cowan,  id.,  July  24,  1913,  opinion  quoted  from,  post,  page  699,  and 
cases  sub  Trust  Deed  and  sub  Gift. 


1899. 

MATTER  OF  MARY  A.  EDSON,  159  N.  Y.  668,  affirms,  on 

opinion  below,  38  App.  Div.  19,  which  reversed  24  Misc. 

356. 

Testatrix  died  a  resident  May  29,  1890.  Dispute  arose  as  to 
the  construction  of  the  will;  the  state  was  not  made  a  party  to 
the  action.  The  will  was  construed  by  the  court  to  give  an 
absolute  legacy  to  John  E.  Parsons,  one  of  the  executors,  but, 
from  facts  appearing  extrinsic  thereto  it  was  held  that  the  legacy 
was  impressed  with  a  trust  in  favor  of  the  next  of  kin. 

The  court  held  (page  21)  that  the  question  of  whether  the 
legacy  was  taxable  was  "not  affected  by  the  form  of  the  Supreme 
Court  judgment"  in  the  action  brought  to  construe  the  will, 
"the  state  not  being  a  party  to  that  action,  and  the  judgment 
having  been  entered  by  consent  without  its  having  appeared  or 
been  heard." 

The  court  further  say,  page  22:  "The  question  is,  therefore, 
whether  Mr.  Parsons  or  the  brother  of  the  testatrix  took  the 
one-third  interest  which  it  is  here  sought  to  tax  under  the  will. 
If  Mr.  Parsons,  then,  under  the  Collateral  Inheritance  Tax  Law 
(chap.  713,  Laws  of  1887),  such  interest  is  subject  to  the  tax. 
Disregarding  the  form  of  the  final  judgment  in  the  Supreme 
Court  as  not  binding  upon  the  State,  we  find  that,  under  the 
decision  of  the  Court  of  Appeals,  the  one-third  of  the  residuary 
estate  passed  under  the  will  and  vested  in  Mr.  Parsons  abso- 
lutely, and  that  no  trust  was  imposed  thereon  by  the  will,  and 
although  it  was  held  that,  as  the  result  of  the  extrinsic  evidence 
introduced,  he  took  it  impressed  with  a  trust  in  favor  of  the 
brother,  this  would  not  relfeve  him  from  the  payment  of  the 
tax." 

Matter  of  Willets,  119  App.  Div.  119-126,  affirmed,  without  opinion, 
190  N.  Y.  527;  Matter  of  Lawrence,  N.  Y.  Law  Journal,  February  15, 
1913,  opinion  quoted  in  footnote  to  Matter  of  Tilt,  post,  page  317. 


160  N.  Y.  87  231 

1899. 

MATTER  OF  EMILY  M.  FITCH,  160  N.  Y.  87. 

Testatrix  died  a  resident  of  Connecticut  July,  1894.  The  court 
say,  page  89:  "The  question  presented  is  not  whether  the  prop- 
erty is  taxable  under  the  Taxable  Transfer  Act,  under  which  the 
surrogate  has,  in  proceedings  taken  for  that  purpose,  made  an 
order  imposing  a  tax,  but  whether  the  Surrogate's  Court  had 
jurisdiction  to  make  the  order." 

The  will  was  admitted  to  probate  in  Connecticut  and  the 
estate  administered  there,  the  executor  paying  to  the  state  of 
Connecticut  the  sum  of  $4,451.79,  that  being  the  amount  of  col- 
lateral inheritance  tax  imposed  by  the  laws  of  that  state.  In 
April,  1897,  nearly  three  years  after  death  of  testatrix,  the  comp- 
troller instituted  a  proceeding  hi  the  Surrogate's  Court  of  New 
York  county  for  the  appointment  of  an  appraiser  to  fix  and  de- 
termine for  the  purposes  of  taxation,  under  the  Taxable  Transfer 
Act  of  the  state  of  New  York,  the  value  of  the  personal  property 
of  the  said  Emily  M.  Fitch  which  was  situated  in  the  state  of 
New  York  at  the  time  of  her  death,  and  which  the  petitioner 
asserted  was  either  passed  or  transferred  by  the  terms  of  the 
will.  The  property  consisted  of  348  shares  of  the  capital  stock 
of  the  Consolidated  Gas  Company  of  New  York,  a  corporation 
having  its  principal  office  in  New  York  county.  The  certificates 
representing  the  stock  were  in  her  possession  in  Connecticut  at 
the  time  of  her  death,  and  they  passed  into  the  possession  of  her 
executor,  who  was  also  a  resident  of  Connecticut.1 

The  court  say,  page  91:  "Unless  authority  is  conferred  upon 
the  surrogate  to  impose  the  tax,  an  order  to  that  effect  is  without 
jurisdiction  and  void.  *  *  *  So  much  of  the  statute  as  is 
material  in  a  discussion  of  the  question  reads  as  follows:  'The 
Surrogate's  Court  of  every  county  of  the  state  having  juris- 
diction to  grant  letters  testamentary  or  of  administration  upon 
the  estate  of  a  decedent  whose  property  is  chargeable  with  any 
tax  under  this  act,  or  to  appoint  a  trustee  of  such  estate  or  any 
part  thereof,  or  to  give  ancillary  letters  thereon,  shall  have  juris- 
diction to  hear  and  determine  all  questions  arising  under  the 
provisions  of  this  act,  and  to  do  any  act  in  relation  thereto 
authorised  by  law  to  be  done  by  a  surrogate  in  other  matters 
or  proceedings  coming  within  his  jurisdiction.'  (Laws  1892, 
chapter  399,  §  10.) 

"Neither  letters  testamentary  nor  ancillary  letters  were  ap- 


232  THE   COURT   OF   APPEALS   DECISIONS 

plied  for  or  issued  in  this  case,  but  that  fact  has  no  bearing  what- 
ever on  the  question  involved,  for  the  jurisdiction  of  the  court  is 
to  be  determined  by  the  answer  to  the  question:  Had  the  court 
power  to  issue  letters?" 

Held,  that  as  the  surrogate  had  power  to  issue  letters  under 
subdivision  3  of  §  2476  of  the  Code  of  Civil  Procedure,  he  had 
jurisdiction  in  the  tax  proceedings  and  his  order  was  affirmed. 

Vide  §  228  and  subdivisions  2  and  4  of  §  220,  and  §  243.  Beers  v.  Glynn, 
211  U.  S.  477-484,  sustaining  Matter  of  Lord,  186  N.  Y.  549;  opinion  of 
state  comptroller,  dated  April  16,  1913,  2  State  Department  Reports, 
497-499.  Matter  of  Hubbard,  21  Misc.  566. 

As  to  transfers  since  1911  in  estates  of  non-residents  vide  supra,  page  133. 

1  Matter  of  Bushnell,  73  App.  Div.  325-327,  affirmed,  without  opinion, 
172  N.  Y.  649. 


1899. 

MATTER  OF  JABEZ  A.  BOSTWICK,  160  N.  Y.  489. 

The  surrogate  imposed  a  transfer  tax  upon  property  received 
under  certain  deeds  executed  and  delivered  to  the  New  York 
Life  Insurance  and  Trust  Company  by  Jabez  A.  Bostwick, 
deceased.  Bostwick  died  in  August,  1892,  and  at  the  time  of  his 
death  was  a  resident  of  the  city  of  New  York.  The  statute  im- 
posing a  tax,  in  force  at  the  time  of  his  death  (chapter  399,  Laws 
of  1892,  §  1,  the  Transfer  Tax  Act),  provided,  among  other 
things,  that  a  tax  should  be  imposed  upon  the  transfer  of  any 
property,  real  or  personal,  of  the  value  of  $500  or  over,  or  of  any 
interest  therein  or  income  therefrom,  in  trust  or  otherwise,  when 
the  transfer  was  made  by  "deed,  grant,  bargain,  sale  or  gift 
made  in  contemplation  of  the  death  of  the  grantor,  vendor  or 
donor,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death."  The  instruments,  six  in  number,  were  exe- 
cuted and  delivered  to  the  trust  company  at  different  times  be- 
tween August  19, 1889,  and  February  3,  1892,  and  provided  that 
Bostwick  could,  at  any  time  prior  to  his  death,  withdraw  from 
the  possession  of  the  trustee  any  or  all  of  the  property  trans- 
ferred, and  substitute  other  property  in  its  place.  They  also 
provided  that  he  could  alter,  amend  or  terminate  the  trust  in 
whole  or  in  part,  and  in  case  of  a  termination  all  the  property 
should  be  returned  to  him.  A  further  provision  was  inserted  in 
some  of  them  to  the  effect  that  the  income  from  the  property,  or 
the  greater  portion  of  it,  should  during  Bostwick's  life,  if  he  so 


160  N.  Y.  489  233 

desired,  be  paid  by  the  trustee  to  him,  or  to  such  other  persons 
as  he  might  direct. 

The  order  of  the  surrogate  was  affirmed,  the  court  saying, 
page  493:  "The  act  of  1892  (chap.  399,  sec.  1,  subd.  3),  whose 
provisions  must  control,  provided  for  the  imposition  of  the  tax 
upon  the  transfer  of  property,  when  it  was  made  in  contem- 
plation of  death,  'or  intended  to  take  effect  hi  possession  or 
enjoyment  at  or  after  such  death.'  We  must  discover  the  in- 
tention of  Mr.  Bostwick  by  considering  the  language  of  the  in- 
struments, through  which  he  transferred  his  properties  to  the 
trustee.  Instead  of  an  out  and  out  gift,  which  would  provide  for 
the  enjoyment  by  the  beneficiary  of  the  income  of  the  property 
during  her  life  and  for  the  disposition  of  the  trust  fund  there- 
after, we  find  powers  reserved  to  alter,  or  amend,  the  trust  by 
notice  to  the  trustee;  to  withdraw,  or  to  exchange,  any  securi- 
ties, and  to  control  the  acts  of  the  trustee  in  selling,  or  dispos- 
ing of,  the  securities,  or  with  respect  to  investments.  All  these 
are  indicia,  rather,  of  an  intention  on  the  donor's  part  to  retain 
a  dominion  over  the  properties  transferred,  and  do  not  consist 
with  an  existing  purpose  to  vest  the  absolute  right  to  present 
and  future  enjoyment  in  the  beneficiaries.  He  retained  practical 
control  of  the  trust  property  and  left  the  question  of  its  beneficial 
enjoyment  and  eventual  possession  open  until  his  death. 

"The  affirmance  of  the  decision  in  the  Masury  case  (159  N.  Y. 
532)  may  seem  to  have  committed  this  court  to  views  which 
support  the  contention  now  made  in  behalf  of  these  appellants; 
but,  if  that  be  so,  it  an  erroneous  inference  from  that  decision. 

"I  think  that  we  may  have  gone  too  far  in  generally  affirming 
the  Masury  decision;  certainly  the  limit  was  then  reached, 
beyond  which  the  courts  could  not  go  without  emasculating  the 
provisions  of  the  statute.  We  thought  there  was  some  reason  in 
the  facts  of  the  Masury  case  for  finding  an  intention  in  the  donor 
to  make  an  absolute  transfer  of  property  during  his  life,  which 
the  mere  reservation  of  a  power  to  revoke  was  of  itself,  insuffi- 
cient to  negative.  But,  if  the  trust  transfers  now  in  question 
were  held  to  be  without  the  operation  of  the  act,  too  dangerous 
a  latitude  of  action  would  be  permitted  to  persons  who  desired 
to  evade  its  provisions  by  some  technical  transfer,  which  would 
still  leave  the  substantial  rights  of  ownership  in  the  donor." 

Vide  subdivision  4  of  §  220.  Matter  of  Spaulding,  49  App.  Div.  541-550, 
affirmed,  without  opinion,  163  N.  Y.  607;  Matter  of  Miller,  77  App.  Div. 
473-483;  Matter  of  Smith  Ely,  N.  Y.  Law  Journal,  March  6,  1912;  Matter 


234  THE   COURT   OF  APPEALS   DECISIONS 

of  Barbey,  114  N.  Y.  Supp.  725;  Matter  of  Keeney,  194  N.  Y.  281,  sustained 
in  222  U.  S.  525,  sub  nom.  Keeney  v.  New  York,  Matter  of  Schermerhorn, 
N.  Y.  Law  Journal,  June  26, 1913,  opinion  quoted  sub  Trust  Deed,  page  869. 


1900. 

MATTER  OF  JOHN  H.  HARBECK,  161  N.  Y.  211. 

John  H.  Harbeck  died  February  2,  1878,  leaving  a  last  Will 
and  Testament  by  which  he  gave  to  his  wife,  Eliza  D.  Harbeck, 
a  life  interest  in  $300,000,  the  will  providing  that  upon  her 
death  the  said  money  was  to  be  paid  over  to  such  person  or  per- 
sons as  the  said  Eliza  D.  Harbeck  shall  in  and  by  her  last  Will 
and  Testament  give  and  bequeath  the  same,  and  in  default  of 
such  last  Will  and  Testament,  then  to  pay  and  deliver  over  the 
same  to  such  person  or  persons,  and  in  the  same  proportions,  as 
by  the  present  laws  of  the  state  of  New  York  would  take  and 
inherit  real  estate  from  the  said  Eliza  D.  Harbeck,  hi  case  of  her 
dying  intestate  seized  and  possessed  thereof. 

The  said  Eliza  D.  Harbeck  died  January  15,  1896,  leaving  a 
last  Will  and  Testament  by  which  she  exercised  the  power  of 
appointment 

The  court  say,  page  217:  "The  decision  of  this  Court  in  Mat- 
ter of  Miller  (110  N.  Y.  216)  is  authority  for  the  proposition 
that  the  act  of  1897  (chapter  284)  is  entitled  to  consideration  at 
the  hands  of  the  court,  as  a  legislative  declaration  that  the 
subject-matter  of  the  new  provisions  did  not  prior  thereto  con- 
stitute a  part  of  the  law."  1 

Held,  that  where  there  is  a  question  of  doubt,  the  doubt  should 
be  reserved  in  favor  of  the  taxpayer,  and  against  the  taxing 
power;  and  that  while  the  power  of  appointment  did  not  take 
effect  until  after  the  death  of  Mrs.  Harbeck  in  1896,  it  was  not 
the  authority  by  which  the  beneficiaries  acquired  the  fund.  The 
source  of  their  title  to  the  fund  was  the  original  will  of  John  H. 
Harbeck,  which  went  into  effect  in  1878,  and  into  that  instru- 
ment must  be  read  the  names  of  the  appointees  although  desig- 
nated by  a  later  instrument.  For  those  who  take  under  the 
power  of  appointment,  take  as  if  their  names  were  in  the  grant 
of  the  power.  The  court  accordingly  held  that  the  transfers 
were  not  taxable. 

A  year  after  tne  question  in  this  case  arose,  the  Legislature  amended  the 
statute  by  chapter  284,  Laws  of  1897,  in  effect  April  16,  1897,  now  sub- 


161  N.  Y.  631  235 

division  6,  §  220.  This  amendment  was  held  to  be  constitutional  in  Matter 
of  Vanderbilt,  163  N.  Y.  597.  Vide  Matter  of  Cooksey,  182  N.  Y.  92; 
Matter  of  Mergentime,  129  App.  Div.  367-374,  affirmed,  on  opinion  below, 
195  N.  Y.  572;  Matter  of  Fearing,  138  App.  Div.  881-882,  affirmed,  with 
opinion,  200  N.  Y.  340;  Matter  of  Burgess,  204  N.  Y.  265-268;  Matter  of 
Walworth,  66  App.  Div.  171-174;  Matter  of  Smith,  150  App.  Div.  SOS- 
SOS;  Matter  of  Kissel,  65  Misc.  443-444,  affirmed,  without  opinion,  142 
App.  Div.  934.  Etiam  Matter  of  Lansing,  182  N.  Y.  238;  Matter  of  Ripley, 
192  N.  Y.  536;  People  ex  rel  Ripley,  69  Misc.  402;  Matter  of  Haight,  152 
App.  Div.  228. 

1  Matter  of  Enston,  113  N.  Y.  174-183;  Matter  of  Buckingham,  106 
App.  Div.  13-19. 


1900. 

MATTER  OF  JOSEPH  PLUMMER,  161  N.  Y.  631,  affirms, 
without  opinion,  47  App.  Div.  625,  which  affirms,  without 
opinion,  30  Misc.  19 ;  sustained  in  178  U.  S.  115,  sub  nom. 
Plummer  v.  Coler. 

Decedent  died  a  resident  October  24,  1898.  Sole  question  at 
issue  is  whether  or  not  a  transfer  of  United  States  bonds  which 
took  place  since  March  21, 1898,  the  date  when  chapter  88  of  the 
laws  of  that  year  took  effect,  is  taxable  thereunder.  Surrogate 
Varnum  said,  page  20:  "By  the  act  of  1898  (chap.  88)  the  words 
which  the  Court  of  Appeals,  in  Matter  of  Whiting,  150  N.  Y.  27, 
and  Matter  of  Sherman,  153  N.  Y.  1,  construed  as  indicating  an 
intention  of  the  Legislature  not  to  tax  bonds  of  the  United  States, 
were  omitted  from  the  section  in  question.  Tax  Law  of  1896, 
section  242;  Laws  of  1892,  chap.  399,  section  22.  It  is  but  rea- 
sonable to  suppose  that  in  making  this  omission,  the  Legislature 
had  in  mind  the  decisions  prior  to  1892,  and  the  judicial  con- 
struction given  to  those  words  'over  which  this  State  has  any 
jurisdiction  for  purposes  of  taxation/  hi  Whiting  and  Sherman 
cases,  and  intended  by  the  act  of  1898  to  reach  'all  property,' 
including  bonds  of  the  kind  hi  question,  as  was  possible  before 
1892. 

"  It  is  almost  unnecessary  to  state  that  the  theory  on  which 
the  courts  have  held  this  kind  of  security  taxable  is  that  the  tax 
is  not  upon  the  bonds  themselves  but  upon  the  transfer  thereof. 
This  distinction  is  firmly  established  in  this  State." 

The  transfer  was  held  taxable. 

Keeney  v.  New  York,  222  U.  S.  525-533,  sustaining  Matter  of  Keeney, 
194  N.  Y.  281.  Vide  footnote,  supra,  to  Matter  of  Sherman,  153  N.  Y.  1. 


236  THE   COURT   OF   APPEALS   DECISIONS    • 

1900. 

MATTER  OF  JOSEPH  THORNE,  162  N.  Y.  238,  dismissed 

appeal  from  44  App.  Div.  8,  which  reversed  27  Misc. 

624. 

The  court  say,  page  239:  "The  order  of  the  Appellate  Divi- 
sion reversed  the  decree  of  the  surrogate  '  upon  the  facts  and  the 
law/  Under  the  Constitution  the  jurisdiction  of  this  court  is 
limited  to  a  review  of  questions  of  law  only.  It,  therefore,  has 
no  power  to  review  the  determination  of  the  Appellate  Division 
in  reversing  upon  the  facts.  An  examination  of  the  record 
clearly  shows  that  a  question  of  fact  was  involved. 

"  Eunice  E.  Huff,  the  respondent,  claimed  that  Thorne  gave 
her  one  thousand  shares  of  the  American  Press  Association  stock 
of  the  value  of  one  hundred  thousand  dollars  ($100,000)  before 
his  death.  In  her  testimony  she  makes  several  contradictory 
statements  with  reference  to  the  transaction.  The  appraiser 
found  that  the  transfer  was  made  to  her  charged  with  a  trust 
on  her  part  to  be  performed  of  taking  care  of  Thorne  during  his 
life,  and  that  the  remainder  was  intended  to  vest  hi  her  and  take 
effect  at  and  after  his  death. 

"The  surrogate,  in  confirming  the  report  of  the  appraiser, 
says:  'The  testimony  of  Mrs.  Huff  is  contradictory.  The  ap- 
praiser has  adopted  that  version  of  her  story  which  is  most  favor- 
able to  the  state.  In  this  I  think  he  has  adopted  the  correct  rule. 
The  witness  is  adverse.  The  result  of  her  testimony  means  a 
difference  of  five  thousand  dollars  ($5,000)  to  her.  We  must, 
therefore,  assume  that  she  would  put  that  construction  upon  the 
transaction  which  would  be  most  favorable  to  her,  and  most 
likely  to  relieve  her  of  a  tax.' 

"The  Appellate  Division  reached  a  different  conclusion.  It 
adopted  her  claim  that  the  gift  was  absolute  and  took  effect  at 
the  time  that  it  was  made,  and  that  the  title  to  the  stock  vested 
in  Mrs.  Huff  from  that  time. 

"  It  is,  therefore,  apparent  that  a  question  of  fact  was  involved 
which  this  court  has  no  jurisdiction  to  review."  1 

Vide  Matter  of  Brandreth,  169  N.  Y.  437;  Matter  of  Hess,  110  App.  Div. 
476-480-483,  affirmed,  on  opinion  of  Spring,  J.,  below,  in  187  N.  Y.  554; 
Matter  of  Miller,  77  App.  Div.  743-480;  Matter  of  Stebbins,  52  Misc. 
438-441;  Matter  of  McKeon,  N.  Y.  Law  Journal,  June  8,  1912,  opinion 
quoted  sub  Contemplation  of  Death,  page  647. 

1  Matter  of  Thayer,  193  N.  Y.  430-433. 


162  N.  Y.  612  237 

1900. 

WILLIAM  J.  MORGAN,  COMPTROLLER,  v.  GEORGE  B. 
WARNER  ET  AL.,  AS  EXECUTORS,  ETC.,  OF  JOHN 
STOLP,  DECEASED,  162  N.  Y.  612,  affirms,  on  opinion 
below,  45  App.  Div.  424. 

Testator  died  a  resident  February  10,  1899.  The  appeal  of 
the  comptroller  was  met  with  the  objection  that  it  was  un- 
authorized. 

The  court  say,  page  425:  "By  section  232  of  chapter  908  of 
the  Laws  of  1896  (The  Tax  Law)  the  procedure  under  such 
assessment  is  prescribed.  Pursuant  to  that  section  the  deter- 
mination was  first  made  upon  the  report  of  the  appraiser,  and, 
upon  an  appeal  from  said  determination  by  the  executors  and 
the  legatees,  the  determination  was  in  part  reversed.  The 
statute  then  provides:  'Within  two  years  after  the  entry  of  an 
order  or  decree  of  a  surrogate  determining  the  value  of  an  estate 
and  assessing  the  tax  thereon,  the  Comptroller  of  the  State  may, 
if  he  believes  that  such  appraisal,  assessment  or  determination 
has  been  fraudulently,  collusively  or  erroneously  made,  make 
application  to  a  justice  of  the  Supreme  Court  of  the  judicial 
district  in  which  the  former  owner  of  such  estate  resided  for  a 
reappraisal  thereof.  The  justice  to  whom  such  application  is 
made  may  thereupon  appoint  a  competent  person  to  reappraise 
such  estate.' " 1 

The  estate  claimed  that  the  Legislature  has  prescribed  a 
specific  mode  of  review  of  the  determination  of  the  surrogate 
upon  the  appeal;  that  that  provision  was  intended  to  be  exclu- 
sive, and  that  no  right  of  appeal  from  that  determination  is 
given  by  the  statute.  The  court  say,  page  426 :  "But  this  appeal 
need  not  necessarily  rest  upon  that  single  statute.  If  other 
statutes  exist  which  are  applicable  thereto  they  must  be  read  in 
connection  with  the  statutes,  they  together  prescribing  the  mode 
of  determination  of  this  tax  and  also  the  mode  of  review.  By 
section  2570  of  the  Code  of  Civil  Procedure,  it  is  provided: 
'  An  appeal  to  the  appellate  division  of  the  Supreme  Court  may 
be  taken  from  a  decree  of  the  Surrogate's  Court  or  from  an 
order  affecting  a  substantial  right  made  by  a  surrogate  or  by  a 
surrogate's  court  in  a  special  proceeding.'  This  proceeding 
would  seem  to  come  within  the  purview  of  that  section,  and  the 
order  made  by  the  surrogate  from  which  this  appeal  is  taken, 
involving,  as  it  does,  a  substantial  right,  may  be  reviewed  under 


238  THE    COURT   OF   APPEALS   DECISIONS 

this  section  by  the  Appellate  Division.  The  comptroller  then, 
if  he  desires  further  evidence  or  future  examination  of  the  assets 
of  an  estate  may  proceed  under  the  Transfer  Tax  Statute  and 
have  a  reappraisement  under  an  order  of  a  Justice  of  the  Supreme 
Court.  If,  however,  he  desires  simply  a  review  of  the  determi- 
nation made  by  the  surrogate  thereupon,  he  may  have  that  re- 
view upon  an  appeal." 

The  testator  held  notes  against  four  of  his  grand-nephews  and 
grand-nieces,  and  by  his  will  he  directed  that  the  notes  be  can- 
celled. The  appraiser  fixed  the  value  at  par,  and  the  surrogate, 
on  appeal,  held  that  the  notes  were  valueless.  The  court  say, 
page  427 :  "  We  think  the  order  of  the  surrogate  was  right.  It  is 
first  challenged  upon  the  ground  that  the  finding  of  the  surrogate 
that  the  notes  were  valueless  was  without  evidence.  We  are 
satisfied  that  the  testimony  of  the  executor  as  to  the  declarations 
of  the  testator  is  incompetent  evidence  of  the  value  of  the  notes, 
and  it  is  not  proof  upon  which  a  finding  of  the  surrogate  can  be 
made  or  sustained.  At  folios  64  and  65  of  the  record,  however, 
the  executor  swears  without  qualification  that  these  notes  were 
valueless.  This  evidence  was  given  without  objection.  The 
executor  was  not  cross-examined  thereupon.  While  the  witness 
has  stated  a  conclusion  of  fact,  which  under  proper  objection 
would  have  been  excluded  as  improper  in  form,  nevertheless  no 
objection  was  made.  The  presumption  is  made  that,  if  the  ob- 
jection had  been  made,  the  form  of  the  question  would  have 
been  corrected  to  ask  for  the  facts  from  which  this  conclusion 
was  drawn.  The  Comptroller  cannot  now  be  heard  to  say  that 
the  fact  as  to  the  value  of  the  notes  was  found  without  sufficient 
evidence.2 

"  The  appellant  further  contends  that,  notwithstanding  the 
insolvency  of  the  makers,  inasmuch  as  the  notes  are  given  as 
legacies  to  the  makers  themselves,  they  should  be  assessed  at 
their  face  value.  It  will  hardly  be  claimed  that  if  these  notes 
were  given  by  the  will  to  legatees  other  than  the  makers  they 
should  not  be  appraised  at  their  market  value.  Upon  this  the 
statute  is  clear.  In  chapter  908  of  the  Laws  of  1896,  under 
which  this  tax  is  assessed,  this  rule  of  appraisal  is  unmistakably 
stated.  In  §  230  pro  vision  .is  made  for  the  appointment  of  'a 
competent  person  as  appraiser  to  fix  the  fair  market  value '  of 
property  subject  to  this  tax.  In  §  231  the  appraiser  'shall  at 
such  time  and  place  appraise  the  same  at  its  fair  market  value  as 
herein,  prescribed.'  In  §232,  'The  surrogate  shall  forthwith, 


162  N.   Y.   613  239 

as  of  course,  determine  the  cash  value  of  all  estates.'  In  §  222 
of  the  act,  'Every  such  tax  shall  be  and  remain  a  lien  upon 
the  property  transferred  until  paid,  and  the  person  to  whom  the 
property  is  so  transferred  and  the  *  *  *  executors  *  *  * 
of  every  estate  so  transferred,  shall  be  personally  liable  for  such 
tax  until  its  payment.'  In  §  224,  the  executor  is  forbidden 
to  deliver  the  legacy  until  the  payment  of  the  tax,  and  he  has 
power  to  sell  the  property  to  collect  the  tax  thereon. 

"The  statute,  it  will  be  seen,  thus  plainly  provides  for  the 
appraisal  of  all  property  at  its  fair  market  value.  No  exception 
is  made  in  cases  where  promissory  notes  are  given  to  their 
makers,  and  the  court  is  not  authorized  to  read  into  the  statute 
any  such  exception."  3 

Vide  §§  224,  230  and  231 ;  Matter  of  Hull,  109  App.  Div.  248-250. 

1  Matter  of  Elizabeth  H.  Smith,  40  App.  Div.  480. 

2  Matter  of  Yerkes,  N.  Y.  Law  Journal,  December  5,  1912,  opinion 
quoted  sub  Testimony. 

3  Matter  of  Manning,  169  N.  Y.  449;  Matter  of  Wood,  40  Misc.  155. 


1900. 

MATTER  OF  APPLICATION  OF  MICHAEL  COOGAN  FOR 
A  WRIT  OF  MANDAMUS,  162  N.  Y.  613,  affirms,  with- 
out opinion,  45  App.  Div.  628,  which  affirms,  without 
opinion,  27  Misc.  563. 

The  petitioner  sought  by  this  proceeding  to  compel  the  re- 
funding of  a  tax  which  he  claimed  was  erroneously  paid  on  the 
transfer  to  him  of  certain  registered  bonds  of  the  United  States, 
under  the  will  of  Jesse  B.  Casterline,  who  died  November  14, 
1894.  By  an  order  of  the  Surrogate's  Court  a  tax  was  assessed 
upon  this  legacy  including  these  bonds,  under  the  law  relating 
to  taxable  transfers  of  property.  The  amount  of  this  tax  upon 
the  bonds  was  paid  by  the  executors  of  the  will  to  the  county 
treasurer  of  Livingston  county,  May  13,  1895,  and  was  in  turn 
charged  against  the  legacy  of  this  petitioner,  and  deducted  there- 
from as  appears  by  the  final  account  of  the  executors,  which  was 
judicially  passed  and  settled  by  said  Surrogate's  Court  hi  1895. 
On  January  9,  1899,  upon  the  application  of  this  petitioner,  the 
same  Surrogate's  Court,  after  notice  to  the  comptroller  of  the 
State,  made  an  order  that  so  much  of  the  order  dated  the  6th  day 
of  May,  1895,  as  fixed  and  decreed  a  tax  upon  the  transfer  of 
said  registered  bonds  of  the  United  States  be  vacated,  set  aside 
and  in  all  things  held  for  naught.  A  demand  was  then  made 


240  THE   COURT   OF   APPEALS   DECISIONS 

upon  the  comptroller  to  direct  the  county  treasurer  of  Livingston 
county  to  refund  to  the  petitioner  the  amount  of  such  tax,  pur- 
suant to  §  225  of  the  Tax  Law.  The  comptroller  having  refused 
to  comply  with  that  demand  the  petitioner  now  seeks  to  compel 
him  so  to  do  under  the  section  last  referred  to. 

Under  the  statute  in  force  at  death  of  decedent  United  States 
bonds  were  not  taxable.  The  court  say,  page  565:  "The  sur- 
rogate had  no  jurisdiction  to  assess  a  tax  on  the  transfer  of  these 
bonds  and  the  tax  was  not  merely  an  erroneous  one,  but  illegal 
for  want  of  any  jurisdiction  to  impose  it.  The  comptroller,  how- 
ever, questions  the  power  of  the  surrogate  to  modify  or  vacate 
the  order  assessing  the  tax  on  the  transfer  of  these  bonds  after 
the  time  to  appeal  therefrom  has  expired. 

"Under  the  Code  of  Civil  Procedure,  section  2481,  subdivi- 
sion 6,  the  surrogate  has  power  to  open,  vacate,  modify  or  set 
aside  a  decree  or  order  of  his  court '  in  a  like  case,  and  in  the  same 
manner  as  a  court  of  record  and  of  general  jurisdiction  exercises 
the  same  powers.'  This  may  be  done  upon  the  application  of 
any  one  for  sufficient  reason  in  furtherance  of  justice.  Matter  of 
Flynn,  136  N.  Y.  287;  Ladd  v.  Stevenson,  112  N.  Y.  325.  The 
case  presented  to  the  surrogate  was  not  one  where  the  order  or 
decree  was  sought  to  be  modified  9r  vacated  because  of  an  irregu- 
larity, but  because  it  was  void  as  having  been  made  without 
jurisdiction." 

As  to  statute  of  limitations  re  refund  vide  Matter  of  Hoople,  179  N.  Y. 
308  and  §  225.  Matter  of  Plummer,  161  N.  Y.  631,  sustained  sub  worn. 
Plummer  v.  Coler,  178  U.  S.  115,  as  to  United  States  bonds. 

As  to  power  of  Surrogate  to  vacate  decree  vide  Matter  of  Scrimgeour, 
175  N.  Y.  507;  Matter  of  Willets,  119  App.  Div.  119-124,  affirmed,  without 
opinion,  190  N.  Y.  527;  Matter  of  Niven,  29  Misc.  550;  Morgan  v.  Cowie, 
49  App.  Div.  612-615;  Matter  of  Wallace,  28  Misc.  603-606;  Matter  of 
von  Post,  35  Misc.  367;  Matter  of  Buckingham,  106  App.  Div.  13-17; 
Matter  of  Jones,  54  Misc.  202-205;  Matter  of  Weiler,  122  N.  Y.  Supp. 
608,  affirmed,  without  opinion,  139  App.  Div.  905;  Matter  of  Townsend, 
153  App.  Div.  85;  Matter  of  Scott,  208  N.  Y.  602. 


1901. 

MATTER  OF  WILLIAM  H.  VANDERBILT,  163  N.  Y.  597, 

affirms,  on  opinion  below,  50  App.  Div.  246.    Same  case 

in  166  N.  Y.  640. 

The  testator  died  December  8, 1885.  The  court  say,  page  247 : 
"The  single  question  arising  on  this  appeal  may  be  stated  as 
follows:  Is  the  right  of  succession  to  the  trust  fund  created  by  the 


163  N.  Y.  597  241 

will  of  William  H.  Vanderbilt  and  as  to  which  a  power  of  appoint- 
ment was  given  to  the  testator's  son  Cornelius  Vanderbilt,  sub- 
ject to  the  imposition  of  a  transfer  tax  under  the  provisions  of 
chapter  284  of  the  Laws  of  1897?  The  question  arises  upon  the 
following  facts: 

"  William  H.  Vanderbilt  died  hi  1885,  and  his  will  was  admitted 
to  probate  in  the  month  of  December  of  that  year.  The  trust 
fund  involved  hi  this  proceeding  was  established  hi  favor  of  his 
son  Cornelius,  who  was  to  enjoy  the  income  for  life.  The  testa- 
tor directed  that  upon  the  death  of  Cornelius  the  fund  should  be 
paid  to  his  lawful  issue  hi  such  shares  or  proportions  as  Cornelius 
might  by  his  last  will  have  directed  or  appointed,  and  hi  default 
of  such  appointment,  the  gift  is  made  directly  to  the  issue  with 
an  alternative  disposition  on  failure  of  such  issue. 

"Cornelius  Vanderbilt  died  in  1899,  leaving  a  last  will  and 
testament,  which  was  duly  admitted  to  probate,  and  in  and  by 
which  he  exercised  the  power  given  by  the  will  of  his  father  by 
appointing  a  certain  specified  portion  of  the  fund  to  one  of  his 
sons  and  directing  that  the  balance  be  equally  divided  among 
his  other  children.  At  the  tune  of  the  death  of  William  H.  Van- 
derbilt, this  fund,  or  the  right  of  succession  to  it,  was  not  taxable 
under  the  Collateral  Inheritance  Tax  Law.1  The  trustees  of 
the  fund  held  and  administered  it  until  the  death  of  Cornelius 
Vanderbilt. 

"In  1897  an  amendment  of  subdivision  5  of  section  220  of  the 
Tax  Law  was  passed,  which  provides  that  whenever  any  person 
shall  exercise  a  power  of  appointment  derived  from  any  dis- 
position of  property  made  either  before  or  after  the  passage  of 
the  amendment,  such  appointment  when  made  shall  be  deemed 
a  transfer,  taxable  under  the  provisions  of  the  act,  hi  the  same 
manner  as  though  the  property  to  which  such  appointment  re- 
lates belonged  absolutely  to  the  donee  of  such  power  and  had 
been  bequeathed  or  devised  by  such  donee  by  will. 

"In  December,  1899,  a  trustee  of  the  fund  under  the  will  of 
William  H.  Vanderbilt,  presented  a  petition  to  the  surrogate 
setting  forth  the  creation  of  the  trust  fund  (with  other  trusts  of 
a  similar  character  for  the  benefit  of  other  persons),  and  that 
through  proceedings  taken  hi  1887  to  assess  and  determine  the 
tax  upon  legacies  made  under  the  will  of  William  H.  Vanderbilt, 
it  was  in  effect  determined  that  the  fund  herein  referred  to  was 
not  subject  to  any  transfer  or  inheritance  tax.  The  petition  sets 
forth  the  exercise  of  the  power  of  appointment  by  Cornelius 
16 


242  THE    COURT   OF   APPEALS   DECISIONS 

Vanderbilt  and  the  names  of  his  children,  and  that  the  comp- 
troller claims  that  the  fund  or  some  portion  of  it  may  be  sub- 
ject to  the  payment  of  a  tax  by  reason  of  the  provisions  of  chap- 
ter 284  of  the  Laws  of  1897,  and  he  prays  that  it  be  adjudged  by 
the  surrogate  that  neither  said  fund  nor  any  part  thereof  is  liable 
to  any  such  tax  by  reason  of  any  of  the  said  provisions  or  other- 
wise. This  petition  is  in  the  nature  of  an  application  to  the  sur- 
rogate to  determine  the  subject  of  taxation  as  applicable  to  this 
trust  fund,  and  the  matter  was  submitted  in  that  aspect  upon  a 
stipulation  as  to  agreed  facts.  *  *  * 

"  (Page  248.)  The  provision  of  the  amendment  of  1897  covers 
directly  and  in  terms  the  present  case.  The  fund,  or  the  right  of 
succession  to  the  fund,  has  never,  as  matter  of  fact,  been  taxed, 
and  we  think  the  power  to  impose  a  tax  was  not  exhausted  by  the 
proceedings  in  the  Surrogate's  Court  for  the  imposition  of  a  tax 
directly  connected  with  the  general  estate  of  William  H.  Van- 
derbilt. The  real  ground  upon  which  the  contention  of  the  ap- 
pellant is  made  here,  is  that  the  execution  by  Cornelius  Vander- 
bilt of  the  power  of  appointment  related  back  to  the  will  of  his 
father,  which  gave  him  that  power,  and  that,  therefore,  every- 
thing connected  with  and  every  interest  affected  by  the  exercise 
of  that  power  is  to  be  regarded  as  coming  under  the  administra- 
tion of  William  H.  Vanderbilt's  estate  and  must  be  controlled  by 
the  law  in  operation  at  the  time  of  the  probate  of  William  H. 
Vanderbilt's  will.  *  *  * 

"  (Page  249.)  Scrutinizing  the  text  of  the  amendment  of  1897 
it  appears  that  the  direct  object  of  that  legislation  was  to  make 
the  time  at  which  the  appointee  would  become  entitled  in  pos- 
session the  time  at  which  the  tax  upon  the  right  of  succession 
should  be  imposed.  Furthermore,  the  act  constituting  the  trans- 
fer is  declared  to  be  the  exercise  of  the  power  of  appointment. 
It  is  argued  by  the  learned  counsel  for  the  appellant  that  this 
legislation  is  ineffective  because  it  impairs  contract  obligations, 
interferes  with  vested  rights  of  the  children  of  Cornelius  Vander- 
bilt and  deprives  them  (to  the  extent  of  the  tax)  of  property  with- 
out due  process  of  law.  *  *  * 

"(Page  250.)  The  argument  seems  to  be. that  when  the  Col- 
lateral Inheritance  Tax  Law  of  1885  was  passed  it  constituted 
a  contract  between  the  State  of  New  York  and  William  H. 
Vanderbilt  that  his  estate,  provided  he  should  die  while  that  law 
was  in  full  operation  and  unchanged,  might  be  disposed  of  by 
him  without  the  imposition  of  any  further  or  other  tax  upon  any 


163  N.  Y.  597  243 

rights  or  interests  acquired  under  that  will.  We  cannot  assent 
to  that  proposition.  *  *  * 

"(Page  251.)  When  he  died,  the  law  as  it  then  existed  made 
no  provision  for  the  taxation  to  the  ultimate  right  of  succession 
to  the  fund.  The  legal  title  to  it  upon  the  probate  of  his  will  was 
in  his  executors  until  they  accounted  in  the  Surrogate's  Court, 
constituted  the  fund  out  of  the  assets  of  the  estate,  and  trans- 
ferred it  from  themselves  as  executors  to  themselves  as  trustees, 
which  we  assume  in  this  case  was  done.  They  held  the  fund 
still  under  the  will  but  undistributed  and  finally  undistributable 
until  the  power  of  appointment  was  exercised  by  Cornelius 
Vanderbilt.  Meantime,  and  while  they  held  it  so  undistributed 
in  fact,  the  State,  in  the  exercise  of  its  general  power  of  taxation, 
found  it  expedient  to  tax  the  right  to  the  succession,  which  right 
had  not  theretofore  been  taxed,  making  the  transfer  consist  in 
that  act  by  which  each  of  the  appointees  became  entitled  to 
claim  and  to  receive  the  particular  or  specific  distributive  share 
allotted  to  him.  *  *  * 

"  (Page  252.)  While  the  appointees  take  by  relation  back  so  as 
to  derive  their  title  under  William  H.  Vanderbilt's  will,  they 
must  take  their  specific  shares  in  designated  amounts  from  the 
time  of  the  execution  of  the  power,  and  we  think  that  the  au- 
thority of  the  State  to  impose  a  tax  on  the  right  of  succession 
continued  until  the  time  at  which  the  extent  of  that  right  was 
finally  fixed  by  the  exercise  of  the  power  of  appointment." 

Vide  subdivision  6  of  §  220.  Matter  of  Potter,  51  App.  Div.  212;  Matter 
of  Rogers,  71  App.  Div.  461,  affirmed,  on  opinion  below,  172  N.  Y.  617; 
Matter  of  Delano,  176  N.  Y.  486-492,  sustained  in  205  U.  S.  466,  sub  nom. 
Chanler  v.  Kelsey;  Matter  of  Buckingham,  106  App.  Div.  13-18;  Matter  of 
Smith,  150  App.  Div.  805-809;  Matter  of  Warren,  62  Misc.  444-447;  Mat- 
ter of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion  quoted  sub  Power 
of  Appointment. 

Matter  of  Howe,  86  App.  Div.  286,  affirmed,  without  opinion,  176  N.  Y. 
570;  Matter  of  Burgess,  204  N.  Y.  265;  Matter  of  Haight,  152  App.  Div. 
228;  Matter  of  Ripley,  192  N.  Y.  536;  People  ex  rel.  Ripley  v.  Williams, 
69  Misc.  402. 

1  Transfers  to  persons  of  1%  class  of  personal  property  were  first  made 
taxable  by  Laws  of  1891,  chapter  215,  in  effect  April  20, 1891,  and  it  was  not 
until  March  16,  1903,  that  transfers  of  real  property  situated  in  New  York 
to  persons  of  1%  class  were  made  taxable  by  Laws  of  1903,  chapter  41. 
It  was  held  in  Matter  of  Stewart,  131  N.  Y.  274,  that  under  the  1885  act 
transfers  to  collaterals  by  power  of  appointment  were  taxable  when  the 
power  was  exercised. 


244  THE   COURT   OF  APPEALS   DECISIONS 

1900. 

MATTER  OF  ELBRIDGE  G.  SPAULDING,  163  N.  Y.  607, 
affirms,  without  opinion,  49  App.  Div.  541,  which  affirmed 
22  Misc.  420. 

Elbridge  G.  Spaulding  died  a  resident  on  May  5,  1897, 
eighty-seven  years  of  age.  (Page  544)  He  "had  never  been  sick 
or  required  the  services  of  a  physician  until  about  the  middle 
of  March,  1897,  less  than  two  months  prior  to  his  death.  In 
the  winter  of  1895-1896,  a  few  months  after  the  death  of  his 
wife,  the  deceased  became  quite  feeble  physically,  which  feeble- 
ness gradually  increased  until  his  death,  which  was  caused,'  as 
stated  in  the  certificate  of  the  attending  physician,  by  'old  age.' 
The  deceased  was  at  no  time  afflicted  with  an  acute  disease;  there 
was  simply  a  gradual  depletion  of  physical  power,  commencing 
shortly  after  the  death  of  his  wife  in  August,  1895,  which  be- 
came more  and  more  marked  until  his  death,  two  years  later; 
but  during  all  that  time  his  mental  faculties  remained  unim- 
paired." 

In  November,  1895,  he  told  his  son  (page  544)  "in  substance 
that  he  had  gotten  to  be  a  pretty  old  man,  or  a  very  old  man; 
that  his  estate  was  a  burden  to  him;  that  he  intended  to  give 
it  ultimately  to  his  children,  and  proposed  to  give  some  of  it 
to  them  at  that  time.  The  deceased  thereupon  gave  to  the  son 
securities  amounting  in  value  to  $1,038,900,  to  be  divided  be- 
tween himself  and  the  other  two  children  equally.  The  son 
took  the  securities,  locked  them  up  in  a  box,  labeled  it  with  the 
names  of  the  three  children,  and  put  it  back  where  it  had  been 
kept  by  the  father.  In  July,  1896,  he  again  sent  for  his  son 
and  repeated  in  substance  the  statement  which  he  made  when 
the  first  gift  of  securities  was  made;  said  that  he  wanted  to  in- 
crease the  amount  so  that  each  of  his  children  would  have 
$500,000,  and  told  his  son  to  make  up  a  list  of  bonds  for  that 
amount  and  submit  it  to  him.  The  son  did  so  two  or  three  days 
later;  then  the  deceased  told  the  son  to  go  to  the  safe  and  get 
the  bonds,  which  he  did;  these  bonds  amounted  to  $461,100, 
and  with  the  securities  previously  given  aggregated  $1,500,000, 
or  $500,000  to  each  of  the  children. 

"These  securities  were  placed  in  the  box  containing  the  secu- 
rities which  had  previously  been  given,  and  they  were  all  then 
deposited  by  the  son  in  the  safe  deposit  vaults  of  the  Marine 
Bank  in  the  city  of  Buffalo,  deposited  in  a  box  taken  in  the 


163  N.  Y.   607  245 

^ 

name  of  the  donees,  who  had  the  combination,  so  that  any  of 
them  had  access  to  it. 

"The  testator  never  saw  any  of  the  securities  after  they  were 
given  to  the  respondents  as  above  stated;  never  exercised  or 
attempted  to  exercise  any  control  over  them  in  any  respect 
whatsoever.  All  the  interest  coupons  which  remained  attached 
to  the  securities  were  collected  by  and  paid  to  the  donees;  each 
of  the  donees  was  assessed  a  small  amount  on  account  of  being 
the  owner  of  such  securities,  and  the  assessment  on  the  testa- 
tor's property  was  reduced  proportionately,  but  such  assess- 
ments and  reduction  did  not  represent  the  actual  value  of  the 
securities  transferred." 

The  court  say,  page  542:  "The  sole  question  presented  by 
this  appeal  is,  were  the  gifts  made  by  the  decedent  to  his  three 
children,  aggregating  $1,500,000,  made  in  contemplation  of 
death,  within  the  meaning  of  the  statute? 

Chapter  399  of  the  Laws  of  1892,  which  was  in  force  when 
the  first  gift  in  question  was  made,  provides: 

"  'Section  1.  Taxable  Transfers. — A  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  property,  real  or  personal, 
of  the  value  of  $500  or  over,  or  of  any  interest  therein  or  in- 
come therefrom,  in  trust  or  otherwise,  to  persons  or  corpora- 
tions not  exempt  by  law  from  taxation  on  real  or  personal  prop- 
erty in  the  following  cases.  *  *  * 

"  '3.  When  the  transfer  is  of  property  made  by  a  resident 
or  by  a  non-resident,  when  such  non-resident's  property  is 
within  this  state,  by  deed,  grant,  bargain,  sale  or  gift  made  hi 
contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect  in  possession  or  enjoyment,  at  or 
after  such  death.'  *  *  * 

"These  provisions  were  incorporated  verbatim  hi  chapter  908 
of  the  Laws  of  1896,  section  220,  which  was  the  statute  hi  force 
at  the  time  the  second  gift  in  question  was  made,  and  at  the 
time  of  the  decedent's  death.  *  *  * 

"  (Page  546.)  Were  the  gifts  in  question  made  'hi  contempla- 
tion of  death,'  within  the  meaning  of  the  statute? 

"It  will  not  be  contended  that  a  literal  construction  of  the 
provision  of  the  statute  would  be  reasonable,  or  was  intended 
by  the  legislature. 

"If  a  person,  fully  realizing  that  his  death  is  to  occur  within  a 
few  hours,  should  convey  by  deed  real  estate  and  receive  the 
full  consideration  therefor,  it  would  not  be  claimed  that  the 


246  THE    COURT   OP   APPEALS   DECISIONS 

real  estate  so  conveyed  would  be  subject  to  the  tax  in  question, 
notwithstanding  the  conveyance  was  clearly  made  in  contem- 
plation of  death.  Or,  if  a  person  under  such  circumstances 
should  transfer  personal  property  in  payment  of  a  just  debt, 
and  with  the  avowed  purpose  of  having  the  matter  adjusted 
before  his  death,  the  statute  would  not  apply,  and  yet  the 
transaction  would  be  within  its  provisions  if  literally  construed. 

"A  man  of  middle  age,  in  full  health  and  strength,  may  trans- 
fer his  house  and  lot  and  other  property  to  his  wife,  for  the 
purpose  of  securing  her  against  want  in  case  of  his  death  and 
declare  such  purpose  in  the  deed  of  conveyance.  Clearly  such 
conveyance  would  be  made  in  contemplation  of  death,  but  if 
the  grantor  lived  ten,  fifteen  or  thirty  years  after,  the  property 
would  not  be  subject  to  the  tax,  and  this  is  so,  notwithstanding 
the  transaction  is  within  the  precise  words  of  the  statute. 

"A  father  may  have  been  engaged  in  business  during  a  life- 
time, in  which  he  has  accumulated  and  has  invested  therein  a 
fortune;  he  is  becoming  old,  less  active,  more  infirm  and  feeble, 
and  less  able  to  conduct  the  business.  He  concludes  to  and 
does  give  and  transfer  the  business  to  a  trusted  son.  It  was 
not  transferred  or  received  for  the  purpose  of  evading  the  trans- 
fer tax,  but  because  the  father  wished  to  observe  the  manage- 
ment of  the  business  by  the  son  before  his  death,  and  to  be  re- 
lieved of  its  burden.  The  father  lives  five  or  ten  years  after  the 
transfer,  which  was  concededly  made  because  he  understood 
and  believed  that  death  was  not  far  distant.  So  far  as  he  knew, 
there  was  no  immediate  danger;  he  was  enjoying  the  same  de- 
gree of  health  at  the  time  he  transferred  the  business  to  his 
son  that  he  had  enjoyed  for  years  previous.  Under  such  cir- 
cumstances we  think  it  could  not  be  successfully  urged  that 
the  property  and  business  transferred  was  subject  to  tax  under 
the  statute  hi  question,  and  yet  such  a  transfer  would  fall  di- 
rectly within  its  provisions  if  given  a  literal  interpretation. 

"In  the  case  at  bar,  as  we  have  seen,  there  was  nothing  to 
indicate  to  the  decedent  at  the  time  the  gifts  in  question  were 
made  that  he  was  in  immediate  danger  of  death.  The  evidence 
only  tends  to  show  that  he  was  an  old  man;  somewhat  enfeebled; 
gradually  declining  in  physical  power.  Whether  he  was  to 
live  one,  two  or  five  years,  he  did  not  know  and  could  not  have 
known;  that  he  was  to  die  immediately  or  within  a  few  days 
he  had  no  reason  to  expect;  that  he  was  to  die  within  a  few  years 
he  knew  to  a  certainty.  *  *  * 


166  N.  Y.  602  247 

"(Page  549.)  If  we  bear  in  mind  the  distinction  between  a 
gift  inter  vivos  and  a  gift  causa  mortis,  and  that  a  gift  which 
would  otherwise  be  inter  vivos  may  become  a  gift  causa  mortis, 
if  made  in  extremis  or  under  circumstances  which  would  entitle 
the  donor  to  recover  it  back,  we  think  the  rule  may  be  stated 
to  be  that  the  property  transferred  by  gifts  inter  vivos  is  not 
taxable  under  the  provisions  of  the  Taxable  Transfer  Act,  un- 
less made  and  received  with  the  intent  and  for  the  purpose  of 
evading  its  provisions.  *  *  * 

"  (Page  550.)  That  the  gifts  in  question  were  gifts  inter  vivos, 
were  not  made  under  circumstances  which  impressed  them 
with  the  distinguishing  characteristics  of  gifts  causa  mortis, 
were  not  made  by  the  donor  or  received  by  the  donees  with  the 
purpose  or  intent  of  evading  the  provisions  of  the  statute  in 
question,  is  clearly  established  by  the  evidence;  and  we  think 
that,  under  the  authorities,  it  follows  that  the  property  which 
was  transferred  by  such  gifts,  was  not  transferred  'in  contem- 
plation of  death,'  within  the  meaning  of  the  statute,  and  is  not 
taxable  under  its  provisions." 

Vide  subdivision  4  of  §  220;  Matter  of  Hess,  110  App.  Div.  476-478, 
affirmed,  on  opinion  of  Spring,  J.,  187  N.  Y.  554;  Matter  of  Bullard,  76 
App.  Div.  207-208;  Matter  of  Baker,  83  App.  Div.  530-533,  affirmed  on 
opinion  below,  178  N.  Y.  575;  Matter  of  Demers,  41  Misc.  470-473; 
Matter  of  Graves,  52  Misc.  433-436;  Matter  of  Farrell,  N.  Y.  Law  Journal, 
January  3,  1912,  opinion  quoted  page  797;  Matter  of  McKeon,  id.,  June  8, 
1912,  opinion  quoted  page  647;  and  cases  cited  sub  Contemplation  of 
Death.  Matter  of  Keeney,  194  N.  Y.  281,  sustained  in  222  U.  S.  525, 
sub  nom.  Keeney  v.  New  York. 

Criticised  in  Matter  of  Price,  62  Misc.  149-151. 

Matter  of  Dee,  N.  Y.  Law  Journal,  December  6,  1913,  opinion  quoted 
page  645. 


1901. 

MATTER  OF  THE  APPRAISAL,  ETC.,  OF  THE  TRUST 
ESTATE  CREATED  BY  EUGENE  G.  CRUGER  BY  A 
DEED  OF  TRUST,  166  N.  Y.  602,  which  affirms,  on 
opinion  below,  64  App.  Div.  405. 

Eugene  G.  Cruger  by  deed  of  trust,  dated  September  13, 1892, 
in  which  his  wife  joined,  assigned  and  transferred  to  two  trustees 
certain  personal  property,  in  trust;  (1)  To  keep  the  principal  in- 
vested as  directed  and  collect  the  income,  and,  after  deducting 
taxes  and  expenses,  during  his  life  to  pay:  To  his  daughter 
Angele,  her  executors  and  administrators,  the  sum  of  $1,200 


248  THE    COURT   OF   APPEALS   DECISIONS 

annually  in  equal  monthly  payments;  and  any  balance  of  said 
income  to  him,  the  said  Cruger.  (2)  At  his  death  to  pay  over 
the  trust  fund  and  any  accumulated  income  to  Angele  Cruger, 
if  living,  or,  if  she  be  dead,  then  to  her  issue,  or,  in  default  of 
issue,  then  to  such  persons  as  Angele  Cruger  should  by  will  ap- 
point, or,  in  default  of  such  appointment,  then  to  such  persons 
as  would  be  entitled  to  the  same  under  the  laws  of  New  York 
had  Angele  Cruger  died  intestate  and  in  possession  of  the 
property  (except  her  mother,  Meta  K.  Cruger,  who,  by  the 
terms  of  said  instrument,  released  her  claim  thereto). 

Angele  Cruger  died  September  2,  1896,  intestate,  unmarried, 
without  issue  and  without  having  executed  her  power  of  ap- 
pointment under  said  trust  instrument. 

Eugene  G.  Cruger,  who  created  the  trust,  died  April  4,  1898, 
leaving  him  surviving  his  three  children,  half-brothers  and 
sisters  of  Angele  Cruger,  and  her  only  next  of  kin  (except  her 
mother,  who  was  excluded  from  the  succession),  and  as  such 
entitled  to  the  corpus  of  the  trust  estate. 

Held,  that  the  case  fell  squarely  within  the  terms  of  that 
portion  of  the  statute  which  provided:  "When  the  transfer 
is  of  property  *  *  *  by  deed,  grant,  bargain,  sale  or 
gift  *  *  *  intended  to  take  effect,  in  possession  or  enjoy- 
ment, at  or  after"  the  death  of  the  grantor,  vendor  or  donor. 

Vide  subdivision  4  of  §  220,  and  cases  cited  sub  Trust  Deed. 


1901. 

MATTER  OF  DAVID  DOWS,  167  N.  Y.  227,  sustained  in 
183  U.  S.  278,  sub  nom.  Orr  v.  Oilman. 

The  court  say,  page  229:  "David  Dows,  Sr.,  died  March  30th, 
1880,  leaving  as  a  part  of  his  estate  a  valuable  piece  of  real 
property  which  he  devised  to  his  trustees  in  trust  to  pay  the 
income  to  his  son  David  Dows,  Jr.,  during  life,  'And  upon  the 
death  of  my  said  son  the  said  property,  with  all  accumulations 
of  interest,  income  and  profits  shall  vest  absolutely,  and  at  once, 
in  such  of  his  children  him  surviving,  and  the  issue  of  his  de- 
ceased children  as  he  may  by  his  last  will  and  testament  desig- 
nate and  appoint,  and  in  such  manner,  and  upon  terms  as  he  may 
legally  impose.  But  in  case  my  said  son,  David  Dows,  Jr.,  die 
intestate,  then  said  property,  with  all  accumulations  of  interest, 
income  and  profits  shall  vest  absolutely  and  at  once  in  his  chil- 


167  N.  Y.  227  249 

dren  him  surviving,  share  and  share  alike,  and  the  issue  of  his 
deceased  children  (such  issue  to  take  share  and  share  alike  the 
portion  which  the  parent  would  have  received  if  living)  to  be 
paid  to  them  at  the  times  and  in  the  proportion  following,  to 
wit.'  A  similar  devise  was  made  of  a  share  of  the  testator's 
residuary  estate.  The  will  gave  the  trustees  a  power  of  sale 
over  the  real  property,  which  was  exercised  during  the  life  of 
David  Dows,  Jr.,  and  a  large  portion  of  the  proceeds  invested 
in  the  stocks  of  corporations. 

"David  Dows,  Jr.,  died  January  13th,  1899,  leaving  a  last 
will  and  testament,  by  which  he  exercised  the  power  of  appoint- 
ment given  him  by  the  will  of  his  father,  in  favor  of  his  three 
sons.  By  his  will  he  gave  to  each  of  his  sons  the  income  of  three 
undivided  forty-eighths  till  his  son  Robert  attained  the  age  of 
twenty-one  years  or  sooner  died,  of  four  forty-eighths  until 
Robert  attained  twenty-five  years  or  sooner  died,  and  nine 
forty-eighths  until  Robert  attained  thirty  years  or  sooner  died. 
Thus  each  son  was  given  the  income  of  sixteen  forty-eighths 
or  one-third  of  the  property.  At  the  termination  of  these  life 
estates  the  principal  was  given  to  another  son.  That  is  to 
say,  to  B  was  given  the  principal  of  the  share,  the  income  of 
which  A  had  been  receiving;  to  C  the  principal  of  what  had 
been  B's  share,  and  to  A  the  principal  of  C's  share.  In  result 
each  son  receives  one-third  of  the  property  absolutely,  for  the 
will  provides  'that  each  interest  for  life  or  remainder  shall 
vest  absolutely  and  at  once  upon  my  death,  in  legal  and  not 
equitable  ownership,  and  without  contingency.'  But  each  son 
instead  of  being  given  the  remainder  in  his  own  share  after 
Robert  arrives  at  the  age  of  thirty  years  is  given  the  remainder 
in  another  son's  share,  though  the  shares  are  exactly  equal." 

The  first  point  raised  by  the  estate  was  that  the  tax  imposed 
under  the  amendment  of  April  16th,  1897  (chap.  284),  to  the 
Taxable  Transfer  Act  of  1896,  upon  transfers  made  under  a 
power  of  appointment,  is  a  tax  on  property  and  not  on  the  right 
of  succession,  and  that,  therefore,  so  much  of  the  fund  as  was 
invested  in  incorporated  companies  liable  to  taxation  on  their 
own  capital  and  in  certain  bonds  of  the  state  of  New  York  and 
bonds  of  the  city  of  New  York  exempt  from  taxation  by  statute, 
was  not  subject  to  the  tax.  The  court  quote  (page  231)  from 
Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283:  "They 
are  based  on  two  principles:  1.  An  inheritance  tax  is  not  one  on 
property,  but  one  on  the  succession.  2.  The  right  to  take 


250  THE    COURT   OF   APPEALS   DECISIONS 

property  by  devise  or  descent  is  the  creature  of  the  law,  and 
not  a  natural  right — a  privilege  and,  therefore,  the  authority 
which  confers  it  may  impose  conditions  upon  it.  From  these 
principles  it  is  deduced  that  the  states  may  tax  the  privilege, 
descriminate  between  relatives  and  between  these  and  strangers, 
and  grant  exemptions,  and  are  not  precluded  from  this  power 
by  the  provisions  of  the  respective  state  constitutions  requiring 
uniformity  and  equality  of  taxation." 

The  estate  also  raised  the  point  that  the  title  of  the  present 
owners  is  deduced  from  the  will  of  David  Dows,  Sr.,  and  not 
from  that  of  his  son  David  Dows,  Jr.  The  court  say,  page  231 : 
"Whatever  be  the  technical  source  of  title  of  a  grantee  under  a 
power  of  appointment,  it  cannot  be  denied  that  in  reality  and 
substance  it  is  the  execution  of  the  power  that  gives  to  the 
grantee  the  property  passing  under  it.  The  will  of  Dows,  Sr., 
gave  his  son  a  power  of  appointment  to  be  exercised  only  in  a 
particular  manner,  to  wit,  by  last  will  and  testament.  If,  as 
said  by  the  Supreme  Court  of  the  United  States,  the  right  to 
take  property  by  devise  is  not  an  inherent  or  natural  right,  but 
a  privilege  accorded  by  the  state  which  it  may  tax  or  charge  for, 
it  follows  that  the  right  of  a  testator  to  make  a  will  or  testament- 
ary instrument  is  equally  a  privilege  and  equally  subject  to 
the  taxing  power  of  the  state.  When  David  Dows,  Sr.,  devised 
this  property  to  the  appointees  under  the  will  of  his  son,  he 
necessarily  subjected  it  to  the  charge  that  the  state  might  im- 
pose on  the  privilege  accorded  to  the  son  of  making  a  will." 

Another  objection  urged  against  the  order  appealed  from  is, 
that  at  the  death  of  David  Dows,  Sr.,  the  property  was  real 
estate  on  which  there  was  at  that  time  no  transfer  tax  as  against 
lineal  descendents  of  the  testator.  In  Matter  of  Sutton  (3  App. 
Div.  208;  affirmed  on  opinion  below,  149  N.  Y.  618)  the  will 
directed  an  equitable  conversion  of  the  realty  into  personalty. 
It  was  held  that  the  actual  form  in  which  the  property  existed 
at  the  time  of  the  testator's  death  determined  its  liability  to  a 
transfer  tax,  and  that  being  real  estate,  it  was  exempt.  The 
same  rule  governs  the  present  case.  At  the  time  of  the  execu- 
tion of  the  power  of  appointment  the  property  was  personalty, 
and  the  transfer  thereof  taxable.1 

The  estate  also  contended  that  the  legatees  or  devisees  of 
the  remainders  are  not  subject  to  taxation  until  the  precedent 
estates  terminate  and  the  remainders  vest  in  possession.  The 
court  say,  page  233:  "Under  a  statute  substantially  the  same 


167  N.  Y.  280  251 

in  phraseology,  this  court  held,  by  Finch,  J.,  in  Matter  of 
Hoffman  (143  N.  Y.  327),  that  mere  possibilities  or  chances 
of  the  acquisition  of  property,  including  not  only  contingent 
estates,  but  also  estates  technically  vested,  but  liable  to  be 
divested,  were  not  liable  to  taxation  until  the  contingencies 
had  passed  or  been  fulfilled,  and  the  right  to  succeed  to  property 
become  certain  and  absolute.  This  doctrine  has  no  application 
to  the  remainders  given  to  the  sons  of  David  Dows,  Jr.  They 
are  absolute  and  not  subject  to  be  divested  or  to  fail  in  any 
contingency  whatever.  *  *  *  By  the  aid  of  the  table  of 
annuities,  upon  the  faith  of  which  large  sums  are  constantly 
distributed  by  the  courts,  the  present  value  of  these  remainders 
is  capable  of  ready  computation." 

Vide  subdivision  6  of  §  220  and  §  230;  Matter  of  Cooksey,  182  N.  Y.  92; 
Matter  of  Lansing,  182  N.  Y.  238-247-248;  Matter  of  Hull,  111  App.  Div. 
322-325,  affirmed,  without  opinion,  186  N.  Y.  586;  Matter  of  Kidd,  188 
N.  Y.  274-278;  Matter  of  Fearing,  200  N.  Y.  340-344;  Matter  of  Bushnell, 
73  App.  Div.  325;  affirmed,  without  opinion,  172  N.  Y.  649;  Matter  of 
Rogers,  71  App.  Div.  461-465,  affirmed,  on  opinion  below,  172  N.  Y.  617; 
Matter  of  Miller,  77  App.  Div.  473-481;  Isham  v.  N.  Y.  Assn.  for  the  Poor, 
177  N.  Y.  218-223;  Matter  of  Delano,  176  N.  Y.  486-493,  sustained  in  205 
U.  S.  466,  sub  nom.  Chanler  v.  Kelsey;  Matter  of  Buckingham,  106  App. 
Div.  13-19;  Matter  of  Smith,  150  App.  Div.  805-809;  Matter  of  Runcie, 
36  Misc.  607;  Matter  of  Babcock,  37  Misc.  445,  affirmed,  without  opinion, 
81  App.  Div.  645;  Matter  of  Warren,  62  Misc.  111-147;  Matter  of  Kissel, 
65  Misc.  443-444,  affirmed,  without  opinion,  142  App.  Div.  934;  Matter  of 
Frazier,  N.  Y.  Law  Journal,  March  28,  1912,  opinion  quoted  page  778. 
«  Matter  of  Penfold,  142  N.  Y.  Supp.  678-680. 
1  Matter  of  Tucker,  27  Misc.  616. 


1901. 

MATTER  OF  ZEFITA,  COUNTESS  DE  ROHAN-CHABOT, 
167  N.  Y.  280. 

Henry  Heyward,  the  father  of  the  Countess,  died  in  1874,  a 
resident  of  the  city  of  New  York.  By  his  will  (page  282)  "he 
directed  that  his  property,  after  the  payment  of  debts  and  a 
certain  legacy,  be  divided  into  three  equal  shares,  only  one  of 
which  is  involved  in  this  proceeding.  He  bequeathed  to  his 
wife  the  one-third  share  in  controversy  here,  for  life,  or  during 
the  time  that  she  should  remain  his  widow;  the  remainder  he 
gave  to  his  son  and  daughter.  He  vested  in  his  widow  the  power 
to  appoint  said  remainders  to  such  of  his  lineal  descendents 


252  THE    COURT   OF   APPEALS   DECISIONS 

as  she,  by  her  will,  might  direct.  The  wile  alone  qualified  as 
executrix,  and  prior  to  the  year  1880  she  had  distributed  the 
estate  and  received  her  final  discharge.  The  son  died  in  the 
year  1879,  sixteen  years  before  the  decease  of  his  mother,  who 
died  in  1895,  having  exercised  the  power  of  appointment  in 
her  will  in  favor  of  her  daughter.  The  mother's  will  was  of- 
fered for  probate  in  the  county  of  New  York,  and,  after  contest, 
admitted  to  probate  on  the  29th  day  of  February,  1896.  It 
so  happened  that  the  Countess  died  on  that  day  in  the  city  of 
Paris,  where  she  resided.  The  Countess  was  made  the  residu- 
ary legatee  under  her  mother's  will.  The  son,  Frank,  who  died 
in  the  year  1879,  devised  and  bequeathed  his  property  to  his 
mother  for  life  and  the  remainder  to  his  sister.  The  Countess, 
in  a  codicil  to  her  will,  constituted  the  appellant,  Jennie  McLean, 
her  residuary  legatee.  Mrs.  Heyward,  the  mother,  was  not 
only  at  the  time  of  her  death,  in  the  enjoyment  of  the  life  estate 
left  her  by  her  husband  and  son,  but  was  also  possessed  of  a 
considerable  amount  of  personal  property  in  her  own  right. 
The  will  of  the  Countess,  which  was  also  contested,  was  admitted 
to  probate  in  the  county  of  New  York  on  the  19th  day  of  Janu- 
ary, 1898.  Mrs.  Heyward,  her  daughter,  and  Miss  Jennie 
McLean  all  resided  in  Paris,  France." 

The  court  (page  283)  "treated  the  property  liable  to  taxa- 
tion as  divided  into  three  groups — that  which  the  mother  took 
for  life  under  the  will  of  her  son,  the  remainder  passing  at  her 
death  to  the  Countess;  that  in  which  the  mother  was  vestefl 
with  an  estate  for  life  under  the  will  of  her  husband,  with  re- 
mainder to  the  Countess;  that  owned  by  the  mother  at  the 
time  of  her  death  and  passing  under  her  will,  which  named  the 
Countess  as  residuary  legatee." 

Held,  (page  283)  "that  the  two  estates  in  remainder,  which 
vested  absolutely  in  the  Countess  on  the  death  of  her  mother 
under  her  father's  and  brother's  wills,  respectively,  were  tax- 
able in  passing  to  the  appellant,  Miss  McLean,  as  residuary 
legatee  of  the  Countess,"  and  "that  the  amount  to  which  the 
Countess  was  entitled  as  the  residuary  legatee  under  her  moth- 
er's will  was  not  taxable,  it  appearing  that  there  had  been  no 
settlement  of  the  executor's  accounts  under  the  will,  and,  con- 
sequently, the  amount  of  the  residuary  estate,  if  any  there 
should  be,  was  unascertained."  l 

Vide  subdivision  2  of  §  220,  and  §  243  for  law  relating  to  transfers  subse- 
quent to  amendment  by  chapter  732,  Laws  of  1911,  in  effect  July  21,  1911. 


168  N.  Y.  6TO  253 

As  to  law  prior  to  1911  amendment  vide  Matter  of  Clinch,  44  Misc.  190, 
affirmed,  180  N.  Y.  300.  For  present  law  in  non-resident  estates  vide 
supra,  page  133. 

Vide  etiam  Matter  of  Lord,  111  App.  Div.  152-157,  affirmed,  without 
opinion,  186  N.  Y.  549,  sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn; 
Matter  of  Huber,  86  App.  Div.  458-461;  Matter  of  Ames,  141  N.  Y.  Supp. 
793-796. 

1  Matter  of  Clinch,  180  N.  Y.  300-303;  Matter  of  Cans,  N.  Y.  Law 
Journal,  April  13, 1912,  opinion  quoted,  post,  page  862;  Matter  of  Steny,  id., 
April  30,  1912,  post,  page  862. 


1901. 

MATTER   OF  CHARLES  P.  HUNTINGTON,  168  N.  Y. 
399. 

Testator  died  a  resident  April  20,  1900.  He  bequeathed 
money  to  several  charitable  institutions.  The  court  held  that 
under  the  statute  as  it  then  existed,  none  of  the  charitable 
institutions  were  exempt,  and  imposed  transfer  tax  upon  each 
legacy. 

Vide  §  221;  Matter  of  Watson,  171  N.  Y.  256-259;  Matter  of  Mergentime, 
129  App.  Div.  367-375,  affirmed,  on  opinion  below,  195  N.  Y.  572;  Matter 
of  Moses,  138  App.  Div.  525-526;  Matter  of  Arnot,  145  App.  Div.  708, 
affirmed,  without  opinion,  203  N.  Y.  627;  Matter  of  White,  118  App.  Div. 
869-872;  Matter  of  Kucielski,  144  App.  Div.  100;  Matter  of  Grouse,  34 
Misc.  670-674;  Matter  of  Higgins,  55  Misc.  175-178;  Matter  of  Robinson, 
80  Misc.  458-462. 

As  to  present  exemptions  vide  supra,  page  40. 


1901. 

MATTER  OF  SARAH  M.  ALTHAUSE,  168  N.  Y.  670,  affirms, 
without  opinion,  63  App.  Div.  252. 

Testator  died  a  resident  March  6,  1900.  Leasehold  interest 
in  real  property  held  to  be  personal  property,  and  therefore  a 
transfer  taxable  under  the  statute  of  1896  which  did  not  tax 
transfers  of  real  property  to  lineals. 

Vide  §  220.  Transfers  of  real  property  situate  within  the  state  first 
taxable  to  "lineals"  by  chapter  41,  Laws  of  1903,  in  effect  March  16,  1903. 
Vide  Matter  of  Vivanti,  138  App.  Div.  281  (206  N.  Y.  656),  holding  that 
perpetual  lease,  reserving  rent,  is  real  property;  Matter  of  John  H.  Rosen- 
baum,  N.  Y.  Law  Journal,  August  7,  1913,  opinion  quoted  sub  Leasehold. 


254  THE    COURT  OF   APPEALS   DECISIONS 

1902. 

MATTER  OF  GEORGE  A.  BRANDRETH,  169  N.  Y.  437, 
reverses  58  App.  Div.  576,  and  affirms  28  Misc.  468. 

Testator  died  November  15,  1897.  In  1893  he  transferred  to 
his  four  daughters  certain  stock,  reserving  to  himself  the  divi- 
dends on  said  stock  until  his  death,  and  also  the  right  to  vote 
on  said  stock.  The  appraiser  and  the  surrogate  held  that  the 
stock  so  transferred  by  Brandreth  to  his  children  was  subject 
to  tax  under  the  provisions  of  article  10  of  the  Tax  Law.  The 
Appellate  Division  by  a  divided  court  reached  a  contrary  con- 
clusion and  reversed  the  decree  of  the  surrogate  in  this  respect. 

The  court  say,  page  440:  "The  order  of  the  Appellate  Divi- 
sion does  not  recite  that  the  reversal  was  on  the  facts  and, 
therefore,  it  must  be  assumed  that  it  was  made  solely  on  the 
law,  the  facts  as  found  below  being  undisturbed  provided  there 
is  any  evidence  to  sustain  them.  *  *  *  Both  the  appraiser 
and  the  surrogate  found  that  the  transfer  was  made  in  contem- 
plation of  death,  and  if  that  inference  can  be  drawn  from  the  evi- 
dence, the  finding  is  conclusive  upon  us.  We  do  not  deem  it 
necessary,  however,  to  enter  upon  this  inquiry,  as  in  our  opinion 
on  the  conceded  facts,  the  transfer  was  subject  to  tax.  *  *  * 
(Page  441.)  By  subdivision  3,  section  220  of  the  Tax  Law,  it  is 
declared  that  a  tax  shall  be  imposed  'when  the  transfer  is  of 
property  made  *  *  *  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death.'  The  section  provides  for 
two  different  cases;  the  first  where  the  transfer  is  in  contempla- 
tion of  the  death  of  the  donor;  the  second,  where  it  is  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 
In  the  second  case,  it  is  not  necessary  that  the  transfer  should 
be  made  in  contemplation  of  death;  the  liability  to  taxation 
depends  solely  on  the  character  of  the  interest  or  estate  trans- 
ferred. *  *  *  (Page  442.)  In  Matter  of  Green  (153  N.  Y. 
223),  the  donor  transferred  personal  property  in  trust  to  apply 
the  income  to  herself  during  life  and  upon  her  death  to  divide  the 
same  among  her  nieces,  with  provision  for  substitution  in  case 
of  the  death  of  any  niece  before  the  donor.  It  was  held  that 
the  transfer  was  subject  to  the  tax.  *  *  *  In  the  Green  case 
the  donor  reserved  the  power  to  modify  the  terms  of  the  trust 
with  the  consent  of  the  trustee,  while  in  the  present  case,  the 
remainder  given  the  daughters  was  absolute,  and  not  subject 


169  N.  Y.  437  255 

to  be  divested  in  any  contingency  whatever.  But  this  differ- 
ence does  not  affect  the  statutory  liability  to  taxation,  since 
in  both  cases  the  gift  took  effect  in  possession  and  enjoyment 
only  on  the  death  of  the  donor." 

The  order  of  the  surrogate  was  affirmed.  The  stock  in  ques- 
tion was  that  of  Porous  Plaster  Company,  the  stock  of  which 
was  owned  and  controlled  by  the  Brandreth  family.  It  ap- 
peared from  the  evidence  that  there  had  been  but  one  sale,  and 
that  by  the  sheriff  of  one  share,  and  the  life  interest  in  another 
share,  which  took  place  over  a  year  before  the  decedent's 
death.  The  stock  was  valued  at  400  per  cent,  the  appraiser 
placing  a  half  of  the  value  upon  certain  secret  remedies  and 
the  good  will;  the  stock  had  earned  and  paid  for  seventeen 
years  from  48  to  60  per  cent  upon  its  par  value. 

The  surrogate  saying,  page  473:  "While  the  earning  power 
of  a  corporation  is  not  proof  of  the  value  of  its  property,  never- 
theless it  is  competent  evidence  of  value,  and  is  a  feature  to  be 
considered  in  determining  the  valuation  to  be  placed  upon  the 
stock  for  the  purposes  of  taxation." 

The  surrogate  also  said,  page  472:  "It  is  at  once  apparent 
that  it  is  practically  impossible  to  produce  expert  evidence  of  the 
market  value  of  this  particular  stock,  and  the  only  manner  of 
arriving  at  its  value  is  by  taking  into  consideration  the  actual 
property  of  the  corporation  and  its  earning  capacity.  Or- 
dinarily, it  would  be  difficult  for  an  appraiser  to  get  at  the  actual 
property  of  a  corporation  to  fix  the  value  of  its  shares.  In 
most  cases  it  would  be  impracticable  for  an  appraiser  to  attempt 
to  make  up  a  balance  sheet  of  the  assets  and  liabilities  of  a  cor- 
poration in  order  to  appraiser  its  shares,  and  this  method  can 
only  be  resorted  to,  if  practicable,  when  the  stock  has  no  market 
value  which  can  be  ascertained.  *  *  * 

"Again,  at  page  474:  Where  it  is  impossible  for  an  appraiser 
to  ascertain  a  market  value  of  the  stock  of  a  corporation  by 
reason  of  the  fact  that  there  is  none,  the  state  does  not  thereby 
lose  the  tax  upon  the  transfer.  Under  such  circumstances  the 
actual  value  will  be  presumed  to  be  the  market  value  until  the 
contrary  is  shown."  1 

Vide  subdivision  4  of  §220.  Matter  of  Hess,  110  App.  Div.  476- 
480,  affirmed,  on  opinion  of  Spring,  J.,  below,  in  187  N.  Y.  554;  Matter  of 
Keeney,  194  N.  Y.  281-285,  sustained  in  222  U.  S.  525;  Matter  of  Cornell, 
170  N.  Y.  423^25;  Matter  of  Bullard,  76  App.  Div.  207-209;  Matter  of 
Miller,  77  App.  Div.  473-483;  Matter  of  Skinner,  45  Misc.  559-563,  modi- 


256  THE    COURT   OF   APPEALS   DECISIONS 

fied  as  to  other  points,  106  App.  Div.  217;  Matter  of  John  Palmer,  117 
App.  Div.  360-366;  Matter  of  Borup,  28  Misc.  474;  Matter  of  Sharer,  36 
Misc.  502;  Matter  of  Proctor,  41  Misc.  79-82;  Matter  of  Dobson,  73  Misc. 
170;  Matter  of  Loewi,  75  id.,  57;  Matter  of  Spring,  75  id.,  586;  Matter  of 
Heiser,  N.  Y.  Law  Journal,  July  19,  1913,  opinion  quoted,  page  804. 
1  Vide  cases  cited  sub  Closely  Held  Stock,  page  612. 


1902. 

MATTER  OF  CAROLINE  REMSEN  GIHON,  169  N.  Y.  443. 

The  case  involves  the  propriety  of  the  deduction  of  three  cer- 
tain items  in  the  assessment  of  the  value  of  the  testator's  estate 
for  the  purpose  of  the  imposition  of  a  transfer  tax.  The  probate 
of  the  will  was  contested  and  in  the  proceedings  arising  on  such 
contest  a  temporary  administrator  was  appointed.  The  amount 
of  his  fees  and  disbursements  was  deducted  from  the  value  of  the 
estate.  The  appellant  challenges  the  correctness  of  this  allow- 
ance. 

The  court  say,  page  445:  "The  amount  represented  by  the 
expenditures  of  the  adminstrator  or  the  expense  of  administra- 
tion never  passes  to  the  legatee  or  next  of  kin,  and,  therefore,  is 
not  subject  to  the  tax.  This  was  the  rule  held  by  this  court  in 
Matter  of  Westurn  (152  N.  Y.  93),  though  the  appellant  claims 
that  that  case  is  authority  for  a  contrary  doctrine.  There  the 
will  was  rejected  and  the  next  of  kin  sought  a  deduction  of  the 
amount  expended  by  them  in  the  contest.  It  was  held  that  such 
a  deduction  was  properly  refused  on  the  ground  that  these  were 
expenditures  made  by  the  next  of  kin  personally  and  not  by  the 
legal  representatives  of  the  deceased  in  the  administration  of  his 
estate.  It  is  true  that  in  the  judgment  which  finally  rejected  the 
will  the  costs  of  the  parties  were  charged  upon  the  estate,  but, 
as  pointed  out  by  Chief  Judge  Andrews,  such  judgment  was  in 
reality  merely  a  judgment  in  favor  of  their  attorneys  against  the 
parties  themselves." 

One-half  of  the  residuary  estate  was  left  in  trust,  the  income 
to  go  to  the  testator's  daughter  during  life  and  upon  her  death 
the  principal  to  her  issue,  or,  in  default  of  issue,  over.  The  surro- 
gate deducted  the  commissions  of  the  trustees  from  the  amount 
of  the  estate.  The  court  say,  page  446:  "There  is  a  distinction 
that  may  be  made  between  the  commissions  of  executors  or  ad- 
ministrators whose  appointment  is  an  absolute  essential  to  the 
lawful  liquidation  of  an  estate  and  those  of  trustees  who  are  ap- 


169  N.  Y.  443  257 

pointed  solely  for  the  protection  of  the  property  of  the  bene- 
ficiary, and  it  may  be  urged  that  such  latter  commissions  should 
be  considered  as  an  expenditure  for  his  benefit.  Whatever  force 
there  may  be  in  this  view,  we  think  the  deduction  of  the  trustees' 
commissions  is  justified  and  required  by  section  227  (now  226) 
of  the  Tax  Law  itself,  which  prescribes  that  any  legacy  or  devise 
to  trustees  in  excess  of  their  commissions  allowed  by  law  shall 
be  taxable,  thus  necessarily  implying  that  legal  commissions 
shall  be  exempt." 

A  deduction  of  the  amount  of  the  Federal  Inheritance  Tax 
was  made,  and  the  court  in  disallowing  the  deduction  say, 
page  447:  "The  Federal  tax  is  of  exactly  the  same  nature  as  the 
state  tax;  a  tax  not  on  property,  but  on  succession;  that  is  to 
say,  a  tax  on  the  legatee  for  the  privilege  of  succeeding  to  prop- 
erty. (Knowlton  v.  Moore,  178  U.  S.  41.)  *  *  *  Therefore, 
though  the  administrator  or  executor  is  required  to  pay  the  tax, 
he  pays  it  out  of  the  legacy  for  the  legatee,  not  on  account  of  the 
estate.  *  *  *  No  one  questions  that  where  a  legacy  is  given 
for  a  specified  amount  the  tax  must  be  deducted  from  the 
amount  of  the  legacy  and  the  balance  only  given  to  the  legatee. 
A  testator  may  direct  that  the  tax  on  a  particular  legacy  shall 
be  paid  out  of  his  estate;  nevertheless,  in  reality,  the  tax  is 
still  paid  out  of  the  legacy,  the  effect  of  the  direction  of  the 
testator  being  merely  to  increase  the  legacy  by  the  amount 
of  the  tax.  *  *  *  (Page  448).  The  full  amount  of  the 
legacy  is  in  law  paid  to  the  legatee  and  the  deduction  made 
from  it  and  paid  to  the  state  or  Federal  government  is  paid  on 
account  of  the  legatee  from  the  legacy  which  he  receives."  1 

Vide  §  226.  Matter  of  Willets,  119  App.  Div.  119-124,  affirmed,  without 
opinion,  190  N.  Y.  527;  Matter  of  Maresi,  74  App.  Div.  76-80;  Matter  of 
Dimon,  82  App.  Div.  107-109;  Matter  of  Townsend,  153  App.  Div.  85- 
87,  appeal  pending;  Matter  of  Liss,  39  Misc.  123-124;  Matter  of  Thomas, 
39  Misc.  223-225;  Jackson  v.  Tailer,  41  Misc.  36-38,  affirmed,  on  opinion 
below,  96  App.  Div.  625,  which  was  affirmed,  without  opinion,  184  N.  Y. 
603;  Matter  of  Sanford,  66  Misc.  395-398;  Matter  of  Smith,  80  Misc.  140- 
143;  Matter  of  Shields,  68  Misc.  264-267. 

As  to  payment  of  tax  vide  Matter  of  Meyer,  209  N.  Y.  386. 

1  Deduction  for  inheritance  tax  imposed  by  foreign  state  not  allowed. 
Matter  of  Kennedy,  20  Misc.  531;  Matter  of  Penfold,  142  N.  Y.  Supp.  678- 
679. 


17 


258  THE   COURT   OF   APPEALS   DECISIONS 

1902. 

MATTER  OF  JOHN  A.  MANNING,  169  N.  Y.  449. 

The  son  of  the  testator  was  wholly  insolvent,  and  although  the 
legacy  to  him  was  more  than  sufficient  to  pay  the  debt,  the 
amount  of  the  debt  was  deducted  from  the  assets  of  the  estate 
as  being  of  no  value.  The  court  say,  page  451:  "The  question 
is  whether  this  worthless  account  is  to  be  deemed  to  be  property 
transferred  or  disposed  of  by  the  will,  within  the  contemplation 
of  the  stajbute,  and  to  be  included  in  the  value  of  the  estate  for 
the  purpose  of  taxation.  The  tax  is  imposed  upon  the  shares  of 
the  estate  that  the  beneficiaries  take  under  the  will,  and  the 
account  or  item  in  question  does  not  represent  any  property  that 
passed  from  the  deceased  to  anyone,  within  the  fair  meaning  of 
the  statute,  and,  hence,  the  final  order  of  the  surrogate  excluding 
the  account  from  the  estimated  value  of  the  estate  was  correct.1 

"It  is  said,  however,  that  if  this  item  is  not  included  in  the 
value  of  the  estate  for  the  purpose  of  imposing  the  transfer  tax 
it  should  not  have  been  included  in  the  inventory  for  the  purpose 
of  fixing  the  executor's  commissions,  as  it  was.  It  is  quite  prob- 
able that  this  contention  is  correct,  but  the  question  is  not  in- 
volved in  this  appeal.  If  the  item  had  been  excluded  from  the 
inventory  when  the  commissions  of  the  executor  were  fixed  and 
allowed  by  the  surrogate,  it  would  increase  the  tax  payable  to 
the  state  to  the  extent  of  about  eight  dollars.  There  was  no 
question  raised  or  objection  made  by  anyone  at  any  stage  of  the 
proceedings  in  regard  to  the  amount  of  the  commissions  of  the 
executor.  It  has  been  assumed  at  every  stage  of  the  controversy 
that  the  deductions  made  by  the  surrogate  for  the  expenses  of 
administration  were  correct,  and  the  only  question  litigated  was 
in  regard  to  the  account  as  an  item  of  property,  to  be  estimated 
as  part  of  the  estate  upon  which  the  statute  imposes  the  tax. 
The  position  thus  assumed  cannot  be  changed  upon  the  appeal 
in  this  court.  It  cannot  be  contended  for  the  first  time  in  this 
court  that  there  was  some  trifling  mistake  made  by  the  surrogate 
in  computing  the  expenses  of  administration. 

"Moreover,  the  statute  which  permits  an  appeal  from  the  or- 
der of  the  surrogate  required  the  appellant  to  state  in  the  notice 
of  appeal  'the  ground  upon  which  the  appeal  is  taken.'2  (Laws 
of  1892,  chap.  399,  section  13.)  The  only  grounds  stated  in  the 
notice  of  appeal  is  the  order  of  the  surrogate  in  regard  to  the 
valuation  of  the  item  or  account  referred  to.  This  appeal  was 


170  N.  Y.  423  259 

brought  by  the  executor,  and  the  public  authorities  acquiesced 
in  everything  decided  by  that  order.  If  the  surrogate  had  com- 
mitted an  error  in  adjusting  the  commissions  of  the  executor  at 
too  large  a  sum,  they,  also,  could  have  appealed  from  his  de- 
cision and  required  him  to  modify  it  in  that  respect.  The  pur- 
pose of  requiring  the  notice  of  appeal  to  the  surrogate  to  state 
the  grounds  the  appeal  was  made  upon  was  to  limit  the  questions 
to  be  reviewed  by  him  to  those  only  stated  in  the  notice." 

1  Morgan  v.  Warner,  45  App.  Div.  424-427,  affirmed,  on  opinion  below, 
162  N.  Y.  612;  Matter  of  Wood,  40  Misc.  155. 

2  Section  232;  Matter  of  Cook,  194  N.  Y.  400;  Matter  of  Stone,  56  Misc. 
247-248. 


1902. 

MATTER  OF  CHARLES  W.  CORNELL,  170  N.  Y.  423. 

Testator  died  a  resident  May  9, 1898,  having  within  two  years 
before  his  death  transferred  the  bulk  of  his  estate,  the  agreement 
of  transfer  providing  "Whereas,  the  said  party  of  the  second 
part  has  lately  sold  and  transferred  to  the  party  of  the  first  part 
certain  securities,  a  schedule  of  which  is  hereto  annexed,  under 
the  agreement  and  understanding  that  the  party  of  the  second 
part  should  during  his  life  have  all  or  such  part  of  the  net  income 
of  such  securities  as  he  might  wish."  There  was  no  power  of 
revocation  reserved.1 

Held,  that  the  transfer  was  taxable  as  a  gift  intended  to  take 
effect  at  death. 

The  surrogate  reduced  the  interest  on  the  unpaid  tax  from 
ten  to  six  per  cent.  The  court  say,  page  426:  "We  think  on  this 
record  the  matter  rested  in  the  discretion  of  the  surrogate  and 
that  we  are  not  justified  in  interfering  with  its  exercise." 

Vide  subdivision  4  of  §  220.  Matter  of  Hess,  1 10  App.  Div.  476-481-483, 
affirmed  on  opinion  of  Spring,  J.,  below,  in  187  N.  Y.554;  Matter  of  Keeney, 
194  N.  Y.  281-285,  sustained  in  222  U.  S.  525,  sub  nom.  Keeney  v.  New 
York;  Matter  of  Bullard,  76  App.  Div.  207-209;  Matter  of  Skinner,  46 
Misc.  559-563,  modified  as  to  other  points,  106  App.  Div.  217;  Matter  of 
John  Palmer,  117  App.  Div.  360-367;  Matter  of  Dobson,  73  Misc.  170; 
Matter  of  Loewi,  75  id.  57-62;  Matter  of  Spring,  75  id.  586;  Matter  of 
Barbey,  114N.  Y.  Supp.  725;  Matter  of  Heiser,  N.  Y.  Law  Journal,  July  19, 
1913,  opinion  quoted,  page  804. 

1  As  to  power  of  revocation  vide  Matter  of  Brandreth,  169  N.  Y.  437-442, 
supra,  page  254. 

2  Matter  of  Read,  204  N.  Y.  672;  §  223. 


260  THE    COURT   OF   APPEALS   DECISIONS 

1902. 

MATTER  OF  NATHAN  F.  GRAVES,  171  N.  Y.  40. 

The  testator  died  on  July  21,  1896,  and  chapter  twenty-four 
of  the  General  Laws,  in  relation  to  taxation  (chapter  908  of  the 
Laws  of  1896),  which  includes  in  article  ten  the  provisions  as  to 
taxable  transfers,  took  effect  June  15,  1896.  Section  220  pro- 
vided: "A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer 
of  any  property,  real  or  personal,  of  the  value  of  Five  hundred 
dollars  or  over,  or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons  or  corporations  not  exempt  by 
law  from  taxation  on  real  or  personal  property,  in  the  following 
cases." 

In  §  4,  subdivision  7,  it  is  provided  that  there  shall  be  ex- 
empted from  taxation  "the  real  property  of  a  corporation  or 
association  organized  exclusively  for  the  moral  or  mental  im- 
provement of  men  or  women,  or  for  religious,  bible,  tract, 
charitable,  benevolent,  missionary,  hospital,  infirmary,  educa- 
tional, scientific,  literary,  library,  patriotic,  historical  or  ceme- 
tery purposes,  or  for  the  enforcement  of  laws  relating  to  children 
or  animals  or  for  two  or  more  of  such  purposes,  and  used  ex- 
clusively for  carrying  out  thereupon  one  or  more  of  such  purposes 
and  the  personal  property  of  any  such  corporation  or  association 
shall  be  exempt  from  taxation." 

The  language  of  the  testator  in  the  tenth  subdivision  of  his 
will,  was  as  follows:  "  I  give,  bequeath  and  devise  all  the  rest  and 
residue  of  my  property  of  every  kind,  personal  or  real,  wherever 
situate,  to  my  trustees  hereinafter  named,  for  the  purpose  of 
founding,  erecting  and  maintaining  the  Graves  Home  for  the 
Aged,  to  be  located  hi  the  city  of  Syracuse  in  the  State  of  New 
York." 

The  court  say,  page  47: "  It  is  quite  possible  that  the  trustees, 
upon  whom  devolved  the  duty  of  founding,  erecting  and  main- 
taining this  home,  may  find  it  more  convenient  to  incorporate 
it  as  a  charitable  corporation,  but  under  the  law  of  1893  and  the 
provisions  of  the  will  quoted,  it  is  not  essential  that  this  should 
be  done.  The  imposition  of  the  transfer  tax  upon  the  residuary 
estate  cannot  be  sustained." 

The  court  also  say,  page  46:  "  In  a  recent  statute  (chapter  382 
of  the  Laws  of  1900)  the  Tax  Law  was  amended  so  as  to  make 
the  general  exemptions  provided  for  in  section  four  inapplicable 
to  article  ten  relating  to  taxable  transfers."  The  court  held  that 


171  N.  Y.  48  261 

the  amendment  was  not  retroactive.    The  amendment  is  now 
§  244  of  the  present  statutes. 

Vide  §§  221  and  244.  Vide  Matter  of  Arnot,  203  N.  Y.  627;  Matter  of 
Daly,  79  Misc.  586;  Matter  of  Robinson,  80  Misc.  458—461,  appeal  pending, 
Matter  of  Neustadter,  N.  Y.  Law  Journal,  August  16,  1913,  opinion  quoted 
sub  Exemptions,  page  688;  Matter  of  McCartin,  id.,  December  5,  1913, 
opinion  quoted  sub  Charitable  Corporations,  page  608. 


1902. 

MATTER  of  WALDEN  PELL,  1st,  171  N.  Y.  48. 

The  court  say,  page  51:  "The  testator,  Walden  Pell,  1st, 
died  in  the  city  of  New  York  on  the  14th  day  of  April,  1863,  and 
by  the  terms  of  his  will  he  gave  a  life  estate  in  all  his  property 
to  his  widow,  with  remainders  over  at  her  death  hi  equal  shares 
(after  making  various  bequests  of  personal  property)  to  his 
nephews  and  nieces  and  the  issue  of  any  deceased  nephew  or 
niece,  together  with  one  equal  share  thereof  to  his  sister  Emma. 
The  life  tenant,  the  widow,  died  on  the  20th  day  of  December, 
1899,  at  which  tune  all  the  estates  in  remainder  came  into  the 
actual  possession  and  enjoyment  of  the  beneficiaries  under  the 
will  and  codicil. 

"  It  is  not  disputed  that  under  this  will  the  bequests  of  personal 
property  and  the  estates  upon  remainder  of  real  estate  vested  in 
the  beneficiaries  at  the  time  of  the  testator's  death.  Notwith- 
standing the  vesting  of  these  estates  in  the  year  1863,  it  is  con- 
tended on  behalf  of  the  comptroller  of  the  city  of  New  York  that 
they  are  subject  to  the  payment  of  the  transfer  tax,  under  an 
amendment  of  the  general  statute  providing  for  taxable  trans- 
fers (Laws  1899,  chapter  76),  being  article  10  of  an  act  in  relation 
to  taxation,  constituting  chapter  24  of  the  General  Laws  (chap- 
ter 908  of  the  Laws  of  1896,  pp.  795,  868),  which  reads  as  follows: 
'All  estates  upon  remainder  or  reversion  which  vested  prior  to 
June  30,  1885,  but  which  will  not  come  into  actual  possession  or 
enjoyment  of  the  person  or  corporation  beneficially  interested 
therein  until  after  the  passage  of  this  act  shall  be  appraised  and 
taxed  as  soon  as  the  person  or  corporation  beneficially  interested 
therein  shall  be  entitled  to  the  actual  possession  or  enjoyment 
thereof.' 

"This  amendment  of  1899  became  a  law  on  March  14th  of 
that  year,  the  life  tenant  dying  in  the  following  December.  It 
is  conceded  that  the  remainders  in  this  case  are  controlled  by  this 


262  THE    COURT   OF   APPEALS   DECISIONS 

amendment  if  it  can  be  sustained  as  a  valid  exercise  of  legislative 
power. 

"The  appellant  insists  that  this  amendment  imposing  a  suc- 
cession or  transfer  tax  upon  estates  which  vested  April  14th, 
1863,  is  retroactive  and  attempts  to  tax  estates  and  rights  which 
had  vested  long  before  its  enactment;  that  this  being  so,  it 
violates  the  constitution  of  the  United  States,  which  forbids  any 
law  impairing  the  obligations  of  contracts,  and  also  the  consti- 
tution of  the  State  of  New  York  which  prohibits  the  taking  of 
private  property  for  public  use  without  compensation. 

"The  appellant  does  not  attack  the  constitutionality  of  the 
law  simply  because  it  is  retroactive,  but  for  the  reason  that  it  is 
both  retroactive  and  effective  to  impair  vested  rights. 

"  The  language  of  this  amendment  of  1899  would  seem  to  in- 
clude all  remainders  created  by  deed  or  will  which  come  within 
the  restricted  time  limitation  therein  fixed." 

Held,  (page  60)  "that  the  amendment  of  1899,  whether  re- 
garded as  part  of  the  act  relating  to  taxable  transfers,  or  an 
attempt  on  the  part  of  the  legislature  to  exercise  its  general 
power  of  taxation,  is  unconstitutional  and  void." 

This  provision  was  expunged  from  the  statute  by  chapter  368,  Laws  of 
1905. 

Vide  Matter  of  Scrimgeour,  175  N.  Y.  507;  Matter  of  Craig,  97  App. 
Div.  289-293,  affirmed,  on  opinion  below,  in  181  N.  Y.  551;  Matter  of  Kidd, 
188  N.  Y.  274-279;  Matter  of  Ripley,  122  App.  Div.  419-423,  affirmed, 
per  curiam,  192  N.  Y.  536;  Matter  of  Chapman,  133  App.  Div.  337-338, 
appeal  dismissed,  without  opinion,  196  N.  Y.  561;  Matter  of  Delano,  176 
N.  Y.  486-495,  sustained  in  205  U.  S.  466,  sub  nom.  Chanler  v.  Kelsey; 
Matter  of  Meyer,  83  App.  Div.  381-384;  Matter  of  O'Berry,  179  N.  Y. 
285-287;  Matter  of  Hagerty,  128  App.  Div.  479-482,  affirmed,  without 
opinion,  194  N.  Y.  550;  Matter  of  Smith,  150  App.  Div.  805-808;  Matter 
of  Haight,  76  Misc.  380-382,  affirmed,  152  App.  Div.  228. 


1902. 

MATTER  OF  LUCINDA  A.  WATSON,  171  N.  Y.  266,  reverses 
70  App.  Div.  623  and  36  Misc.  504. 

Testatrix  died  a  resident  September  18,  1900.  By  her  will 
she  bequeathed  $500  to  the  Young  Men's  Christian  Association 
of  the  city  of  Rome  and  $2,000  to  the  Missionary  Society  of 
the  Methodist  Episcopal  Church. 

The  court  say,  page  258:  "Prior  to  1896,  article  10  of  the  Tax 
Law  was  a  separate  statute  known  as  the  Transfer  Tax  Law. 
In  that  year  it  was  incorporated  into  the  Tax  Law  together  with 


171  N.  Y.  256  263 

other  statutes  relating  to  taxation,  the  legislative  intent  being 
to  codify  all  the  statutes  relating  to  that  subject  into  one 
consolidated  act.  After  such  consolidation,  section  4  of  the 
Tax  Law  provided  that  the  real  and  personal  property  of  a 
'corporation  or  association  organized  exclusively  for  the  moral 
or  mental  improvement  of  men  or  women,  or  for  religious,  bible, 
tract,  charitable,  benevolent,  missionary,  hospital,  infirmary, 
educational,  scientific,  literary,  library  *  *  *  purposes ' 
should  be  exempt  from  taxation.  As  the  statutes  then  stood, 
it  is  conceded  that  the  legacies  to  these  two  corporations  would 
have  been  exempt. 

"In  1900,  by  chapter  382  of  the  laws  of  that  year,  the  Tax 
Law  was  amended  by  adding  section  243  to  article  10  thereof. 
That  section  reads:  'The  exemptions  enumerated  in  section  4 
of  the  Tax  Law,  of  which  this  article  is  a  part,  shall  not  be  con- 
strued as  being  applicable  in  any  manner  to  the  provisions  of 
this  act.'  This  law  went  into  effect  before  the  death  of  the 
testatrix.  This  new  section,  it  will  be  observed,  had  the  effect 
of  taking  from  these  corporations  the  benefit  of  the  exemptions 
provided  by  section  4,  and  the  legacies  to  them  are  not  subject 
to  tax  (Matter  of  Huntington,  168  N.  Y.  399),  unless  there  is 
some  other  provision  of  the  Tax  Law  by  which  they  are  ex- 
empted. *  *  * 

"  (Page  262.)  The  legislative  policy  upon  this  subject,  there- 
fore, seems  to  be  clearly  defined  and  it  is  our  plain  duty  to  obey 
the  legislative  command,  although  in  doing  so,  we  cannot  refrain 
from  expressing  our  regret  that  the  exemptions  in  our  tax  laws 
are  not  laid  upon  deeper  and  broader  foundations.  The  spirit 
of  philanthropy  and  charity  will  not  be  fostered  or  strengthened, 
nor  the  state  enriched  by  a  system  of  laws  which  permit  an 
opulent  sectarian  church  to  gather  into  its  coffers,  tax  free, 
the  legacies  of  its  donors,  while  the  great  humanitarian  and 
practical  charities  of  the  age  must  first  yield  tribute  to  the 
state  before  they  can  take  that  which  is  given  them  to  do  their 
good  works.  It  would  almost  seem  as  if  restoration  of  the 
ancient  law  of  charitable  uses  by  chapter  701,  Laws  of  1893 
(Allen  v.  Stevens,  161  N.  Y.  122),  had  been  overlooked  in  the 
subsequent  codification  of  the  statutes  relating  to  taxable  trans- 
fers, and  it  is  to  be  hoped  that  the  inequities  and  inconsistencies 
of  the  latter  may  soon  give  way  to  a  more  liberal  and  just  rule." 

Matter  of  Mergentine,  195  N.  Y.  572,  which  affirmed,  on  opinion  below, 
129  App.  Div.  367,  contains  discussion  of  amendments  to  statute  re  exemp- 


264  THE    COURT   OF   APPEALS    DECISIONS 

tions  under  §  221.  Matter  of  Moses,  138  App.  Div.  525;  Matter  of  White, 
118  App.  Div.  869-872;  Matter  of  McCormick,  206  N.  Y.  100-104;  Matter 
of  Robinson,  80  Misc.  458,  appeal  pending. 


1902. 

MATTER  OF  JAMES  F.  CORBETT,  171  N.  Y.  516,  affirms 
55  App.  Div.  124,  which  reverses  32  Misc.  120. 

The  Laws  of  1896,  chapter  908,  applied  in  this  case.  The 
total  estate  was  $11,880.69,  of  which  amount,  under  the  Statute 
of  Distributions,  a  brother  and  a  sister  were  each  entitled  to 
one-third,  while  two  nieces  were  entitled  equally  to  the  re- 
maining third.  Under  the  statute  relating  to  taxable  transfers 
a  tax  of  5%  was  imposed  upon  the  share  of  each  niece,  which 
is  not  questioned.  A  tax  of  1%  was  imposed  upon  each  of 
the  shares  of  the  brother  and  sister,  but  this  tax  is  challenged 
on  this  review  upon  the  ground  that  the  aggregate  amount  to 
which  the  brother  and  sister  are  entitled  is  less  than  the  sum  of 
$10,000. 

Held,  that  the  tax  was  properly  imposed.  The  court  say, 
page  518:  "To  give  a  concrete  illustration  of  the  working  of 
this  feature  of  the  statute  as  construed  by  this  court:  An  es- 
tate of  $15,000,  in  which  $6,000  was  given  to  a  bishop  or  re- 
ligious corporation,  which  are  specifically  exempted  from  taxa- 
tion by  the  statute,  and  $9,000  given  to  a  brother  and  sister 
would  not  be  taxable  because  the  aggregate  amount  passing 
to  persons  not  specifically  exempted  would  not  be  of  the  value 
of  $10,000;  but  if  only  $5,000  were  given  to  the  bishop  or  re- 
ligious corporation  and  $10,000  were  given  to  the  next  of  kin, 
whether  hi  different  classes  or  not,  all  would  be  taxed  at  the 
rate  provided  in  the  statute  because  the  aggregate  amount 
thus  given  is  equal  to  the  sum  of  $10,000. 

"  This  was  the  construction  given  to  the  section  hi  Matter  of 
Hoffman  (143  N.  Y.  327),  in  which  the  history  of  the  develop- 
ment of  the  subject  was  carefully  considered,  Judge  Finch  writ- 
ing, and  the  conclusions  reached  that  the  enactment  of  §  22, 
from  which  we  have  quoted,  was  undoubtedly  due  to  the  con- 
struction placed  upon  the  statute  by  this  court,  and  was  ob- 
viously intended  to  compel  the  court  to  reach  a  different  con- 
clusion in  some  respects,  notably,  so  far  as  it  had  been  held 
that  the  aggregate  amount  of  the  estate  should  not  be  considered 
in  determining  whether  a  tax  should  be  imposed,  but  instead 


171  N.  Y.  652  265 

the  specific  share  passing  to  the  individual.  In  1896  the  sec- 
tions of  the  Act  of  1892  above  referred  to  were  reenacted  as 
part  of  the  Tax  Law,  section  2  becoming  221  of  the  latter  act, 
and  section  22  becoming  section  242.  The  only  change  in 
either  is  the  substitution  of  the  word  'article*  for  'act'  in 
section  242." 

Vide  §  221a.  Matter  of  Costello,  189  N.  Y.  288;  Matter  of  Garland, 
88  App.  Div.  380;  Matter  of  McMurray,  96  App.  Div,  128-130;  Matter  of 
Fisher,  96  App.  Div.  133;  Matter  of  Mock,  49  Misc.  283,  reversed,  113 
App.  Div.  913;  Matter  of  Mason,  69  Misc.  280-285,  discussed  in  1  State 
Department  Reports,  559;  Matter  of  Jourdan,  206  N.  Y.  653;  Matter  of 
Schwarz,  209  N.  Y.  mem. 

For  discussion  of  rates  of  tax  and  exemptions  under  present  statute  vide 
page  43. 


1902. 

MATTER  OF  J.  ALBERT  MAHLSTEDT,  171  N.  Y.  652,  dis- 
missed appeals  from  67  App.  Div.  176  and  69  App.  Div. 
620. 

The  Appellate  Division,  69  App.  Div.  620,  granted  the  motion 
of  the  executors  to  amend  its  order,  67  App.  Div.  176,  so  as  to 
include  the  recital  that  "the  decree  of  the  Surrogate's  Court 
of  Westchester  County,  appealed  from,  is  reversed  on  questions 
of  fact  and  law."  The  state  comptroller  appealed  from  both 
the  order  reversing  the  Surrogate  and  the  order  amending  the 
order  by  adding  above  recital.  The  Court  of  Appeals  dis- 
missed, without  opinion,  both  appeals. 

In  this  case  decedent,  who  was  ill,  was  assured  by  his  physi- 
cian that  upon  his  recovery  it  would  be  necessary  to  take  a 
long  vacation.  He  thereupon  assigned  to  his  wife  all  the  stock, 
except  one  share,  which  he  had  in  a  corporation  of  which  he 
was  President,  and  on  same  day  made  his  will.  He  died  on 
April  20,  1899,  three  weeks  after  making  said  assignment.  The 
surrogate  decided  that  the  gift  was  one  made  in  contemplation 
of  death  and  taxable.  By  a  divided  court  the  Appellate  Divi- 
sion reversed  the  surrogate,  Justice  Jenks  dissenting  with  an 
opinion. 

Vide  Matter  of  Thome,  162  N.  Y.  238;  Matter  of  Brandreth,  169  N.  Y. 
437-440;  Matter  of  Price,  62  Misc.  149-151;  Matter  of  Baker,  178  N.  Y. 
575;  Matter  of  Ahrens,  N.  Y.  Law  Journal,  May  14,  1913,  opinion  quoted 
eub  Contemplation  of  Death,  page  648. 


THE    COURT   OF   APPEALS   DECISIONS 


1902. 

MATTER  OF  MARY  N.  PETTIT,  171  N.  Y.  654,  affirms,  on 
opinion  below,  65  App.  Div.  30. 

Testatrix  died  a  resident  of  New  Jersey  on  March  19,  1892. 
She  died  seized  of  no  real  property  in  the  State  of  New  York, 
but  left  personal  property  valued  at  nearly  $1,000,000  in  this 
state.  Her  will  was  admitted  to  probate  in  New  Jersey,  and 
no  ancillary  executors  or  administrators  were  ever  appointed 
in  the  State  of  New  York.  Prior  to  May  1,  1892,  $6,000  of 
coupons  were  removed  from  the  state,  and  some  of  the  remain- 
ing personal  property  was  removed  during  June  and  July,  1892, 
and  the  remainder  in  October,  1896. 

The  court  say,  page  32:  "The  question  which  is  presented 
upon  this  appeal  is  whether  the  fact  that  assets  of  this  estate 
were  not  removed  to  New  Jersey  until  after  May  1,  1892,  ren- 
dered them  liable  to  taxation  under  the  Inheritance  Tax  Law 
(Laws  of  1892,  chapter  399)  which  became  operative  on  that 
date.  It  had  been  held  in  the  Matter  of  Embury  (154  N.  Y. 
746),  which  affirmed  a  decision  of  the  Appellate  Division  of  the 
Supreme  Court  upon  the  opinion  below  (19  App.  Div.  214)  that 
where  the  property  had  been  removed  from  the  State  prior  tq 
the  passage  of  the  act  of  1892,  the  surrogate  was  without  juris- 
diction to  impose  a  tax  upon  the  bank  stock  and  deposits  in 
bank  in  New  York  city  belonging  to  the  estate  of  a  non-resident 
decedent  which  the  executors  of  his  estate  had  removed  from  the 
State  of  New  York  in  1887,  and  had  distributed.  It  is  undoubt- 
edly true  that  the  court  in  its  opinion  stated  that  if  the  property 
was  still  hi  this  State  a  different  question  would  be  presented. 
But  it  is  difficult  to  conceive  how  the  fact  of  non-removal  by 
the  executors  of  a  non-resident  decedent  of  property  belong- 
ing to  the  decedent  from  this  State,  could  make  such  property 
the  subject  of  an  inheritance  tax  which  was  imposed  long  after 
the  transfer  of  the  property  had  occurred.  It  is  sought  to  main- 
tain the  right  by  subsequent  legislation  to  tax  the  property 
of  non-resident  decedents  remaining  within  the  State  upon  the 
ground  that  it  is  not  a  tax  upon  the  transfer  of  the  property 
as  is  the  inheritance  tax  hi  relation  to  the  property  of  a  resident 
decedent,  but  that  the  imposition  of  the  tax  is  based  upon  its 
dominion  over  the  property  situated  within  its  territory.  If 
this  rule  can  obtain  in  respect  to  persons  who  have  died  prior 
to  the  passage  of  the  act,  then  there  is  no  limit  to  the  power  of 


171  N.  Y.  682  267 

the  Legislature  to  enact  a  retroactive  inheritance  tax  upon  the 
property  which  may  have  belonged  to  a  non-resident  who 
has  died  and  which  has  remained  hi  the  State,  no  matter  how 
long  anterior  to  the  passage  of  the  act  such  decease  may  have 
taken  place.  It  is  evident  that  no  such  retroactive  legislation 
can  be  upheld  or  was  intended.  If  the  right  of  taxation  because 
of  decease  does  not  exist  at  the  time  of  death,  it  never  can  be 
thereafter  imposed  upon  the  ground  of  such  death.  If  that 
would  not  be  retroactive  legislation,  then  it  would  be  hard  to 
define  that  term." 
Held,  that  the  surrogate  was  without  jurisdiction. 

Vide  §  228.  The  jurisdictional  defect  re  non-resident  estates  was  remedied 
by  chapter  399,  Laws  of  1892,  in  effect  May  1,  1892.  Matter  of  Fitch,  160 
N.  Y.  87;  Beers  v.  Glynn,  211  U.  S.  477,  sustaining  Matter  of  Lord,  186 
N.  Y.  549. 

As  to  present  law  in  non-resident  estates  vide  supra,  page  133. 


1902. 

MATTER  OF  TIMOTHY  B.  BLACKSTONE,  171  N.  Y.  682, 
affirms  69  App.  Div.  127,  on  the  ground  that  this  case  is 
controlled  by  Matter  of  Houdayer,  150  N.  Y.  37;  sus- 
tained in  188  U.  S.  189,  sub  nom.  Blackstone  v.  Miller. 

Testator  died  a  resident  of  Illinois,  May  26,  1900.  At  the 
time  of  his  death  he  had  money  on  deposit  with  a  New  York 
trust  company  and  also  with  private  bankers  in  New  York. 
Held,  taxable. 

Neither  money  nor  deposits  in  banks  of  a  non-resident  decedent  are 
taxable  if  transferred  since  the  amendment  by  Laws  of  1911,  chapter  732, 
in  effect  July  21,  1911. 

Vide  subdivisions  2  and  4  of  §§  220  and  243.  Matter  of  Clinch,  180 
N.  Y.  300;  Matter  of  Gordon,  186  N.  Y.  471;  Matter  of  Fearing,  138  App. 
Div.  881-884,  affirmed,  with  opinion,  200  N.  Y.  340;  Matter  of  Tiffany, 
143  App.  Div.  327-330,  affirmed,  on  opinion  of  McLaughlin,  J.,  below, 
202  N.  Y.  550;  Matter  of  Gibbes,  84  App.  Div.  510-513,  affirmed,  without 
opinion,  176  N.  Y.  565;  Matter  of  Daly,  100  App.  Div.  373-376,  affirmed, 
without  opinion,  182  N.  Y.  524;  Matter  of  Probst,  40  Misc.  431;  Matter 
of  Gibbs,  60  Misc.  645-646;  Matter  of  Penfold,  142  N.  Y.  Supp.  678-680; 
Matter  of  Page,  N.  Y.  Law  Journal,  April  13,  1912,  opinion  quoted  sub 
Chose  in  Action. 


268  THE   COURT   OF   APPEALS   DECISIONS 

1902. 

MATTER  OF  ELLEN  E.  GLENDINNING,  171  N.  Y.  684, 
affirms,  without  opinion,  68  App.  Div.  125. 

The  testator  was  a  non-resident.  The  court  say,  page  125: 
"The  single  question  to  be  determined  upon  this  appeal  is 
whether  a  seat  or  membership  in  the  New  York  Stock  Exchange 
of  a  non-resident  of  this  state  is  taxable  under  the  law  in  rela- 
tion to  taxable  transfers."  Held,  that  it  was  subject  to  transfer 
tax. 

Vide  subdivision  2  of  §  220  and  §  243.  Matter  of  Hellman,  174  N.  Y. 
254-256;  Matter  of  Dusenbery,  2  State  Department  Reports,  501. 

As  to  transfers  in  non-resident  estates  since  1911  amendment  vide  supra, 
page  133. 


1902. 

MATTER  OF  CORNELIUS  VANDERBILT,  172  N.  Y.  69. 

Testator  died  a  resident  September  12,  1899.  The  court, 
divided  four  to  three,  Justice  Haight  saying  (page  71)  in  the 
prevailing  opinion:  "Prior  to  an  amendment  of  1899  the  Trans- 
fer Tax  Law  (L.  1896,  ch.  908,  section  230,  as  amended  L.  1897, 
ch.  284),  provided  that  'Estates  in  expectancy  which  are  con- 
tingent or  defeasible  shall  be  appraised  at  their  full,  undimin- 
ished  value  when  the  persons  entitled  thereto  shall  come  into  the 
beneficial  enjoyment  or  possession  thereof.  *  *  * '  Under 
this  statute  it  has  repeatedly  been  held  that  future  contingent 
estates  were  not  taxable  until  they  vested  in  possession  and  the 
beneficial  owner  could  be  ascertained.  The  question  now  pre- 
sented is  as  to  whether  this  statute  has  been  changed.  The  leg- 
islature, by  chapter  76  of  the  Laws  of  1899,  amended  section  230 
of  the  Tax  Laws,  known  as  chapter  908  of  the  Laws  of  1896, 
by  which  the  provision  of  the  statute  quoted  is  omitted  and  in 
place  thereof  we  have  the  following:  'Whenever  a  transfer  of 
property  is  made,  upon  which  there  is,  or  in  any  contingency 
there  may  be,  a  tax  imposed,  such  property  shall  be  appraised 
at  its  clear  market  value  immediately  upon  such  transfer,  or  as 
soon  thereafter  as  practicable/  Then  follow  provisions  particu- 
larly specifying  the  manner  in  which  the  value  of  future  or  lim- 
ited estates  shall  be  determined.  Then  it  is  provided  that 
'When  property  is  transferred  in  trust  or  otherwise,  and  the 
rights,  interests  or  estates  of  the  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in 


172  N.  Y.  69  269 

part  created,  defeated,  extended  or  abridged,  a  tax  shall  be  im- 
posed upon  said  transfer  at  the  highest  rate  which,  on  the  hap- 
pening of  any  of  the  said  contingencies  or  conditions,  would  be 
possible  under  the  provisions  of  this  article,  and  such  tax  so  im- 
posed shall  be  due  and  payable  forthwith,  out  of  the  property 
transferred.' 

"  It  seems  to  me  clear  that  the  legislature  by  this  amendment 
intended  to  change  the  law  upon  the  subject  and  to  make  the 
transfer  tax  upon  property  transferred  in  trust  payable  forth- 
with. The  tax  is  not  required  to  be  paid  by  the  conditional 
transferee,  for,  by  the  provisions  of  the  statute,  it  is  to  be  paid 
'out  of  the  property  transferred.'  So  that  whoever  may  ulti- 
mately take  the  property  takes  that  which  remains  after  the 
payment  of  the  tax.  This  amendment  makes  provision  for  prop- 
erty transferred  in  trust.  It,  therefore,  contemplates  defeasi- 
ble transfers  as  well  as  absolute  transfers. 

"By  the  seventeenth  clause  of  the  will  of  the  testator  the 
residue  and  remainder  of  his  estate  was  given  in  trust  to  his 
executors  for  the  benefit  of  his  son  Alfred  G.  Vanderbilt,  which 
trust  is  to  continue  until  he  becomes  thirty  years  of  age,  at  which 
time  one-half  of  the  trust  estate  is  to  be  turned  over  to  him,  and 
as  to  the  balance,  the  trust  is  to  continue  until  he  becomes 
thirty-five,  when  the  remainder  is  to  become  his  absolutely. 
The  will  also  contains  a  provision  that  in  case  he  dies  before 
becoming  thirty  or  thirty-five  the  estate  shall  be  given  to  other 
persons.  The  only  contingency,  therefore,  that  can  happen  to 
defeat  his  taking  the  estate  in  possession  is  his  death  before  the 
period  fixed  for  the  transfer  of  the  possession  of  the  property  to 
him.  The  estate  created,  therefore,  is  an  estate  hi  trust  for  the 
periods  mentioned,  with  a  remainder  vested  in  Alfred  G.,  subject 
to  be  defeated  by  his  death  before  arriving  at  the  age  of  thirty 
or  thirty-five.  (Matter  of  Seaman,  147  N.  Y.  72;  Campbell  v. 
Stokes,  142  N.  Y.  23;  Manice  v.  Manice,  43  N.  Y.  370;  Warner 
v.  Durant,  76  N.  Y.  133;  2  Washburn  on  Real  Property,  629.) 

"  Under  the  view  taken  by  me  of  this  statute,  the  transfer  tax 
still  remains  a  tax  upon  succession.  Each  trust  estate  created 
is  to  be  separately  appraised  and  the  tax  determined  according 
to  the  percentage  fixed  by  the  statute  for  those  who  are  con- 
tingently entitled  to  the  estate;  and  when  fixed,  the  tax  is  forth- 
with payable  out  of  the  trust  estate." 

Vide  sixth  paragraph  of  §§  230  and  241,  and  footnote,  post,  page  273,  to 
Matter  of  Brez,  172  N.  Y.  609.  Vide  §  222,  and  for  exceptions  to  rule  that 


270  THE   COURT   OF   APPEALS   DECISIONS 

transfers  presently  taxable,  vide  Matter  of  Zefita,  167  N.  Y.  280;  Matter  of 
Howe,  86  App.  Div.  286-290,  affirmed,  on  opinion  below,  176  N.  Y.  570; 
Matter  of  Babcock,  81  App.  Div.  645,  affirming  37  Misc.  445;  Matter  of 
Granfield,  79  Misc.  374;  and  Matter  of  Burgess,  204  N.  Y.  265-269;  Matter 
of  Cans,  N.  Y.  Law  Journal,  April  13,  1912,  opinion  quoted  post,  page  862. 
Vide  etiam  Matter  of  Guggenheim,  189  N.  Y.  561;  Matter  of  Keeney, 
194  N.  Y.  281-285;  Matter  of  Huber,  86  App.  Div.  458-461;  Matter  of 
Tuacy,  179  N.  Y.  501-509;  Matter  of  Kennedy,  93  App.  Div.  27;  Matter 
of  Smith,  150  App.  Div.  805-810;  Matter  of  Title  Guarantee  &  Trust  Co., 
81  Misc.  106-112;  Matter  of  Ames,  141  N.  Y.  Supp.  793-796;  Matter  of 
Dwight,  N.  Y.  Law  Journal,  October  8,  1911,  affirmed,  without  opinion, 
149  App.  Div.  912,  opinion  quoted  sub  Trust  Deed,  page  872;  Matter  of 
Bass,  57  Misc.  531-533. 


1902. 

MATTER  OF  GEORGE  JONES,  172  N.  Y.  676,  reverses 
69  App.  Div.  237,  and  affirms  28  Misc.  356. 

Testator  died  August  12,  1891.  He  owned  forty-six  of  the 
one  hundred  shares  of  the  stock  of  "The  New  York  Times,"  a 
joint-stock  association.  The  comptroller  claimed  that  these 
shares  were  personal  property  and  taxable  as  shares  of  stock 
in  an  ordinary  corporation;  the  executors  contended  that  as 
the  joint-stock  association  owned  real  estate,  that  the  interest 
therein  of  the  shareholder  was  realty  also,  and  as  it  passed 
under  his  will  hi  the  direct  line  was  exempt,  the  statute  at  that 
time  taxing  transfers  of  realty  only  when  passing  to  collaterals 
or  strangers.1  A  question  also  arose  as  to  whether  the  value  of 
the  good  will  in  this  association  in  the  "Times"  newspaper  was 
property  which  passed  under  the  will  of  testator  and  was  tax- 
able.2 

Held,  that  the  shares  were  personal  property,  and  that  the 
good  will  of  the  newspaper  was  properly  included  as  part  of  the 
assets  of  the  association. 

The  widow,  who  was  a  life  tenant,  died  intermediate  the 
death  of  the  decedent  and  the  transfer  tax  appraisal.  The  ap- 
praiser calculated  the  value  of  the  widow's  interest,  as  measured 
by  the  term  of  its  actual  duration.3  Held,  (28  Misc.  356-357) 
that  this  was  not  correct  and  that  its  value  should  be  determined 
by  the  superintendent  of  insurance  in  accordance  with  the  pro- 
visions of  that  portion  of  act  of  1887  relating  to  We  estates. 

Transfers  of  realty,  when  passing  in  the  direct  line,  were  first  taxed  by 
Laws  of  1903,  chapter  41,  in  effect  March  16,  1903;  vide  §  220. 

Vide  Matter  of  Wilmer,  153  App.  Div.  804,  as  to  joint-stock  associations 
in  estate  of  non-resident  prior  to  1911  amendment. 


172  N.   Y.   609  271 

1  Matter  of  Tiffany,  143  App.  Div.  327-328,  affirmed,  on  opinion  of  Mc- 
Laughlin,  J.,  below,  202  N.  Y.  550,  appeal  pending  in  United  States  Su- 
preme Court. 

2  As  to  valuation  of  inactive  stock  vide  cases  quoted  sub  Closely  Held 
Stock. 

3  As  to  valuation  of  life  estates  vide  Matter  of  White,  208  N.  Y.  64;  Mat- 
ter of  Hall,  36  Misc.  618-619. 

As  to  good  will  vide  Matter  of  R.  G.  Dun,  40  Misc.  509-510;  Matter  of 
Keahon,  60  Misc.  508,  and  cases  cited  sub  Good  Will. 


1902. 

MATTER  OF  JOSEPHINE  L.  NEWCOMB,  172  N.  Y.  608, 
affirms,  on  opinion  below,  71  App.  Div.  606. 

Testatrix  died  a  resident  of  Louisiana,  April  8,  1901.  She 
owned  stock  in  a  New  York  corporation,  the  certificate  of  stock, 
however,  was  in  name  of  another  and  had  passed  to  her  by  an 
endorsement  in  blank  on  the  back  of  the  certificate.  Held, 
taxable. 

Vide  subdivision  2  of  §§  220  and  243.  Stock  held  by  a  non-resident  de- 
cedent not  taxable  if  transferred  since  the  amendment  by  Laws  of  1911, 
chapter  732,  in  effect  July  21,  1911. 


1902. 

MATTER  OF  JOHN  D.  BREZ,  172  N.  Y.  609. 

Testator  died  November  18,  1899.  The  court  say,  page  610: 
"We  are  of  opinion  that  all  the  questions  presented  on  this  ap- 
peal, including  both  the  construction  and  the  constitutionality 
of  the  statute  of  1899  (chapter  76)  providing  for  the  present 
appraisal  and  taxation  of  remainders  created  by  will  upon  con- 
tingencies or  where  the  ultimate  beneficiaries  cannot  be  immedi- 
ately ascertained,  are  disposed  of  by  our  recent  decision  hi  Mat- 
ter of  Vanderbilt  (172  N.  Y.  69),  and  the  order  appealed  from 
must,  therefore,  be  reversed  on  the  authority  of  that  case. 

"We  feel,  however,  justified  in  calling  the  attention  of  the 
legislature  to  an  inequality  caused  by  the  statute,  which  may 
have  escaped  its  notice  and  which  we  submit  to  its  wisdom 
whether  it  would  not  be  proper  to  remedy.1  In  all  the  cases 
covered  by  this  statute  there  must  be  one  or  more  intermediate 
estates,  generally  life  estates,  during  the  period  elapsing  between 
the  death  of  the  testator  and  the  happening  of  the  contingency 


272  THE    COURT   OF   APPEALS   DECISIONS 

(commonly  the  death  of  the  life  tenant)  on  which  the  remainders 
become  vested  absolutely  and  the  remaindermen  become  certain. 
The  tax  on  the  remainders  being  paid  out  of  the  corpus  of  the 
estate  diminishes  the  income  of  the  life  tenant  by  the  interest  on 
the  amount  of  the  tax.  The  constitutionality  of  this  provision, 
though  it  affects  the  life  tenant,  we  have  upheld  because  the  rate 
or  amount  of  tax  on  the  succession  of  the  life  tenant  is  within  the 
discretion  of  the  legislature  to  prescribe,  and  the  scheme  in  effect 
is  simply  the  imposition  of  an  additional  tax  on  the  life  tenant. 
It  is  evident,  however,  that  the  legislature  has  determined  that 
in  many  instances  the  tax  may  be  excessive;  for  while  it  directs 
that  the  tax  shall  be  imposed  at  the  highest  rate  for  any  possible 
succession  that  may  occur  in  any  contingency,  it  provides  that  if 
it  eventually  transpires  that  the  succession  which  actually  hap- 
pens is  subject  to  a  lower  rate,  the  excess  of  tax,  with  interest, 
shall  be  repaid  by  the  state. 

"  The  interest  on  this  excess  ought  fairly  to  go  to  the  life  ten- 
ant, though  the  statute  is  silent  on  the  subject.  But  even  if 
given  to  the  life  tenant  it  can  be  repaid  to  his  estate  only  after 
his  death,  for  it  is  commonly  his  death  that  finally  settles  the  rate 
of  tax.  This  is  hardly  an  equivalent  for  the  diminution  of  his  in- 
come during  life,  an  income  oftentimes  necessary  for  his  sup- 
port. It  seems  to  us  that,  bearing  in  mind  the  general  character 
of  the  tax  and  that  the  legislature  has  deemed  it  right  to  pre- 
scribe different  rates  of  taxation  depending  on  the  relation  of  the 
legatee  or  devisee  to  the  deceased,  if  it  is  desired  to  make  taxes 
on  remainders  payable  immediately,  it  would  be  fairer  to  the  life 
tenant  to  have  the  tax  assessed  at  the  lowest  rate  of  any  suc- 
cession provided  for  by  the  will,  and  in  case  the  remainder  even- 
tually vesting  should  prove  taxable  at  a  higher  rate,  then  such 
increased  tax  should  be  payable  at  the  time  of  its  enjoyment. 

"Nor  would  this  change  be  detrimental  to  the  state.  Our 
experience  informs  us  that  in  the  majority  of  cases  the  remain- 
ders are  first  appointed  to  the  issue  of  the  life  tenant  and  de- 
scendants of  the  testator  and  are  given  to  collaterals  or  strangers 
only  in  default  of  issue.  The  lowest  rate  of  tax  thus  usually 
proves  the  final  rate.  Where  the  state  imposes  in  the  first  in- 
stance a  higher  rate  of  tax  it  becomes  obligated  to  repay  the  ex- 
cess after  a  lifetime  with  six  per  cent  interest,  while  it  could  bor- 
row the  money  at  half  that  rate." 

Vide  dissenting  opinion,  page  612;  etiam  dicta  in  Matter  of  Hoffman, 
143  N.  Y.  327-334;  Matter  of  Guggenheim,  189  N.  Y.  561;  Matter  of 


172  N.  Y.  616  273 

Huber,  86  App.  Div.  458-461;  Matter  of  Howe,  86  App.  Div.  286-290, 
affirmed,  on  opinion  below,  176  N.  Y.  570;  Matter  of  Smith,  150  App. 
Div.  805-810. 

1  Not  until  1911  did  the  legislature  in  any  way  attempt  to  remedy  the 
"inequality  caused  by  the  statute."  By  chapter  800,  Laws  of  1911,  in 
effect  July  28,  1911,  it  added  to  §  241  what  now  form  the  last  two  para- 
graphs of  said  section.  By  the  same  act  is  amended  the  sixth  paragraph  of 
§  230  by  providing  that  a  temporary  order  shall  be  entered.  Vide  the  three 
opinions  of  the  state  comptroller,  dated  respectively  February  10, 11  and  14, 
1913,  published  in  1  State  Department  Reports,  566-569,  opinions  quoted 
post,  page  827,  page  828  and  page  725;  and  opinion  of  state  comptroller, 
dated  June  5, 1913,  3  State  Department  Reports,  450,  opinion  quoted  post, 
page  824. 

As  to  when  temporary  order  should  not  be  entered  vide  opinion  of  state 
comptroller,  dated  May  19,  1913,  2  State  Department  Reports,  503, 
opinion  quoted  post,  page  825. 


1902. 

MATTER  OF  HENRY  W.  KING,  172  N.  Y.  616,  affirms,  on 
.  opinion  below,  71  App.  Div.  581,  which  reversed  30  Misc. 
575. 

Testator  died  a  resident  of  Illinois  April  12,  1899,  and  was  a 
member  of  a  clothing  firm  doing  business  in  both  New  York 
and  Chicago.  The  New  York  branch  was  mainly  occupied  in 
manufacturing  and  thereby  incurred  large  debts;  the  Chicago 
branch  mainly  sold  and  distributed  the  manufactured  products 
and  thereby  made  collections  in  excess  of  outlays.  As  a  result 
the  debts  owing  to  New  York  creditors  exceeded  the  value  of 
the  New  York  assets,  and  it  is  claimed  that  these  debts  should  be 
deducted  and  that  nothing  will  remain  subject  to  tax. 

The  court  say,  page  582:  "However  desirous  we  may  be  to 
give  a  liberal  construction  in  order  to  uphold  a  levy  under  the 
Transfer  Tax  Act  (Laws  of  1896,  chap.  908,  art.  10,  as  amd.), 
we  think  there  is  an  insuperable  objection  to  sustaining  the 
tax  fixed  in  this  proceeding.  Ordinarily  on  the  death  of  a 
member  of  a  firm  the  legal  title  to  the  assets  of  the  firm  vests 
in  the  surviving  members,  and  what  is  left  to  the  representa- 
tives of  the  deceased  partner  is  the  right  to  an  accounting. 
(Williams  v.  Whedon,  109  N.  Y.  333.)  Assuming,  however, 
but  not  deciding,  that  the  decedent  had  a  property  interest  in 
the  assets  of  the  firm  in  this  State  which  is  subject  to  taxation, 
we  find  it  impossible  to  get  away  from  the  conclusion  that  as 
against  such  property  the  right  exists  to  deduct  the  debts  due 
to  creditors  hi  this  State. 
18 


274  THE    COURT   OF   APPEALS   DECISIONS 

"In  the  present  instance,  upon  the  conceded  facts,  this  would 
leave  no  balance  subject  to  taxation.  A  tax  on  personal  property 
of  a  non-resident  is  one  which  the  State  imposes  based  upon  its 
dominion  over  the  property  situated  within  its  territory;  and 
as  such  property  is  liable  to  be  appropriated  for  the  payment  of 
debts  therein,  we  fail  to  see  upon  what  principle  the  latter  can 
be  entirely  disregarded.  Here  it  is  conceded  that  the  liabilities 
of  the  firm  in  this  State  exhaust  its  assets  in  this  State.  *  *  * 

"(Page  583.)  Our  conclusion,  therefore,  is,  that  as  the  debts 
in  this  State  exhausted  the  value  of  the  property  here,  no  tax 
could  be  imposed." 

Vide  subdivision  2  of  §§  220  and  243;  etiam  Matter  of  Porter,  67  Misc. 
19,  affirmed,  without  opinion,  148  App.  Div.  896;  Matter  of  Grosvenor, 
193  N.  Y.  652;  Matter  of  Browne,  195  N.  Y.  522;  Matter  of  Clark,  N.  Y. 
Law  Journal,  February  9,  1912,  opinion  quoted  sub  Partnership;  Matter  of 
Dusenberry,  2  State  Department  Reports,  501,  opinion  quoted,  page  119. 

As  to  pledged  securities  vide  Matter  of  Pullman,  46  App.  Div.  574; 
Matter  of  Ames,  141  N.  Y.  Supp.  793. 


1902. 

MATTER  OF  JOHN  L.  ROGERS,  172  N.  Y.  617,  affirms,  on 
opinion  below,  71  App.  Div.  461. 

Testator  died  December  2,  1869.  By  his  will  he  gave  a  life 
estate  to  his  widow,  with  power  to  dispose  of  remainder  by  her 
will.  The  widow  died  April  30,  1900,  leaving  a  will.  After 
directing  her  executors  to  pay  all  her  debts,  including  a  loan 
of  $15,000,  secured  by  her  bond,  she  appointed  all  the  residue 
of  the  fund  so  left  by  her  husband  and  over  which  she  had 
power  of  appointment,  to  her  brother,  the  appellant  Wilmer  S. 
Wood  absolutely. 

The  appraiser  taxed  the  transfer  to  widow's  brother  at  five 
per  centum  upon  the  theory  that  he  was  a  stranger  in  blood  to 
John  L.  Rogers. 

The  court  say,  page  464:  "The  Laws  of  1896,  as  amended  by 
chapter  284  of  the  Laws  of  1897,  provide:  'Whenever  any  person 
or  corporation  shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property  made  either  before  or  after 
the  passage  of  this  act,  such  appointment  when  made  shall  be 
deemed  a  transfer  taxable  under  the  provisions  of  this  act  in 
the  same  manner  as  though  the  property  to  which  such  appoint- 
ment relates  belonged  absolutely  to  the  donee  of  such  power, 


172  N.  Y.  649  275 

and  had  been  bequeathed  or  devised  by  such  donee  by  will.' 
This  provision  of  law  was  before  this  court  in  Matter  of  Seaver 
(63  App.  Div.  283),  and  it  was  there  held  that  section  220  ex- 
pressly declares  that  it  is  the  exercise  and  not  the  creation  of 
the  power  of  appointment  which  effects  the  transfer  upon  which 
the  tax  is  enforced."  l 

Held,  that  the  fund  must,  for  taxing  purposes,  be  held  to 
pass  from  sister  to  brother,  and  the  tax  was  fixed  at  one  per 
centum. 

As  to  the  direction  contained  in  the  will  of  the  donee  of  the 
power  of  appointment  to  repay  the  loan  heretofore  made  to 
her  and  for  which  she  had  given  her  bond,  out  of  the  fund  over 
which  she  exercises  such  power,  the  court  say,  page  465:  "The 
creditors  of  Virginia  B.  Rogers  are  not  obliged  to  accept  this 
provision  of  the  will  for  the  payment  of  their  debt;  but,  if  they 
do  accept  it,  we  are  unable  to  discover  any  way  by  which  they 
may  avoid  the  payment  of  the  tax  which  the  State  imposes  as  a 
condition  of  receiving  a  transfer  under  the  will  of  the  deceased. 
This  is  clearly  the  doctrine  of  Matter  of  Gould,  156  N.  Y.  423, 
and  is  not  inconsistent  with  Matter  of  Westurn,  152  N.  Y.  93."  2 

Vide  subdivision  6  of  §  220.  Matter  of  Wolfe,  89  App.  Div.  349-353, 
affirmed,  without  opinion,  179  N.  Y.  599;  Matter  of  Daniell,  40  Misc.  329- 
331. 

1  Matter  of  Walworth,  66  App.  Div.  171-175. 

*  Matter  of  Eaton,  55  Misc.  472-477. 


1902. 

MATTER  OF  FRANCES  L.  BUSHNELL,  172  N.  Y.  649, 
affirms,  without  opinion,  73  App.  Div.  325. 

Testatrix,  a  resident  of  Connecticut,  died  on  July  25,  1899, 
the  owner  of  stock  in  New  York  corporations.  The  will  pro- 
vided (page  320) :  "  (1)  I  give  to  my  mother,  Mary  A.  Bushnell, 
the  use  for  her  life  of  all  my  property,  with  power  to  reinvest 
the  same.  (2)  After  her  use  of  my  property  shall  have  ceased, 
I  leave  it  all  excepting  my  personal  effects,  to  my  niece,  Emily 
Cheney  *  *  *  to  be  hers  and  her  heirs  forever." 

The  executrices  both  resided  in  Connecticut,  and  the  certif- 
icates of  stock  were  in  the  possession  of  the  testatrix  without 
the  State  at  the  time  of  her  death.  It  was  contended  by  the 
niece  that  she  had  no  vested  interest  in  the  property,  and  may 


276  THE  COUKT  OF  APPEALS  DECISIONS 

never  have,  for  the  reason  that  the  corpus  may  be  used  or  lost 
by  the  life  tenant,  and  that  the  property  is  not  within  this  State. 

Held,  that  the  transfer  of  the  stock  in  the  New  York  corpora- 
tions was  taxable,  the  court  saying  (page  328)  that  the  niece, 
"Emily  Cheney  Learned,  took  a  vested  indefeasible  interest 
in  this  property  at  the  time  of  the  death  of  the  testatrix.  There 
has,  therefore,  been  a  transfer  to  her  within  the  contemplation 
of  the  Transfer  Tax  Law  and  the  interest  thus  transferred  was 
then  taxable.  (Matter  of  Dows,  167  N.  Y.  227.) 

"Both  the  life  tenant  and  remainderman  took  their  respec- 
tive interests  in  the  property  as  a  matter  of  sovereign  favor. 
Neither  is  the  life  tenant  in  a  position  to  complain  that  the 
principal  of  which  she  is  entitled  to  the  use  is  diminished  by 
the  tax  nor  can  the  remainderman  resist  the  imposition  of  the 
tax  upon  the  ground  that  he  may  never  come  into  possession 
of  the  property.  The  law  affords  remedies  to  protect  the  rights 
of  remaindermen.  The  theory  of  the  statute  is  that  the  tax 
is  to  be  paid  by  the  executors  out  of  the  property  transferred 
(Transfer  Tax  Law,  sections  222,  224),  and  the  statute  would 
not  be  construed  as  making  the  transferee  liable  personally 
beyond  the  amount  of  the  property  coming  into  his  hands." 

Vide  §§  222,  224  and  230.    Matter  of  Merritt,  155  App.  Div.  228-232. 

Stock  held  by  a  non-resident  decedent  is  not  taxable  if  transferred  since 
the  amendment  by  Laws  of  1911,  chapter  732,  in  effect  July  21,  1911; 
subdivision  2  of  §  220  and  §  243. 

For  present  law  in  non-resident  estates  vide  supra,  page  133. 


1903. 

MATTER  OF  THEODORE  HELLMAN,  174  N.  Y.  254. 

Testator  died  a  resident  October  9,  1901.  The  question 
presented  by  this  appeal  is  whether  a  seat  in  the  New  York 
Stock  Exchange,  of  which  the  deceased  died  the  owner,  is  sub- 
ject to  the  inheritance  or  transfer  tax  prescribed  by  article  10 
of  the  Tax  Law. 

The  court  say,  page  256:  "Prior  to  the  enactment  of  the  Tax 
Law  (chapter  908,  Laws  of  1896)  the  legislation  which  imposed 
ordinary  annual  taxes  and  that  which  exacted  a  tax  on  the 
devolution  of  property  by  will  or  intestacy  were  entirely  dis- 
tinct. The  first,  in  one  form  or  other,  had  existed  from  the 
formation  of  the  government.  The  latter  was  of  comparatively 
recent  origin.  It  was  settled  that  under  the  law  as  it  stood 


174  N.  Y.  254  277 

prior  to  the  act  of  1896  a  seat  in  the  exchange  was  subject  to 
the  inheritance  or  transfer  tax  (Matter  of  Glendinning,  68  App. 
Div.  125;  affirmed,  171  N.  Y.  684);  but  it  has  also  been  held 
that  it  could  not  be  assessed  for  annual  taxation.  (People  ex  rcl. 
Lemmony.  Feitner,  167  N.  Y.  1.) 

"The  difficulty  in  the  present  case  has  been  occasioned  by  the 
revision  of  the  law  and  the  consolidation  of  the  previous  legisla- 
tion into  a  single  statute,  the  Tax  Law  of  1896.  In  subdivision  5 
of  section  2  of  the  statute  is  given  the  definition  of  personal 
property  as  used  in  the  chapter  or  act.  It  is  a  reproduction 
of  the  provisions  of  law  then  in  force  regulating  general  taxation. 
Article  10  deals  with  'taxable  transfers'  or  inheritance  tax. 
By  section  220  of  the  statute  (the  first  section  of  the  article) 
it  is  enacted  that  a  certain  tax  shall  be  imposed  on  the  transfer 
of  any  real  or  personal  property  under  circumstances  therein 
enumerated.  The  majority  of  the  court  below  were  of  opinion 
that  the  definition  of  personal  property  already  mentioned 
controlled  the  provisions  of  this  article  and  that  as  the  defini- 
tion did  not,  under  the  decisions  of  this  court,  include  a  seat 
in  the  exchange,  the  seat  was  not  subject  to  the  transfer  tax. 

"If  the  statutory  scheme  of  taxation  were  an  original  one  and 
the  provisions  quoted  were  the  only  ones  which  referred  to 
the  subject-matter,  the  argument  of  the  learned  Appellate 
Division  would  be  cogent  and  probably  conclusive.  But  by 
a  subsequent  section  of  the  article  on  taxable  transfers  (sec- 
tion 242)  new  definitions  are  given  applicable  to  the  transfer  tax 
alone:  'The  words  'estate'  and  'property,'  as  used  in  this 
article,  *  *  *  shall  include  all  property  or  interest  therein, 
whether  situated  within  or  without  this  State.'  That  a  seat  in 
the  exchange  is  property  and  passes  to  a  receiver  or  to  an  as- 
signee hi  bankruptcy  has  been  authoritatively  determined  by 
the  decisions  of  both  this  court  and  the  Supreme  Court  of  the 
United  States.  (Powell  v.  Waldron,  89  N.  Y.  328;  Platt v.  Jones, 
96  N.  Y.  24;  Hyde  v.  Woods,  94  U.  S.  524;  Page  v.  Edmunds, 
187  U.  S.  596.)  In  the  Lemmon  case,  we  did  not  question  this 
proposition,  but  our  decision  proceeded  on  the  ground  that  the 
seat  did  not  fall  within  what  Judge  Vann  termed  'the  somewhat 
restricted  definition  of  the  tax  laws.' 

"In  determining  the  construction  to  be  given  to  the  broad  and 
comprehensive  language  of  section  242,  we  must  consider  that 
the  statute  has  a  history  plainly  indicating  the  trend  of  legisla- 
tive action  and  that  as  to  the  transfer  tax  it  is  a  literal  reproduc- 


278  THE  COURT  OF  APPEALS  DECISIONS 

tion  of  the  then  existing  law.  First  enacted  in  1885  (Chap.  483) 
the  Inheritance  Tax  Law  was  limited  to  property  passing  to 
collateral  relatives.  It  was  subjected  to  repeated  amendments, 
the  effect  of  which  in  nearly  every  instance  was  either  to  enlarge 
the  class  of  persons  subject  to  the  tax  or  to  extend  its  applica- 
tion to  some  species  of  property  which  the  courts  had  held  not 
to  fall  within  its  terms.  The  distinction  between  property  justly 
subject  to  ordinary  taxation  and  that  liable  to  the  imposition 
of  the  tranfer  tax  was  early  appreciated." 

Held,  that  a  seat  in  the  New  York  Stock  Exchange  was  sub- 
ject to  the  transfer  tax. 

Vide  §  243.  Matter  of  Daly,  100  App.  Div.  373-379,  affirmed,  without 
opinion,  182  N.  Y.  524;  Matter  of  Curtis,  31  Misc.  83;  Matter  of  R.  G. 
Dun,  40  id.  509-510. 


1903. 

MATTER  OF  WILLIAM  SCRIMGEOUR,  175  N.  Y.  507, 

affirms,  per  curiam,  80  App.  Div.  388,  which  affirms  39 

Misc.  128. 

The  decree  fixing  the  tax  was  made  pursuant  to  chapter  76  of 
the  Laws  of  1899  (amdg.  Laws  of  1896,  chap.  908,  §  230),  and 
that  chapter  was  declared  unconstitutional  hi  Matter  of  Pell 
(171  N.  Y.  48).  After  the  decision  in  Matter  of  Pell,  and  after 
the  time  to  appeal  from  the  decree  had  expired,  the  petitioners 
in  this  proceeding  applied  for  an  order  vacating  the  taxing  decree, 
adjudging  the  estate  exempt  from  transfer  tax  and  directing  the 
Comptroller  to  refund  the  moneys  paid  under  the  decree.  An 
order  was  made  granting  petitioners'  prayer  and  the  Comp- 
troller appeals. 

Held,  (page  389  of  80  App.  Div.)  that  the  language  of  the  6th 
subdivision  of  §  2481  of  the  Code  of  Civil  Procedure,  together 
with  that  of  §  229  of  the  Tax  Law  (Laws  of  1896,  chapter  908, 
as  amended  by  Laws  of  1901,  chapter  173),  is  broad  enough  to 
confer  upon  him  complete  jurisdiction  to  vacate  a  void  order  of 
his  court. 

The  court  say,  page  507:  "Both  parties  mistakenly  supposed 
that  the  estate  was,  under  the  law,  subject  to  a  transfer  tax.  The 
proposition  was  not  litigated  nor  decided  but  assumed.  We 
think  it  was  within  the  power  of  the  surrogate,  on  an  application 
to  his  discretion  and  favor,  to  open  the  case,  relieve  the  respond- 


175  N.  Y.  513  279 

ents  from  the  consequence  of  their  mistake,  and  set  aside  the 
order  which  had  been  erroneously  made." 

Vide  §§  225  and  228.  Matter  of  Backhouse,  110  App.  Div.  737-739, 
affirmed,  without  opinion,  185  N.  Y.  544;  Matter  of  O'Berry,  179  N.  Y. 
285-288;  Matter  of  Hoople,  179  N.  Y.  308;  Matter  of  Willets,  119  App. 
Div.  119-125,  affirmed,  without  opinion,  190  N.  Y.  527;  Matter  of  Town- 
send,  153  App.  Div.  85-87,  appeal  pending;  Matter  of  Weiler,  122  N.  Y. 
Supp.  608,  affirmed,  without  opinion,  139  App.  Div.  905;  Matter  of  Scott, 
208  N.  Y.  602;  and  cases  cited  sub  Vacating  Decree.  Vide  etiam  Matter  of 
Niven,  29  Misc.  550. 


1903. 

MATTER  OF  BENJAMIN  D.  SELLIMAN,  175  N.  Y.  513, 

affirms,  without  opinion,  79  App.  Div.  98,  which  reversed 

38  Misc.  226. 

The  court  say,  page  98:  "This  was  an  application  to  modify 
a  decree  of  the  Surrogate's  Court  of  Kings  county  fixing  the 
transfer  tax  upon  the  estate  of  Benjamin  D.  Silliman,  deceased. 
In  1901  the  executors  and  trustees  under  the  will  paid  to  the 
Comptroller  of  the  State  of  New  York  $51,456.71,  being  the' 
amount  of  the  transfer  tax  as  previously  assessed  under  a  decree 
and  modified  decree  of  the  Surrogate's  Court.  In  the  present 
proceeding  the  executors  and  trustees  sought  a  modification  of 
the  previous  decrees  on  two  grounds:  (1)  That  subsequently  to 
the  payment  of  the  tax  the  personal  property  of  the  estate  had 
been  increased  by  the  conversion  of  certain  real  property  which 
had  been  sold  under  a  power  of  sale  contained  in  the  will,  the  ef- 
fect of  such  sale  being  to  entitle  the  executors  to  an  increase  of 
$1,500  in  the  amount  of  their  commissions,  and  (2)  that  in  as- 
sessing the  amount  of  the  transfer  tax  no  deduction  had  ever 
been  made  for  the  commissions  upon  the  real  and  personal  prop- 
erty of  the  deceased  to  which  the  appellants  were  entitled  as 
trustees  under  the  will,  the  tax  on  such  commissions  amounting 
to  the  sum  of  $1,072.74.  *  *  *  (Page  99.)  That  the  Surro- 
gate's Court  possessed  the  power  to  make  the  modification  which 
was  sought  in  this  proceeding.  Since  the  payment  of  the  transfer 
tax  upon  this  estate,  the  Court  of  Appeals  has  decided  that  the 
amount  represented  by  the  expense  of  administration  never 
passes  to  the  legatees  or  next  of  kin,  and  is,  therefore,  not  subject 
to  the  transfer  tax.  (Matter  of  Gihon,  169  N.  Y.  443.)  *  *  * 
It  would  seem,  therefore,  that  the  previous  assessment  of  the  tax 
so  far  as  it  included  such  commissions  was  without  jurisdiction, 


280  THE    COURT   OF   APPEALS   DECISIONS 

and  that  the  Surrogate's  Court  possessed  power  to  modify  its 
prior  decree  so  as  to  exclude  such  commissions  from  considera- 
tion as  any  part  of  the  sum  upon  which  the  tax  was  to  be  as- 
sessed. *  *  *  (Page  100.)  So  far  as  the  conversion  of  a 
portion  of  the  testator's  real  property  into  personal  estate  is  con- 
cerned, it  distinctly  appears  that  such  conversion  took  place  over 
six  months  after  the  payment  of  the  tax,  so  that  the  relief  sought 
on  that  ground  could  not  possibly  have  been  obtained  by  ap- 
peal. 

"The  order  refusing  the  desired  modification  should  be  re- 
versed and  the  case  remitted  to  the  Surrogate's  Court  for  pro- 
ceedings in  accordance  with  this  opinion." 

Vide  §  228.  Matter  of  Willets,  119  App.  Div.  119-123,  affirmed,  without 
opinion,  190  N.  Y.  527;  Matter  of  Townsend,  153  App.  Div.  85-87,  appeal 
pending;  Matter  of  Connelly,  38  Misc.  466;  Matter  of  Weiler,  122  N.  Y. 
Supp.  608;  affirmed,  without  opinion,  139  App.  Div.  905,  and  cases  cited 
sub  Vacating  Decree. 


1903. 

MATTER  OF  LAURA  ASTOR  DELANO,  176  N.  Y.  486  (same 
case,  without  opinion,  in  183  N.  Y.  543),  sustained  in  205 

U.  S.  466,  sub  nom.  Chanler  v.  Kelsey. 

• 

The  Court  of  Appeals  say,  page  489:  "On  the  30th  of  Septem- 
ber, 1848,  William  B.  Astor  owned  a  house  and  lot  on  Lafayette 
Place,  in  the  city  of  New  York,  and  on  that  day  he  conveyed  the 
same  to  his  daughter,  Mrs.  Laura  Delano,  for  life,  and  upon  her 
death,  without  issue,  to  her  brothers  and  her  sister  Alida,  or 
their  issue  as  they  might  then  survive,  per  stirpes. 

"By  the  same  deed  he  conferred  upon  Mrs.  Delano  a  power 
of  appointment,  to  be  exercised,  in  her  discretion,  by  an  instru- 
ment, '  in  its  nature  testamentary,'  in  such  a  manner  as  'to  give 
the  said  land  and  premises,  or  any  share  or  part  thereof,  to  and 
amongst  her  said  *  *  *  brothers  and  sister  Alida,  or  their 
issue,  in  such  manner  and  proportions  as  she  may  appoint.' 

"On  the  6th  of  September,  1849,  said  William  B.  Astor  trans- 
ferred certificates  of  the  public  debt  of  the  state  of  Ohio,  amount- 
ing to  $50,000,  to  James  Gallatin  and  another,  in  trust  to  receive 
the  income  and  apply  it  to  the  use  of  his  daughter  Laura  during 
her  life,  and  upon  her  death  without  issue,  to  transfer  'the  capi- 
tal of  the  said  stock  *  *  *  to  her  surviving  brothers  and 
sister  Alida'  or  their  issue  then  surviving.  This  gift  was  also 


176  N.  Y.  486  281 

subject  to  a  power  of  appointment  created  by  the  trust  deed, 
whereby  the  said  Laura  was  authorized  '  by  any  instrument  duly 
executed  as  a  will  of  personal  estate  to  dispose  of  said  capital 
into  and  amongst  her  *  *  *  brothers,  sister  and  their  issue 
in  such  shares  and  proportions  as  she  may  think  fit  and  upon 
such  limitations,  by  way  of  trust  or  otherwise,  as  in  her  discre- 
tion may  be  lawfully  devised.'  William  B.  Astor  died  on  the 
24th  of  November,  1875,  about  twenty-six  years  after  the  date 
of  the  last  deed,  and  neither  of  said  instruments  was  made  by 
him  in  contemplation  of  death.  Mrs.  Delano,  his  daughter, 
died  June  15,  1902,  without  issue  leaving  a  last  will  and  testa- 
ment, which  has  been  duly  admitted  to  probate,  whereby  she 
exercised  the  power  of  appointment  contained  in  said  deeds  in 
favor  of  Arthur  Astor  Carey,  her  nephew." 

The  Court  of  Appeals,  by  a  divided  court,  held  that  the  exer- 
cise of  the  power  of  appointment  was  taxable  on  the  ground  that 
the  statute  did  (page  491)  "not  attempt  to  impose  a  tax  upon 
property,  but  upon  the  exercise  of  a  power  of  appointment." 

The  United  States  Supreme  Court  say,  page  472:  "The  tax 
in  controversy  was  imposed  under  an  amendment  of  the  general 
transfer-tax  law  of  the  State  of  New  York,  chapter  284,  Laws  of 
1897,  which  provides  as  follows: 

'"  Whenever  any  person  or  corporation  shall  exercise  the  power 
of  appointment  derived  from  any  disposition  of  property  made 
either  before  or  after  the  passage  of  this  act,  such  appointment 
when  made  shall  be  deemed  a  transfer,  taxable  under  the  pro- 
visions of  this  act,  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the 
donee  of  such  power  and  had  been  bequeathed  or  devised  by  such 
donee  by  will.  *  *  * ' 

"The  validity  of  this  tax  was  attacked  in  the  courts  of  New 
York  upon  objections  pertaining  to  both  the  Federal  and  state 
constitutions.  The  latter  are  not  open  here,  and  we  shall  con- 
sider the  case  only  so  far  as  it  relates  to  the  objections  made  to 
the  validity  of  this  statute  by  reason  of  alleged  violations  of  the 
Federal  constitution.  These  are:  First,  that  by  the  imposition 
of  the  tax  the  property  of  the  beneficiaries  is  taken  without  due 
process  of  law,  hi  violation  of  the  Fourteenth  Amendment;  and, 
second,  that  such  taxation  violates  the  obligation  of  a  contract 
within  the  protection  of  section  10  of  Article  1  of  the  Federal 
Constitution. 

"The  objection  that  the  property  is  taken  without  due  process 


282  THE    COURT   OF   APPEALS   DECISIONS 

of  law  is  based  upon  the  argument  that  the  estate  in  remainder 
was  derived  from  the  deeds  of  William  B.  Astor  and  not  under 
the  power  of  appointment  received  from  those  deeds  by  Mrs. 
Laura  A.  Delano.  *  *  *  However  technically  correct  it 
may  be  to  say  that  the  estate  came  from  the  donor  and  not 
from  the  donee  of  the  power,  it  is  self-evident  that  it  was  only 
upon  the  exercise  of  the  power  that  the  estate  in  the  plaintiffs 
in  error  became  complete.  Without  the  exercise  of  the  power  of 
appointment  the  estates  in  remainder  would  have  gone  to  all  in 
the  class  named  in  the  deeds  of  William  B.  Astor.  By  the  exer- 
cise of  this  power  some  were  divested  of  their  estates  and  the 
same  were  vested  in  others.  It  may  be  that  the  donee  had  no 
interest  in  the  estate  as  owner,  but  it  took  her  act  of  appoint- 
ment to  finally  transfer  the  estate  to  some  of  the  class  and  take 
it  from  others.  *  *  *  The  exercise  of  the  power  bestow- 
ing property  in  the  present  case  was  made  by  will.  And  we 
need  not  consider  the  case,  expressly  reserved  by  the  Court  of 
Appeals  in  its  opinion,  as  to  the  result  if  it  had  been  exercised 
by  deed.  *  *  *  As  in  Orr  v.  Oilman,  183  U.  S.  278,  we  must 
accept  this  decision  of  the  New  York  Court  of  Appeals  holding 
that  it  is  the  exercise  of  the  power  which  is  the  essential  thing  to 
transfer  the  estates  upon  which  the  tax  is  imposed.  That  power 
was  exercised  under  the  will  of  Laura  Delano,  a  right  which  was 
conferred  upon  her  under  the  Laws  of  the  State  of  New  York 
and  for  the  exercise  of  which  the  statute  was  competent  to  impose 
the  tax  in  the  exercise  of  the  sovereign  power  of  the  legislature 
over  the  right  to  make  a  disposition  of  property  by  will.  United 
States  v.  Perkins,  163  U.  S.  625-628;  Magoun  v.  Illinois  Trust  & 
Savings  Bank,  170  U.  S.  283-288. 

"We  cannot  say  that  property  has  been  taken  without  due 
process  of  law  within  the  protection  of  The  Fourteenth  Amend- 
ment, by  the  manner  in  which  The  Court  of  Appeals  has  con- 
strued and  enforced  this  statute. 

"Nor  do  we  perceive  that  the  effect  has  been  to  violate  any 
contract  right  of  the  parties.  It  is  said  that  this  is  so,  because 
instead  of  disposing  of  the  entire  estate,  ninety-five  per  cent  of 
the  property  included  in  the  power  has  been  transferred  and  five 
per  cent  taken  by  the  State;  but  as  there  was  a  valid  exercise 
of  the  taxing  power  of  the  State,  we  think  the  imposition  of  such 
a  tax  violated  no  contract  because  it  resulted  in  the  reduction 
of  the  estate. 

"Certainly  the  remaindermen  had  no  contract  with  the  donor 


176  N.  Y.  565  283 

or  with  the  State.  For  whether  the  remaindermen  received 
aliquot  parts  of  the  estate  or  the  same  was  divested  in  whole  or 
in  part  for  the  benefit  of  others  in  the  class,  depended  upon  the 
exercise  of  the  power  by  the  donee.  The  State  was  not  deprived 
of  its  sovereign  right  to  exercise  the  taxing  power  upon  the  mak- 
ing of  a  will  in  the  future  by  which  the  estate  was  given  to  the 
appointees." 

Vide  subdivision  6  of  §  220.  Matter  of  Lansing,  182  N.  Y.  238-247; 
Matter  of  Kidd,  188  N.  Y.  274-279;  Matter  of  Fearing,  200  N.  Y.  340- 
344;  Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218-223;  Matter  of  Bucking- 
ham, 106  App.  Div.  13-19;  Matter  of  Smith,  150  App.  Div.  805-809-812; 
Matter  of  Warren,  62  Misc.  444-447;  Matter  of  Kissel,  65  Misc.  443-444, 
affirmed,  without  opinion,  142  App.  Div.  934;  People  ex  rel.  Ripley  v. 
Williams,  69  Misc.  402-406;  Matter  of  Smith,  80  Misc.  140-144;  Matter  of 
Frazier,  N.  Y.  Law  Journal,  March  28,  1912,  opinion  quoted  sub  Power  of 
Appointment,  page  778. 


1903. 

MATTER  OF  JAMES  S.  GIBBES,  176  N.  Y.  665,  affirms, 

without  opinion,  84  App.  Div.  510,  which  reversed  40 

Misc.  581. 

Testator  died  a  resident  of  South  Carolina,  April  26,  1888, 
leaving  an  estate  of  over  $700,000,  of  which  §300,000  was  in- 
vested in  bonds  of  corporations  foreign  to  the  State  of  New 
York,  which  were  on  deposit  at  the  time  of  his  death  with  the 
Bank  of  New  York  hi  the  city  of  New  York.  He  left  a  last  will 
and  testament  which  was  admitted  to  probate  in  South  Caro- 
lina. The  testator  devised  his  property  in  trust  with  life  estates 
to  his  two  sons  and  grandchild  and  remainders  to  their  respective 
issue,  or,  hi  the  event  of  the  death  of  all  lineal  descendants,  to 
certain  individuals  and  corporations.  On  the  18th  day  of  May, 
1899,  the  testator's  son  James,  his  last  surviving  descendant, 
died  and  the  remainders  vested  in  the  individuals  and  corpora- 
tions as  provided  for  hi  the  will  in  that  contingency.  All  of  the 
beneficiaries  were  non-residents. 

The  court  say,  page  511:  "This  property  having  been  left 
in  trust  and  it  being  uncertain  whether  it  was  transferred  to  per- 
sons or  corporations  liable  for  the  collateral  inheritance  tax, 
its  appraisal  was  postponed  until  the  happening  of  the  con- 
tingency which  resolved  the  uncertainty.1  The  sole  question 
presented  by  the  appeal  is  whether  these  bonds  of  foreign  cor- 
porations left  on  deposit  with  the  bank  in  this  State  at  the  time 


284  THE    COURT   OF   APPEALS   DECISIONS 

of  the  testator's  death,  he  being  a  non-resident,  and  transferred 
by  his  will  or  by  statutes  of  distribution  to  non-residents  are 
taxable  under  the  provisions  of  the  Collateral  Inheritance  Tax 
Law,  so  called.  *  *  *  (Page  513.)  We  are  of  opinion  that 
neither  under  the  amendatory  act  of  1887  any  more  than  under 
the  original  act  of  1885,  are  such  bonds  property  left  within  this 
State  and  subject  to  the  payment  of  the  collateral  inheritance 
tax." 

Vide  subdivision  2  of  §  220.  As  to  bonds  in  non-resident  estates  subse- 
quent to  1892  amendment  and  prior  to  1911  amendment  vide  Matter  of 
Whiting,  150  N.  Y.  27;  Matter  of  Morgan,  150  id.  35;  Matter  of  Fearing, 
200  N.  Y.  340;  Matter  of  Preston,  75  App.  Div.  250.  As  to  U.  S.  bonds 
vide  Matter  of  Schermerhorn,  50  Misc.  233;  Matter  of  Plummer,161  N.  Y. 
631,  sustained  in  178  U.  S.  115,  sub  nom.  Plummer  v.  Coler. 

As  to  transfers  in  non-resident  estates  since  1911  amendment,  \idesupra, 
page  133. 

1  Matter  of  Vanderbilt,  172  N.  Y.  69;  and  footnote,  supra,  page  273,  to 
Matter  of  Brez,  172  N.  Y.  609,  as  to  practice  since  1899  amendment. 


1903. 

MATTER  OF  ELIZABETH  L.  HOWE,  176  N.  Y.  670,  affirms, 
on  opinion  below,  86  App.  Div.  286. 

Testatrix  created  a  trust  for  life,  with  power  of  appointment 
to  the  life  tenant.  The  surrogate  decided  that  the  remainder 
was  not  taxable  until  the  time  comes  for  the  exercise  of  the  tes- 
tamentary power  of  appointment  conferred  upon  the  life  bene- 
ficiaries. The  comptroller  contended  that  the  remainder  was 
presently  taxable  by  virtue  of  chapter  76  of  the  Laws  of  1899, 
which  amended  §  230  of  the  Tax  Law  (Laws  of  1896,  chap- 
ter 908)  by  inserting  therein,  among  other  provisions,  the  follow- 
ing: "When  property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interest  or  estates  of  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in 
part  created,  defeated,  extended  or  abridged,  a  tax  shall  be  im- 
posed upon  said  transfer  at  the  highest  rate  which,  on  the  hap- 
pening of  any  of  the  said  contingencies  or  conditions,  would  be 
possible  under  the  provisions  of  this  article,  and  such  tax  so  im- 
posed shall  be  due  and  payable  forthwith  out  of  the  property 
transferred."  The  court  say,  page  289:  "The  phraseology  of 
this  amendment  of  1899  is  not  such  as  necessarily  to  embrace  a 
case  like  the  present,  where  a  testamentary  power  of  appoint- 


177  N.  Y.  218  285 

ment  is  bestowed  upon  the  life  beneficiary  of  a  trust.  *  *  * 
It  is  to  be  observed  that  the  amendatory  statute  (Laws  of  1899, 
chap.  76)  makes  no  change  whatever  in  any  section  of  the  Tax 
Law,  except  section  230.  *  *  *  (Page  290.)  Neither  Mat- 
ter of  Vanderbilt  (172  N.  Y.  69)  nor  Matter  of  Brez  (id.  609) 
bears  upon  the  question  in  controversy  here.  Those  decisions 
relate  wholly  to  the  effect  of  section  230  of  the  Tax  Law  (as 
amended  by  Laws  of  1899,  chap.  76),  and  the  opinions  contain 
nothing  in  conflict  with  the  views  which  have  been  expressed." 
The  decree  of  the  surrogate's  court  was  affirmed. 

Vide  subdivision  6  of  §  220  and  sixth  paragraph  of  §  230.  Matter  of 
Burgess,  204  N.  Y.  265-269;  Matter  of  Buckingham,  106  App.  Div.  13-20; 
Matter  of  Clarke,  39  Misc.  73,  and  Matter  of  LeBrun,  39  id.  516,  decided 
before  the  Howe  case,  are  of  interest  as  showing  the  doubt  of  the  courts  on 
the  question;  Matter  of  Field,  36  Misc.  279;  Matter  of  Kissel,  65  Misc. 
443-444,  affirmed,  without  opinion,  142  App.  Div.  934;  Matter  of  Gran- 
field,  79  Misc.  374;  Matter  of  Smith,  80  Misc.  140-144;  Matter  of  Stuart, 
N.  Y.  Law  Journal,  May  10,  1913,  opinion  quoted  sub  Power  of  Appoint- 
ment, page  772;  Matter  of  Lane,  157  App.  Div.  694-697;  Matter  of  Turner, 
82  Misc.  25-26. 


1904. 

WILLIAM  B.  ISHAM  ET  AL.  AS  EXECUTORS,  ETC.,  v. 

N.  Y.  ASSN.  FOR  IMPROVING  CONDITION  OF  THE 

POOR,  177  N.  Y.  218. 

This  was  a  submission  of  a  controversy  to  the  Appellate  Divi- 
sion under  §  1279  of  the  Code  of  Civil  Procedure.  The  question 
submitted  was  whether  certain  transfer  taxes  upon  a  fund  of 
$500,000  are  to  be  paid  by  the  recipients  of  that  fund  or  out  of 
the  residuary  estate  of  Mary  J.  Walker,  deceased,  the  plaintiffs' 
testatrix.  By  the  will  of  John  Watson,  the  father  of  testatrix, 
she  was  given  a  power  of  appointment  of  a  fund  of  $500,000 
which  was  in  the  hands  of  trustees  who  were  to  pay  her  the  in- 
come thereof  during  her  life,  "and  to  pay  over  the  principal  as 
the  said  Mary  J.  Walker  might  by  will  direct."  By  her  will, 
Mrs.  Walker  provided  hi  the  1st  clause  as  follows:  "I  give  and 
bequeath  the  trust  fund  of  five  hundred  thousand  dollars  now 
held  for  my  benefit  to  [sic]  Ambrose  K.  Ely,  as  trustee  under 
the  last  will  and  testament  of  my  father,  the  late  John  Watson, 
over  which  trust  fund  I  have  a  power  of  disposition  by  will,  as 
follows,  to  wit:"  She  then  proceeds  to  dispose  of  the  whole  prin- 
cipal sum  among  some  twelve  charitable  or  benevolent  insti- 


286  THE    COURT   OF   APPEALS   DECISIONS 

tutions  in  the  city  of  New  York,  all  of  which  are  capable  of  tak- 
ing by  bequest.  After  the  provisions  of  the  will  concerning  the 
disposition  of  the  trust  fund  of  five  hundred  thousand  dollars 
the  testatrix  proceeds  to  make  many  specific  gifts  directly  or  in 
trust  of  large  sums  of  money,  using  as  to  each  the  same  phrase, 
"I  give  and  bequeath,"  as  in  the  1st  clause.  In  the  23d  clause 
she  provides  as  follows:  "I  direct  and  authorize  my  executors 
hereinafter  named  to  pay  out  of  my  residuary  estate  any  and  all 
transfer  or  inheritance  taxes  that  may  be  imposed  or  become 
due  upon  any  of  the  legacies  hereinbefore  made,  whether  such 
taxes  be  State  or  Federal."  1 

It  is  claimed  on  the  part  of  the  recipients  of  the  trust  fund  that 
this  23d  clause  applies  to  the  provisions  of  the  will  under  which 
they  take,  while  the  plaintiffs,  on  the  other  hand,  contend  that 
the  operation  of  the  23d  clause  is  limited  strictly  to  such  legacies 
as  are  given  by  the  testatrix  payable  out  of  her  own  individuaj 
estate. 

Held,  that  the  transfer  taxes  should  be  paid  by  the  executors 
of  Mary  J.  Walker  out  of  her  residuary  estate. 

Vide  §  224. 

1  Jackson  v .  Tailer,  41  Misc.  36,  affirmed,  without  opinion,  184  N.  Y. 
603;  Matter  of  Smith,  80  Misc.  140-143;  Matter  of  Samuel  Myers,  N.  Y. 
Law  Journal,  November  22,  1913,  opinion  quoted  supra,  page  759. 


1904. 

MATTER  OF  MARIA  F.  MILLS,  177  N.  Y.  662,  affirms,  with- 
out opinion,  86  App.  Div.  555,  which  affirms,  on  opinion 
of  surrogate,  32  Misc.  493. 

The  decedent  was  a  beneficiary  under  the  will  of  her  father 
who  directed  the  sale  of  his  real  property,  and  it  thus  became  in 
equity  personalty.  His  daughter,  Mrs.  Mills,  under  his  will 
took  a  share  in  the  proceeds  of  the  realty.  She  survived  her 
father  a  few  years,  but  died  before  an  actual  sale  and  conversion 
had  taken  place.  Mrs.  Mills  left  a  will  by  which  her  interest  in 
her  father's  estate  passed  to  her  husband,  John  F.  Mills,  the 
respondent  here.  The  appraiser  held  that  the  interest  passing 
to  Mr.  Mills  under  the  will  of  his  wife  was  real  estate,  and  the 
transfer  to  him,  consequently,  was  not  taxable. 

Surrogate  Silkman  said,  page  557:  "Mrs.  Mills  did  not  die 
possessed  of  the  title  to  the  real  estate;  she  died  possessed  of  a 


178  N.  Y.  575  287 

right  to  a  distributive  share  in  the  proceeds  of  real  estate  which 
her  father's  executor  was  directed  to  sell.  *  *  * 

"  (Page  558.)  The  property  passed  from  her  father  as  realty. 
By  the  rule  of  equitable  conversion  it  became  personalty  in  Mrs. 
Mills'  hands,  and  the  proceeds  or  the  right  thereto  passed  from 
her  to  her  husband  as  personalty.  *  *  * 

"The  only  ground  upon  which  it  can  be  claimed  that  the  suc- 
cession to  the  proceeds  of  the  real  estate  originally  owned  by 
her  father,  the  right  to  which  proceeds  passed  from  Mrs.  Mills, 
to  her  husband,  the  respondent,  can  escape  taxation,  is  the  as- 
sumed right  to  reconvert  in  equity  and  take  the  property  in 
specie,  instead  of  the  proceeds.  But  as  laws  providing  for  sys- 
tems of  taxation  are  to  be  construed  as  relating  to  facts,  and 
not  according  to  equitable  rules,  under  the  authority  of  Matter 
of  Sutton,  149  N.  Y.  618,  the  decree  assessing  the  tax  must  be 
reversed,  and  the  matter  sent  back  to  the  appraiser  for  further 
hearing." 

Vide  §§  220  and  221a.  The  transfer  in  this  case  was  made  before  the 
amendment  to  the  statute  which  first  taxed  transfer  of  real  property  to 
persons  of  1%  class,  chapter  41,  Laws  of  1903,  in  effect  March  16,  1903. 
As  to  equitable  conversion  vide  Matter  of  Dows,  167  N.  Y.  227-232,  sus- 
tained in  183  U.  S.  278,  sub  nom.  Orr  v.  Oilman;  Matter  of  Baker,  67 
Misc.  360. 


1904. 

MATTER  OF  HENRY  B.  BAKER,  178  N.  Y.  675,  affirms,  on 

opinion  below,  83  App.  Div.  530,  which  affirmed  38  Misc. 

151. 

Intestate  died  a  resident  July  25,  1901.  He  was  married  on 
January  11, 1900,  and  prior  to  such  marriage  the  parties  entered 
into  a  written  ante-nuptial  agreement  by  which  the  intestate 
agreed  to  leave  her  by  will  the  sum  of  $20,000.  After  his  death 
an  arrangement  was  entered  into  between  his  widow  and  a  sister 
of  intestate  whereby  the  widow  accepted  the  proceeds  of  a 
$10,000  life  insurance  policy,  upon  the  life  of  the  intestate  which 
had  been  transferred  to  her  by  the  intestate,  in  part  satisfaction 
of  the  amount  due  her  upon  her  contract,  and  the  remaining  sum 
of  $10,000,  with  interest,  was  subsequently  paid  to  her  from  the 
estate. 

The  court  say,  page  532:  "The  only  question  involved  hi  this 
appeal  is  the  construction  to  be  given  to  subdivision  3  (now  4) 
of  section  220  of  the  General  Tax  Law  (Laws  of  1896,  chap.  908, 


288  THE   COURT   OF  APPEALS   DECISIONS 

as  amended  by  Laws  of  1897,  chap.  284),  which  provides  for  the 
imposition  of  a  transfer  tax  'when  the  transfer  is  of  property 
made  by  a  resident  *  *  *  by  deed,  grant,  bargain,  sale  or 
gift  made  hi  contemplation  of  the  death  of  the  grantor,  vendor 
or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death.' 

"  It  will  be  doubtless  conceded  that  the  respondent's  claim  is 
not  one  which  is  dependent  for  its  validity  upon  a  deed  or  grant 
of  any  kind,  and,  furthermore,  that  it  is  not  testamentary  in  its 
character,  although  it  did  not  become  due  and  payable  until 
after  the  death  of  her  husband.  It  was  simply  the  outgrowth  of 
a  contract  entered  into  between  the  decedent  and  the  claimant, 
which  was  founded  upon  a  perfectly  good  and  valuable  consider- 
ation, and  one  which  is  regarded  with  favor  by  the  law  and  will 
generally  be  enforced  in  accordance  with  the  intention  of  the 
parties.  (Johnston  v.  Spicer,  107  N.  Y.  185;  Peck  v.  Vandemark, 
99  id.  29;  White  v.  White,  20  App.  Div.  560.) 

"  It  would  seem  to  follow,  therefore,  that  a  claim  arising  from 
such  a  source  is  in  the  nature  of  a  debt  against  the  estate  and  as 
such  enforcible  like  any  other  debt  (Hegeman  v.  Moon,  131 
N.  Y.  462;  Warner  v.  Warner,  18  Abb.  N.  C.  151);  and  if  this  is 
its  character  we  do  not  see  why  it  should  be  subject  to  taxation 
under  the  Transfer  Tax  Law  any  more  than  if  it  were  a  debt 
represented  by  a  bond  or  note. 

"(Page  533.)  But  it  is  said  that  the  contract  was  entered  into 
in  contemplation  of  and  was  not  'intended  to  take  effect  in 
possession  or  enjoyment'  until  after  the  death  of  the  obligor. 
This,  in  a  certain  sense,  is  doubtless  true,  as  it  would  be  of  any 
other  form  of  debt  the  payment  of  which  was  deferred  until 
after  the  death  of  the  debtor,  but  this  does  not  affect  its  valid- 
ity nor  alter  its  character. 

"Neither,  in  our  opinion,  does  it  subject  the  debt  to  taxation 
under  the  act  hi  question,  unless  it  can  be  shown  that  the  agree- 
ment was  entered  into  in  bad  faith  and  with  some  evasive  in- 
tent. (Matter  of  Bullard,  76  App.  Div.  207,  citing  with  ap- 
proval, Matter  of  Spaulding,  49  id.  541.) 

"This  court  has  held  that  the  words  'in  contemplation  of  the 
death'  do  not  refer  to  that  general  expectation  which  every 
mortal  entertains,  but  rather  the  apprehension  which  arises 
from  some  existing  condition  of  body  or  some  impending  peril." 

Held,  that  the  amount  paid  in  settlement  of  the  claim  under 
the  ante-nuptial  agreement  was  not  taxable,  there  being  nothing 


179  N.  Y.  285  289 

in  the  case  to  lead  the  court  "to  suppose  that  the  ante-nuptial 
contract  was  entered  into  with  any  design  to  evade  the  law  or 
that  its  provisions  for  the  benefit  of  the  respondent  were  made 
in  contemplation  of  death,  within  the  meaning  of  that  term"  as 
the  court  defined  it. 

Vide  subdivision  4  of  §  220;  Matter  of  Craig,  97  App.  Div.  289,  affirmed, 
on  opinion  below,  181  N.  Y.  551;  Matter  of  Hess,  110  App.  Div.  476-478, 
affirmed  on  opinion  of  Spring,  J.,  187  N.  Y.  554;  Matter  of  Kidd,  188  N.  Y. 
274-279;  Matter  of  Majot,  135  App.  Div.  409-411,  affirmed,  with  opinion, 
199  N.  Y.  29;  Matter  of  Demers,  41  Misc.  470-473;  Matter  of  Victor,  N.  Y. 
Law  Journal,  May  8, 1913,  opinion  quoted  sub  Good  Will,  page  714;  Matter 
of  Ahrens,  id.,  May  14,  1913,  opinion  quoted  sub  Contemplation  of  Death. 


1904. 

IN  THE  MATTER  OF  THE  APPRAISAL  UNDER  THE 
TRANSFER  TAX  ACT  OF  THE  TRUST  ESTATE  HELD 
FOR  THE  LIFE  OF  JOHN  O'BERRY  WITH  RE- 
MAINDER, UNDER  THE  WILL  OF  LOFTIS  WOOD, 
DECEASED,  179  N.  Y.  285. 

Loftis  Wood  died  on  the  16th  day  of  April,  1884,  leaving  a  last 
will  and  testament,  which  was  admitted  to  probate  by  the  Sur- 
rogate's Court  of  Kings  county  on  May  6,  1884.  By  the  terms 
of  this  will  certain  property  was  directed  to  be  held  in  trust  for 
John  O'Berry  during  his  life,  and  upon  his  death  to  be  divided 
among  certain  remaindermen,  among  whom  was  Mary  J.  Howey, 
the  petitioner  in  this  proceeding.  John  O'Berry  died  on  the  18th 
day  of  August,  1901.  Thereafter  a  proceeding  was  instituted  by 
the  executor  of  the  said  Loftis  Wood  for  the  appraisement  of 
said  remainder  interests  for  taxation,  resulting,  on  December  4, 
1901,  in  an  order  of  the  Surrogate's  court  taxing  the  transfer  to 
Mary  J.  Howey  at  $1,172.88. 

The  court  say,  page  287:  "Subsequently  this  court  held 
that  a  transfer  tax  upon  remainders  vested  prior  to  the  pas- 
sage of  the  law  taxing  such  interests  was  void  as  in  conflict  with 
the  Constitution.  (Matter  of  Pell,  171  N.  Y.  48.)  *  *  *  In 
this  case  the  Surrogate  has  reversed  his  original  order  and  di- 
rected the  comptroller  to  refund  the  tax  so  paid  with  inter- 
est. *  /  * 

"The  tax  hi  question  was  imposed  and  collected  by  the  state 
under  color  of  a  law  that  was  absolutely  void.  It  was  a  void  tax 
and  not  merely  voidable  for  some  irregularity  or  error,  and  had 
19 


290  THE   COURT   OF   APPEALS   DECISIONS 

no  support  except  an  unconstitutional  statute.  Such  a  law  is 
simply  void.  It  confers  no  rights,  imposes  no  duties,  confers  no 
power,  and  in  legal  contemplation  is  as  inoperative  for  any  pur- 
pose, as  if  it  had  never  been  passed.  (Norton  v.  Shelby  County, 
118  U.  S.  425;  Matter  of  Brenner,  170  N.  Y.  185-194.)  So  that 
the  only  question  before  us  is  whether  the  comptroller,  having 
received  the  money  without  right  and  used  it  for  the  purposes 
of  the  state  under  a  promise  to  refund  it,  was  properly  charged 
by  the  court  with  interest.  *  *  *  (Page  288.)  In  the 
Scrimgeour  case,  the  Surrogate,  under  the  same  statute,  re- 
versed the  order  imposing  the  tax,  as  he  did  in  this  case,  and 
directed  that  it  be  refunded  with  interest.  That  order  was  af- 
firmed at  the  Appellate  Division  (80  App.  Div.  388)  and  in  this 
court  (175  N.  Y.  507)." 

Held,  (page  291)  that  the  contention  of  the  comptroller  "that 
the  payment  of  the  tax  was  voluntary  and  hence  not  recoverable 
needs  no  answer,  since  a  tax  collected  and  paid  under  a  void  law 
can  never  be  deemed  a  voluntary  act  on  the  part  of  the  tax- 
payer." Further,  (page  293)  that  the  surrogate  was  correct  in 
directing  that  the  refund  be  made  with  interest.1 

1  Section  225  was  amended  by  chapter  323,  Laws  of  1907,  in  effect  May  8, 
1907,  by  specifically  providing  that  "the  representatives  of  the  estate, 
legatees,  devisees  or  distributees  entitled  to  any  refund  under  this  section 
shall  not  be  entitled  to  any  interest  upon  such  refund." 

As  to  vacating  decree  vide  Matter  of  Hoople,  179  N.  Y.  308;  Matter  of 
Willets,  119  App.  Div.  119-123,  affirmed,  without  opinion,  190  N.  Y.  527, 
and  cases  cited  sub  Vacating  Decree. 

As  to  remainders  accrued  prior  to  statute  vide  Matter  of  Haight,  76 
Misc.  380-382,  affirmed,  152  App.  Div.  228,  and  cases  cited  in  Matter  of 
Smith,  150  App.  Div.  805-808. 


1904. 

MATTER  OF  WILLIAM  H.  HOOPLE,  179  N.  Y.  308,  re- 
verses 93  App.  Div.  486. 

Testator  died  June  17,  1895.  The  Appellate  Division  say, 
page  487:  ''The  tax  which  the  executor  paid  to  the  count}' 
treasurer  of  Queens  county  on  November  29,  1895,  under  the 
compulsion  of  an  order  of  the  Surrogate's  Court  made  on  the 
9th  day  of  August  in  the  same  year,  was  assessed  upon  bonds  of 
the  United  States  government  which  were  exempt  from  taxation 
under  the  Transfer  Tax  Law  of  1892  (chap.  399),  and  the  assess- 


179  N.  Y.  308  291 

ment  was,  therefore,  illegal  and  void.  (Matter  of  Whiting, 
150  N.  Y.  27;  Matter  of  Sherman,  153  id.  1.)  This  is  conceded 
by  the  respondent. 

"The  order  under  review,  however,  vacating  the  order  taxing 
the  United  States  bonds  of  the  decedent  was  not  applied  for  or 
made  until  October,  1903,  nearly  eight  years  after  the  tax  had 
been  paid,  and  the  principal  contention  upon  this  appeal  is  that 
the  executor's  right  to  enforce  a  repayment  as  against  the 
State  Comptroller  is  barred  by  the  lapse  of  time  and  the  Statute 
of  Limitations." 

The  Court  of  Appeals  say,  page  311:  "It  is  a  fundamental 
principle  of  our  jurisprudence  that  no  action  will  lie  against  a 
sovereign  state,  or  any  of  its  officers,  to  enforce  an  obligation  of 
the  state  without  express  legislative  permission  (People  v.  Den- 
nison,  84  N.  Y.  272;  Lewis  v.  State  of  N.  Y.,  96  id.  71;  Locke  v. 
State  of  N.  Y.,  140  id.  480;  Smith  v.  Reeves,  178  U.  S.  436; 
Flagg  v.  Bradford,  181  Mass.  315);  and  when  a  state  does 
abdicate  this  attribute  of  sovereignty  and  permits  itself  to  be 
sued,  the  citizen  who  benefits  by  such  an  act  of  grace  acquires 
no  vested  right  thereby,  but  simply  a  privilege  voluntarily 
granted  by  the  state,  which  may  be  hedged  about  with  terms  and 
conditions,  and  may  be  withdrawn  as  freely  as  it  was  given. 
[Beers  v.  Arkansas,  20  How.  (U.  S.)  527;  Parmenter  v.  State  of 
N.  Y.,  135  N.  Y.  154;  Baltzer  v.  North  Carolina,  161  U.  S. 
240;  Railroad  Company  v.  Tennessee,  101  id.  337;  Railroad  v. 
Alabama,  id.  832.]  In  the  light  of  these  principles  it  is  obvious 
that  the  statutes  under  discussion  (ch.  399,  L.  1892;  ch.  284,  L. 
1897;  ch.  382,  L.  1900)  invested  the  respondent  with  no  abso- 
lute right,  but  conferred  upon  him  a  mere  privilege,  the  extent 
and  duration  of  which  depended  entirely  upon  the  language 
conferring  it." 

The  court  discusses  the  various  statutes  in  effect  during 
said  eight  years  and  held  that  claim  was  barred  by  lapse  of 
time,  and  reversed  the  surrogate  and  the  Appellate  Division. 

Vide  §  225.  Matter  of  O'Berry,  179  N.  Y.  285;  Matter  of  Buckingham, 
106  App.  Div.  13-17;  Matter  of  von  Post,  35  Misc.  367;  Matter  of  Town- 
send,  153  App.  Div.  85,  appeal  pending;  Matter  of  Scott,  208  N.  Y.  602, 
quoted  post,  page  396,  and  cascu  cited  sub  Vacating  Decree. 


292  THE    COURT  OF  APPEALS   DECISIONS 

1904. 

IN  THE  MATTER  OF  THE  ACCOUNTING  OF  WILLIAM 
G.  TRACY  ET  AL.,  AS  EXECUTORS  OF  AND  TRUS- 
TEES UNDER  THE  WILL  OF  GEORGE  N.  KENNEDY, 
179  N.  Y.  501. 

Testator  died  September  7,  1901.  The  court  say,  page  505: 
"The  will  is  lengthy,  containing  numerous  provisions,  but  its 
general  scheme  can  be  briefly  stated.  The  entire  property,  real 
and  personal,  after  the  payment  of  debts  and  legacies,  is  con- 
verted into  trust  estates  for  the  benefit  of  life  tenants  and 
remainder-men,  all  of  the  latter  being  contingent,  depending 
upon  the  status  at  the  death  of  the  life  tenant,  except  the  de- 
fendant, the  Syracuse  University,  which  takes  its  estate  in  re- 
mainder upon  the  death  of  Elizabeth  K.  Freeman,  a  daughter 
of  the  testator." 

The  executors  and  trustees  attack  the  decree  of  the  Surro- 
gate's Court  of  Onondaga  county,  entered  upon  the  judicial 
settlement  of  their  accounts,  to  wit: 

(1)  Wherein  it  adjudges  that  the  taxes  on  life  estates,  created 
by  the  will,  assessed  under  the  State  Transfer  Tax  Law  and  the 
United  States  War  Revenue  Tax  Law,  should  be  deducted  from 
the  income  and  rents,  to  which  each  of  said  life  tenants  were 
respectively  entitled,  before  any  part  of  the  same  should  be 
paid  to  them. 

(2)  Wherein  it  is  adjudged  that  out  of  the  income  of  the 
personal  property  of  the  deceased,  now  in  the  hands  of  said 
executors,  they  pay  to  James  Rohm  the  sum  of  $350.00,  for  and 
on  account  of  his  annuity,  from  the  death  of  the  testator  up  to 
the  4th  day  of  November,  1902,  from  which  shall  be  deducted 
the  state  tax  of  $146.34,  and  that  said  annuity  be  paid  by  deduct- 
ing the  same  from  the  wages  of  said  Rohm,  paid  to  him  by  said 
executors,  amounting  to  $65.00  a  month. 

The  Transfer  Tax  Law  as  it  existed  after  the  amendment  of 
1899  and  1900  is  applicable  to  this  case.  The  court  say,  page 
508:  "These  amendments  are  sought  to  supply  what  were 
deemed  omissions  in  the  Transfer  Tax  Law  as  it  then  stood,  as 
some  of  the  courts  had  decided  that  the  Transfer  Tax  on  life 
estates  was  payable  out  of  income  and  no  tax  could  be  imposed 
on  contingent  remainders.  (Matter  of  Johnson,  6  Demarest, 
146;  Matter  of  Roosevelt,  143  N.  Y.  120.)  The  present  appeal 
is  controlled  by  the  Transfer  Tax  Law  (Laws  of  1896,  chapter 


179  N.  Y.  501  293 

908,  section  230),  as  amended  by  chapter  76  of  the  Laws  of  1899 
and  chapter  658  of  the  Laws  of  1900.  The  material  portions  of 
section  230  read  as  follows:  'Whenever  a  transfer  of  property  is 
made,  upon  which  there  is,  or  in  any  contingency  there  may  be, 
a  tax  imposed,  such  property  shall  be  appraised  at  its  clear  mar- 
ket value  immediately  upon  such  transfer,  or  as  soon  thereafter 
as  practicable.  The  value  of  every  future  or  limited  estate,  in- 
come, interest  or  annuity  dependent  upon  any  life  or  lives  in  be- 
ing, shall  be  determined  by  the  rule,  method  and  standard  of 
mortality  and  value  employed  by  the  superintendent  of  insur- 
ance in  ascertaining  the  value  of  policies  of  life  insurance  and 
annuities  for  the  determination  of  liabilities  of  life  insurance  com- 
panies, except  that  the  rate  of  interest  for  making  such  computa- 
tion shall  be  five  per  centum  per  annum.  *  *  *  When  prop- 
erty is  transferred  in  trust  or  otherwise,  and  the  rights,  interests 
or  estates  of  the  transferees  are  dependent  upon  contingencies  or 
conditions  whereby  they  may  be  wholly  or  in  part  created,  de- 
feated, extended  or  abridged,  a  tax  shall  be  imposed  upon  said 
transfer  at  the  highest  rate  which,  on  the  happenings  of  any 
of  the  said  contingencies  or  conditions,  would  be  possible  under 
the  provisions  of  this  article,  and  such  tax  so  imposed  shall  be 
due  and  payable  forthwith  by  the  executors  or  trustees  out  of 
the  property  transferred.' 

"It  thus  appears  that  whenever  a  transfer  of  property  is 
made,  upon  which  there  is,  or  by  any  contingency  there  may  be, 
a  tax  imposed,  the  property  is  to  be  properly  appraised  at  its 
clear  market  value  and  the  transfer  tax  is  due  and  payable 
forthwith  out  of  the  property  transferred. 

"  In  Matter  of  Vanderbilt  (172  N.  Y.  69)  this  court  construed 
section  230  of  the  Transfer  Tax  Law,  as  affecting  the  payment 
of  the  tax  upon  contingent  remainders,  and  held  that  the  tax 
was  payable  forthwith  out  of  the  property  transferred.1  *  *  * 

"  (Page  509.)  As  our  decision  in  Matter  of  Vanderbilt  (supra) 
dealt  only  with  a  contingent  remainder,  this  case,  technically 
speaking,  is  not  strictly  in  point,  but  the  principle  announced 
therein  is  necessarily  involved  in  life  estates  created  by  trusts. 

"  In  the  case  at  bar  it  is  the  duty  of  the  executors  and  trustees 
to  ascertain  the  value  of  the  respective  life  estates  and  estates 
in  remainder  in  the  manner  pointed  out  by  section  230;  and 
having  done  this,  they  should  compute  the  transfer  tax  and  pay 
the  same  forthwith  out  of  the  property  transferred.  The  result 
is  that  the  life  tenant  loses,  during  the  continuance  of  his  estate, 


294  THE    COURT   OF   APPEALS   DECISIONS 

the  interest  upon  the  corpus  of  the  trust  so  paid  out,  and  even- 
tually the  remainderman  receives  his  estate  diminished  by  the 
amount  of  said  payment. 

"Whether  this  mode  of  taxation  works  out  exact  justice  as 
between  the  life  tenant  and  the  remainderman  is  a  question 
with  which  the  court  is  not  concerned. 

"As  we  read  the  statute,  the  legislative  intention  is  clear  that 
the  transfer  tax  shall  be  paid  out  of  the  corpus  of  the  trust 
estates,  and  not  out  of  the  income. 

"It,  therefore,  follows  that  the  transfer  taxes  imposed  upon 
the  estates  for  life  and  in  remainder,  created  by  the  eighty- 
thousand  dollar  trust,  under  which  testator's  daughter,  Jessie  B., 
is  the  life  tenant,  are  payable  out  of  the  principal  of  that  trust. 

"Also  that  the  transfer  taxes  imposed  upon  the  estates  for 
life  and  in  remainder,  in  the  various  trusts  carved  out  of  the 
residuary  estate,  are  payable  from  the  principal  of  said  trusts 
respectively. 

"We  will  now  consider  the  second  provision  of  the  decree, 
from  which  appeal  is  taken,  in  reference  to  the  annuity  of  three 
hundred  dollars  for  the  benefit  of  James  Rohm,  payable  semi- 
annually.  Annuities  are  expressly  referred  to  by  section  230,  as 
already  quoted.  The  manner  in  which  this  annuity  is  dealt 
with  in  the  decree  of  the  learned  surrogate  is  unsupported  by  the 
statute.  The  probable  duration  of  the  annuitant's  life  should  be 
ascertained  in  the  manner  pointed  out  by  section  230,  which  is 
under  the  rule,  method  and  standard  of  mortality  and  value 
employed  by  the  superintendent  of  insurance  in  ascertaining 
the  value  of  policies  of  life  insurance  and  annuities,  etc.  This 
fact  being  ascertained,  the  amount  of  the  transfer  tax  is  com- 
puted thereon  and  becomes  forthwith  payable  out  of  the  fund 
set  aside  for  creating  the  annuity.  (In  this  case  it  happens  to 
be  the  residuary  estate.) 

"The  method  of  returning  to  the  residuary  estate  the  tax  so 
paid  by  the  trustees  is  as  follows:  Take  for  illustration  an  annui- 
tant whose  probable  duration  of  life  is  ten  years.  The  trustees 
would  deduct  from  each  annual  payment  as  made  one-tenth  of 
the  tax  and  restore  it  to  the  residuary  estate. 

"  In  the  case  at  bar  the  death  of  the  annuitant  was  suggested 
on  the  argument  as  having  taken  place  since  that  of  the  testator. 
Any  portion  of  the  transfer  tax  not  restored  to  the  estate  by  the 
process  indicated  at  the  time  of  the  annuitant's  death  would  be  a 
loss  which  the  residuary  estate  must  sustain. 


179  N.  Y.  526  295 

"The  payment  of  the  annuity  by  deducting  the  same  from  the 
wages  of  said  Rohm,  paid  to  him  by  said  executors,  amounting 
to  sixty-five  dollars  a  month,  as  provided  in  the  surrogate's 
decree,  is  wholly  irregular.  The  annuity  was  based  on  the  long 
and  faithful  services  of  the  annuitant,  and  is  entirely  distinct 
from  the  matter  of  wages  which  were  to  be  paid  him  by  the 
executors  if  he  remained  in  the  service  of  the  daughter,  to  Jessie 
B." 

1  Vide  footnote,  page  269,  to  Matter  of  Vanderbilt,  172  N.  Y.  69;  Matter 
of  Kennedy,  93  App.  Div.  27. 

As  to  annuities  vide  third  paragraph  of  §  230;  Matter  of  Maresi,  74 
App.  Div.  76;  Matter  of  Hutchinson,  105  App.  Div.  487;  opinion  of  Comp- 
troller, Matter  of  Sidney,  2  State  Department  Reports,  505;  Matter  of 
Hall,  36  Misc.  618;  see,  however,  Matter  of  White,  208  N.  Y.  64,  and 
Matter  of  Jones,  28  Misc.  356,  affirmed,  172  N.  Y.  575. 

As  to  payment  of  tax  out  of  corpus  and  not  out  of  income  vide  Matter  of 
Hoyt,  44  Misc.  76;  Matter  of  Bass,  57  Misc.  531-533;  Matter  of  Title 
Guarantee  &  Trust  Co.,  81  Misc.  106-112. 


1904. 

MATTER  OF  JOSHUA  MATHER,  179  N.  Y.  526,  affirms, 
without  opinion,  90  App.  Div.  382. 

Testator  died  August  1893.  By  his  will  he  gave  to  Charles 
W.  Mather,  a  nephew,  the  possession,  use,  income,  profits  and 
rents  of  the  residuary  estate  during  his  lifetime,  and  the  entire 
control  and  management  of  the  estate,  personal  and  real,  as  he 
might  deem  for  his  best  interests,  and  that  of  the  persons  who, 
under  the  will,  would  be  ultimately  interested  in  the  estate, 
of  which  he  was  to  have  the  income  during  his  lifetime,  authoriz- 
ing him  to  conduct  the  business  in  the  name  of  the  testator  or 
otherwise,  and  empowering  the  said  Charles  W.  Mather  to 
make  such  disposition  of  the  estate  as  he  might  deem  wise 
among  his  descendants  whom  he  might  leave,  and  in  such  prop- 
ositions and  amounts  as  he  might  desire.  He  further  provided 
that  if,  for  any  reason,  the  said  Charles  W.  Mather  failed  to 
make  such  will,  or  if  such  will  was  not  admitted  to  probate,  the 
property  enjoyed  by  said  Charles  W.  Mather  during  his  lifetime 
should  go  to  the  persons  whom  the  said  Charles  W.  Mather 
might  leave  as  his  next  of  kin  and  heirs  at  law,  at  the  time  of 
his  death  in  the  same  manner  and  proportions  as  if  the  said 


296  THE    COURT   OF   APPEALS   DECISIONS 

Charles  W.  Mather  had  been  the  absolute  owner  thereof  at  the 
date  of  his  death  and  had  died  intestate  and  unmarried. 

(Page  384.)  Upon  the  transfer  tax  appraisal  of  the  estate  of 
his  uncle  "Charles  W.  Mather  was  examined  and  testified 
that  Joshua  Mather,  at  the  time  of  his  death,  was  the  owner  of 
certain  real  estate  in  the  city  of  Utica  and  known  as  the  Arcade 
property. 

"This  Arcade  property  was  appraised  at  $175,000  and  the  tax 
upon  the  life  interest  of  Charles  W.  Mather  was  fixed  at  $4,852. 
The  tax  upon  the  residuary  interest  was  suspended  until  the 
death  of  Charles  W.  Mather,  as  it  was  uncertain  to  whom  the 
property  would  descend;  if  it  was  disposed  of  by  the  will  of 
Charles  W.  Mather,  his  estate  would  be  liable  for  the  tax,  and 
if  not,  then  the  persons  to  whom  it  descended  would  be  charge- 
able therewith. 

"  Charles  W.  Mather  died  in  November,  1899,  intestate,  not 
having  exercised  the  power  of  disposition  given  by  the  will. 
The  petitioners  are  the  heirs  of  Charles  W.  Mather. 

"After  the  death  of  Charles  W.  Mather,  a  deed,  executed  by 
Joshua  Mather  to  Charles  W.  Mather,  conveying  the  Arcade 
property  above  mentioned  was  found  among  the  papers  of 
Charles  W.  Mather.  The  petitioners  thereafter  upon  investiga- 
tion, made  an  application  to  the  Surrogate's  Court  to  have  the 
assessment  set  aside,  the  Arcade  property  stricken  from  the 
proceedings  had  upon  the  assessment,  to  correct  the  report  and 
order  by  striking  therefrom  the  amount  included  therein  as  a 
tax  upon  the  Arcade  property,  and  for  other  relief.  The  sur- 
rogate, upon  such  application,  after  taking  evidence,  modified 
the  order,  in  so  far  as  it  assumed  to  assess  a  tax  against  the  heirs 
of  Charles  W.  Mather,  but  refused  to  set  aside  or  modify  the 
assessment  as  against  Charles  W.  Mather."  * 

The  court,  in  affirming  the  surrogate's  order,  say  (page  385) : 
"  The  evidence  clearly  showed  that  the  deed  from  Joshua 
Mather  to  Charles  W.  Mather  was  made  and  delivered  during 
the  lifetime  of  Joshua  Mather,  and,  although  it  was  not  re- 
corded until  after  the  death  of  Charles  W.  Mather,  there  was 
nothing  to  impeach  its  validity,  except  the  statement  made 
by  Charles  W.  Mather  upon  the  assessment  proceedings. 

"  It  is  true  that  the  evidence  that  he  made  a  statement  is  not 
contradicted,  nor  is  it  explained,  and  it  may  be  quite  possible 
that  if  the  original  parties  were  able  to  speak,  some  explanation 
could  be  given  of  that  statement;  but  whatever  force  it  might 


179  N.  Y.  599  297 

have  against  Charles  W.  Mather,  his  heirs,  the  petitioners 
herein,  would  not  be  bound  by  such  statement. 

"  Charles  W.  Mather,  for  some  undisclosed  reason,  determined 
to  ignore  the  absolute  title  for  the  time  being  and  submit  to  the 
imposition  of  the  tax.2  He  was  under  no  restraint  or  duress; 
whatever  he  did  was  voluntary,  and,  presumably,  for  what  he 
deemed  to  be  his  best  interests.  His  heirs,  however,  have  the 
same  right  that  he  had,  namely,  to  rely  upon  their  title  under  the 
will  of  Joshua  Mather,  or  upon  the  deed  from  Joshua  Mather. 
Unlike  their  ancestor,  they  prefer  to  rely  upon  the  deed,  and 
they  are  not  foreclosed  from  doing  this  by  any  act  of  Charles  W. 
Mather.  It  is  true  that,  as  to  the  property,  they  acquire  no 
better  title  than  Charles  W.  Mather  had,  but  as  to  the  method 
of  the  enjoyment  of  their  estate,  they  are  quite  independent  of 
and  not  bound  by  any  acts  of  Charles  W.  Mather.  The  state- 
ment and  act  of  Charles  could  only  affect  his  estate  and  his 
enjoyment  of  the  property,  and,  therefore,  the  tax  was  properly 
levied  against  him,  as,  upon  his  own  statement,  he  claimed 
under  the  will;  but  he  did  not  assume  to  bind  his  heirs,  nor 
would  they  be  estopped  by  his  statement,  had  he  so  assumed. 
No  tax  has  ever  been  assessed  against  them,  they  have  promptly 
asserted  their  rights,  and,  upon  the  first  opportunity  to  be 
heard,  have  elected  to  stand  upon  their  title  under  the  deed. 
They  have  been  guilty  of  no  laches,  and  no  valid  reason  has  been 
presented  for  estopping  them  from  so  doing." 

1  Vide  subdivision  6  of  §  2481  of  Code  of  Civil  Procedure,  and  cases  cited 
eub  Vacating  Decree. 

2  Matter  of  Merritt,  155  App.  Div.  228,  as  to  right  to  renounce  legacy, 
etiam  Matter  of  Wolfe,  89  App.  Div.  349,  affirmed,  without  opinion,  179 
N.  Y.  599.    As  to  assignment  of  legacy  vide  Matter  of  Cook,  187  N.  Y. 
253-258. 


1904. 

MATTER  OF  CHRISTOPHER  WOLFE,  179  N.  Y.  699,  af- 
firms, without  opinion,  89  App.  Div.  349. 

Testator  died  June  14,  1901,  bequeathing  to  his  executors, 
the  appellants,  the  sum  of  $20,000  absolutely.  The  residue 
of  his  estate  he  gave  to  the  executors  in  trust  for  his  surviving 
children  and  for  the  descendants  of  any  child  who  may  have 
died.  The  appellants,  some  eight  months  afterwards,  by  appro- 
priate instruments  in  writing,  duly  acknowledged,  renounced 


and  released  the  bequest  of  $20,000  in  ample  terms,  so  that  the 
money  bequeathed  to  them  should  fall  into  the  residuary  trust 
for  the  benefit  of  the  testator's  children  and  their  descendants. 
By  the  decree  appealed  from  the  surrogate  affirmed  an  appraisal 
by  which  the  legacy  in  question  was  taxed  at  five  per  cent  on 
the  theory  that  the  bequest  to  the  appellants  was  effective  for 
the  purposes  of  taxation,  instead  of  at  one  per  cent,  the  rate 
which  would  be  chargeable  as  against  the  residuary  shares. 
There  is  nothing  to  indicate  that  the  renunciation  by  the  appel- 
lants is  not  in  good  faith  or  that  it  has  been  made  for  the  purpose 
of  evading  any  provision  of  law  hi  relation  to  taxation. 

The  court  say,  page  350:  "The  decision  of  the  learned  surro- 
gate is  placed  upon  the  ground  that  under  the  law  the  legacy 
to  the  appellants  became  subject  to  the  tax  immediately  upon 
the  death  of  the  testator,  and  that  the  appellants  could  not 
defeat  the  right  of  the  State  to  that  tax  or  any  part  of  it  by  any 
subsequent  act  of  their  own.  The  force  of  this  view  might  be 
convincing  if  the  tax  was  imposed  upon  the  legacy,  but  it  is 
greatly  weakened  by  the  consideration  that  the  tax  is  not  im- 
posed upon  the  property  at  all,  although  payable  out  of  it,  but 
is  imposed  upon  the  succession  to,  or  transfer  of,  the  property. 
By  §  242  (now  243)  of  the  Tax  Laws  of  1896,  ch.  908  as  amd. 
by  Laws  of  1901,  ch.  173,  the  word  'transfer'  is  defined  to  include 
'the  passing  of  property  or  any  interest  therein  in  possession  or 
enjoyment,  present  or  future,  by  inheritance,  descent,  devise, 
bequest,  grant,  deed,  bargain,  sale  or  gift.'  The  transfer  tax, 
therefore,  which  is  the  basis  of  the  subject  of  this  controversy 
must  be  regarded  as  a  tax,  not  upon  the  money  which  is  the 
subject  of  the  legacy,  but  upon  the  passing  of  that  money  under 
the  will  in  possession  or  enjoyment.  Had  the  appellants  ac- 
cepted and  taken  the  legacy  no  question  could  have  arisen. 
Having  voluntarily  relinquished  it  so  that  it  lawfully  passes 
under  the  will  to  the  testator's  children  and  their  descendants, 
I  am  inclined  to  the  view  that  the  State  can  only  seize  that 
fraction  of  it  which  would  have  been  assessable  had  the  will 
originally  provided  for  such  a  devolution. 

"  The  Tax  Law  (supra)  nowhere  expressly  provides  that  a 
transfer  by  bequest,  deed  or  gift  which  is  refused  by  the  bene- 
ficiary shall  be  taxed  the  same  as  if  accepted.  On  the  theory  of 
the  decision  herein  in  the  court  below,  if  one  person  tendered  to 
another  a  deed  or  gift  to  take  effect  upon  the  death  of  the  donor, 
the  most  positive  refusal  of  the  donee  to  accept  the  benefaction 


179  N.  Y.  599  299 

and  the  consequent  rendering  abortive  of  the  entire  scheme 
would  not  avail  to  avoid  the  tax.  The  tax  would  be  imposed  in 
such  a  case,  not  upon  the  transfer,  but  upon  the  attempt  to 
transfer.  If  the  law  contemplated  that  the  tax  should  be  im- 
posed in  the  case  suggested,  there  is  no  obvious  reason  why  the 
purpose  should  not  have  been  manifested  hi  the  statute  by  ex- 
plicit expression.  To  construe  the  law  so  as  to  incorporate  such 
a  provision  into  it  is  violative  of  the  rule  of  construction  appli- 
cable, for  it  has  been  often  held  that  tj^e  Tax  Law  should  be 
construed  strictly  in  favor  of  the  citizen  and  against  the 
State.  *  *  * 

"  (Page  353.)  If  the  legatee  renounce  the  gift  and  refuse  to 
receive  it,  no  tax  can  be  collected  with  respect  to  him  be- 
cause there  has  been  no  transfer  to  him.  His  right  to  renounce 
the  privilege  of  accepting  the  donation  is  not  denied  or  for- 
bidden by  the  statute,  and  such  right  is  recognized  by  the 
authorities,  or  some  of  them,  which  I  have  cited.  On  his 
effective  renunciation  the  title  to  or  ownership  of  the  property 
of  the  gift  remains  in  the  estate  to  be  disposed  of  under  the 
terms  of  the  will,  and  the  succession  is  taxable  in  accordance 
with  the  nature  of  the  ultimate  devolution.  The  fact  that  the 
tax  is  payable  at  the  death  of  the  testator  controls  the  question 
of  interest,  but  certainly  controls  no  other  question  germane  to 
the  point  now  under  consideration.  *  *  * 

"  (Page  354.)  It  may  well  be  that  a  different  question  would 
be  presented  by  a  transfer  operating  under  the  laws  of  inherit- 
ance or  descent.  In  such  a  case  the  transfer  is  effective  by 
operation  of  law  and  calls  for  no  act  of  volition  on  the  part  of  the 
heir  or  next  of  kin.  *  *  *  The  law  as  it  is  would  seem  to 
require  that,  under  the  circumstances  of  this  case,  the  tax  should 
be  levied  upon  the  succession  or  transfer  as  it  will  actually 
take  place  upon  the  settlement  and  distribution  of  the  estate, 
and  not  as  was  designed  in  his  will  by  the  testator.1  No  authori- 
tative decision  is  cited  by  the  learned  counsel  for  the  respondent 
to  the  contrary,  although  some  loose  expressions  have  been 
found  in  opinions  which  may  give  color  to  that  view,  while 
the  logic  of  those  decisions  to  which  allusion  has  been  made  in 
this  opinion  certainly  justifies,  if  it  does  not  compel,  the  con- 
clusion which  I  have  reached." 

Vide  §§  226  and  243.  As  to  assignment  of  legacy  vide  Matter  of  Cook, 
187  N.  Y.  253-257.  As  to  renunciation  of  part  vide  Matter  of  Merritt, 
155  App.  Div.  228-232. 


300  THE    COURT   OF   APPEALS   DECISIONS 

1  Matter  of  White,  208  N.  Y.  64,  as  to  life  estates  where  life  tenant  dies 
before  probate  of  will;  vide  etiam  Matter  of  Jones,  28  Misc.  356-357, 
affirmed,  172  N.  Y.  575. 


1904. 

MATTER  OF  ROBERT  T.  CLINCH,  180  N.  Y.  300,  affirms  99 
App.  Div.  298,  which  affirmed  44  Misc.  190. 

Testator  died  a  resident  of  Paris,  April  12,  1899.  He  left  a 
will,  which  on  the  23d  of  February,  1900,  was  admitted  to  probate 
by  the  Surrogate's  Court  of  the  county  of  New  York,  and  letters 
testamentary  were,  on  the  thirtieth  of  April  following,  issued  to 
the  executor  therein  named;  all  the  property  which  he  owned  or 
in  which  he  had  any  interest  in  the  State  of  New  York  at  the 
time  of  his  death  was  such  as  came  to  him  under  the  will  of  his 
father,  Charles  J.  Clinch,  a  resident  of  Paris,  who  died  on  the 
22d  of  July,  1898,  at  Paris. 

The  father's  will  was  admitted  to  probate  in  the  Surrogate's 
Court  of  the  county  of  New  York,  and  letters  testamentary 
were  issued  to  the  executors  named  therein  on  the  6th  of  Sep- 
tember, 1898.  At  the  time  of  the  death  of  Robert  his  father's 
executors  had  not  accounted  for  or  made  any  distribution  of  his 
estate,  and  the  time  allowed  by  §  2726  of  the  Code  of  Civil 
Procedure  for  this  purpose  had  not  then  expired;  on  the  14th  of 
June,  1899,  they  did,  however,  make  such  distribution,  and  there 
was  then  set  apart  for  the  estate  of  Robert,  and  delivered  to 
his  executors,  certain  personal  property,  consisting  of  stocks  in 
New  York  corporations,  bonds,  etc.,  all  of  which  were  physi- 
cally present  in  the  State  of  New  York,  and  it  is  upon  the  trans- 
fer of  this  property  that  a  tax  has  been  imposed,  the  validity  of 
which  is  challenged  by  the  substituted  trustee  under  the  will 
of  Robert. 

The  court  say,  page  302,  "  It  is  true  that  in  the  case  of  Matter 
of  Phipps  (77  Hun,  325;  affirmed  on  opinion  below,  143  N.  Y. 
641)  Judge  Van  Brunt  said  that  the  right  to  a  legacy  given  by 
the  will  of  a  resident  of  this  State  to  a  non-resident  could  not  be 
considered  property  located  within  this  State."  The  court  then 
refers  to  the  four  cases  subsequently  decided,  Bronson,  Whiting, 
Morgan,  and  Houdayer,  150  N.  Y.  1;  id.  27;  id.  35;  id.  37,  and 
also  to  Blackstone's  case,  171  N.  Y.  682,  and  thereupon  held 
that  the  interest  of  Robert  T.  Clinch  in  his  father's  estate  was 
subject  to  the  inheritance  tax. 


181  N.  Y.  547  301 

The  court  further  say,  page  303:  "This  court  held  in  Matter 
of  Zefita,  Countess  De  Rohan-Chabot,  167  N.  Y.  280,  that  the 
transfer  tax  could  not  be  imposed  on  a  legacy  of  a  residuary 
estate  until  the  amount  of  that  estate  is  ascertained.  *  *  * 
In  the  case  at  bar  the  transfer  tax  was  imposed  after  the  amount 
of  the  residuary  estate  had  been  ascertained,  and  clearly  falls 
within  the  law  as  laid  down  in  the  case  cited." 

Vide  subdivision  2  of  §§220  and  243.  As  to  definition  of  "tangible" 
property  vide  Matter  of  Dusenberry,  2  State  Department  Reports,  501, 
opinion  quoted,  supra,  page  119. 

Matter  of  Lord,  111  App.  Div.  152,  affirmed,  without  opinion,  in  186 
N.  Y.  549,  sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn;  Matter  of 
Armstrong,  N.  Y.  Law  Journal,  February  20,  1912,  opinion  quoted,  post, 
page  733;  Matter  of  Clark,  id.,  February  9,  1912,  opinion  quoted,  post, 
page  754;  Matter  of  Page,  id.,  April  13, 1912,  opinion  quoted,  post,  page  610; 
Matter  of  Rosenbaum,  id.,  August  7,  1913,  opinion  quoted,  post,  page  730. 

Matter  of  Cans,  N.  Y.  Law  Journal,  April  13,  1912,  opinion  quoted, 
post,  page  862. 


1905. 

MATTER  OF  ABRAM  S.  HEWITT,  181  N.  Y.  647,  affirms, 
without  opinion,  98  App.  Div.  624,  which  affirms,  without 
opinion,  the  order  of  Surrogate  Thomas,  New  York  Law 
Journal,  June  18,  1894. 

Testator  died  a  resident  of  New  Jersey  on  January  18,  1903. 
At  the  time  of  his  death  he  was  the  owner  of  two  certificates  of 
deposit  in  two  New  York  trust  companies,  neither  of  which 
certificates  were,  at  the  time  of  testator's  death,  within  the  State 
of  New  York.  The  appraiser  reported  as  taxable  the  transfer 
of  the  certificates  of  deposit  and  also  the  interest  thereon  accrued 
to  the  date  of  death  of  decedent. 

Surrogate  Thomas  confirmed  the  appraiser's  report  and  in  his 
opinion  said:  "The  certificates  of  trust  companies  evidence 
deposits  of  money  and  not  loans.  They  are  not  negotiable 
instruments,  for  they  were  not  payable  to  the  order  of  the  depos- 
itor, and  it  was  expressly  stipulated  that  they  were  'assignable 
only  on  the  books  of  the  company.'  In  this  respect  they  differ 
from  the  documents  passed  upon  in  all  of  the  cases  cited  by  the 
appellant,  in  which  the  language  of  the  papers  in  question 
appear.  Savings  bank  deposits  by  a  non-resident  are  taxable 
(Matter  of  Romaine,  127  N.  Y.  80-89),  though  the  production 
of  the  passbook  is  always  made  a  condition  for  payment  to  the 


302  THE    COURT   OF   APPEALS   DECISIONS 

depositor.    These  deposits  were,  therefore,  properly  included  in 
the  appraisal." 

As  to  certificates  of  deposit  vide  Matter  of  Fearing,  138  App.  Div.  881- 
884,  affirmed,  200  N.  Y.  340.  Intangible  property  of  a  non-resident  not 
taxable  if  transferred  since  the  amendment  by  Laws  of  1911,  chapter  732, 
in  effect  July  21,  1911;  subdivision  2  of  §  220  and  §  243. 


1905. 

IN  THE  MATTER  OF  THE  TRANSFER  TAX  ON  THE 
ESTATE  CONVEYED  IN  TRUST  FOR  HIS  OWN 
BENEFIT  OF  HECTOR  CRAIG,  NOW  DECEASED, 
181  N.  Y.  551,  affirms,  on  opinion  below,  97  App.  Div.  289. 

Hector  Craig,  by  trust  deed  of  December  20,  1875,  trans- 
ferred all  his  property  of  every  kind  and  nature  to  certain 
trustees  in  contemplation  of  his  then  pending  marriage  with  the 
appellant  Mary  D.  Craig  (then  Mary  W.  Darrach),  and  for  the 
purpose  as  recited  in  the  deed  of  making  provision  for  her  in 
case  the  marriage  takes  place  and  she  survives  him  as  his  widow, 
and  of  otherwise  providing  for  the  management  and  disposition 
of  his  estate.  No  power  of  revocation  is  contained  in  the  deed. 
The  marriage  occurred  prior  to  1885.  By  its  terms  the  net 
income  of  all  the  property  was  made  payable  to  the  deceased 
during  his  lifetime,  and  at  his  death  the  principal  was  to  be  paid 
over  to  his  widow  and  the  issue  of  the  marriage  in  specified  pro- 
portions. Mr.  Craig  died  May  29,  1901,  leaving  the  appellants, 
his  widow  and  children;  and  it  is  undisputed  that  by  virtue  of 
the  trust  deed  and  of  certain  legal  proceedings  in  relation  to  it 
had  between  the  time  of  its  execution  and  the  grantor's  death, 
and  by  virtue  of  certain  releases  executed  by  other  beneficiaries 
named  in  the  deed  prior  to  May  9,  1885,  the  appellants  have 
become  entitled  to  the  entire  estate. 

The  appellants  contended  that  prior  to  the  passing  of  the 
first  law  taxing  inheritances  (Laws  of  1885,  chapter  483,  in 
effect  June  30,  1885),  (page  292),  "they  had  acquired  their 
rights  by  irrevocable  deed;  that  such  rights  whether  vested  or 
contingent  then  constituted  present  property  interests  hi  future 
estates  which  were  vested  in  the  sense  that  they  were  secured  to 
them  by  deed,  subject  only  to  contingencies  as  to  time  and 
survivorship;  that  incident  to  the  ownership  of  such  property 
was  the  absolute  right  to  its  acquisition  in  possession  and  enjoy- 
ment at  the  stipulated  time;  and  that  such  ultimate  right  of 


181  N.  Y.  551  303 

possession  and  enjoyment,  being  absolute  and  not  merely  priv- 
ileged, could  not  afterwards  be  taxed  by  the  State  because  of 
well-settled  principles  of  constitutional  law." 

The  court  say,  page  291 :  "It  seems  to  me  to  be  immaterial  to 
consider  whether  the  remainders  created  by  the  trust  instrument 
to  which  the  appellants  have  now  become  entitled  are  to  be 
regarded  as  vested  or  contingent,  or  whether  the  instrument  is 
to  be  regarded  as  conveying  such  remainders  as  gifts  inter  vivos 
or  gifts  causa  mortis.  The  point  presented  by  the  appeal  is  that 
the  right  as  a  property  right  to  take  the  gifts  when  the  time 
for  possession  and  beneficial  enjoyment  should  ultimately  arrive 
had  fully  accrued  at  the  date  of  the  marriage  and  the  birth  of 
the  children  free  from  any  existing  tax  upon  the  transfer  re- 
garded either  as  a  transfer  then  made  or  contemplated  in  the 
future,  and  that  subsequent  legislation  imposing  such  a  tax 
must  be  deemed  unconstitutional  as  in  effect  the  taking  of 
private  property  for  public  use  without  compensation  or  as 
impairing  the  obligation  of  a  contract.  *  *  * 

"(Page  293.)  In  both  the  act  of  1892  and  the  existing  act  it  is 
provided  that  transfers  by  deed  or  gift  made  in  contemplation  of 
the  death  of  the  grantor  or  donor,  or  intended  to  take  effect,  in 
possession  or  enjoyment,  at  or  after  his  death,  shall  be  taxed 
when  the  grantee  or  donee  becomes  beneficially  entitled  in 
possession  or  expectancy  to  the  property  given  by  the  transfer, 
whether  made  before  or  after  the  passage  of  the  act.  (Laws  of 
1892,  chap.  399,  §  1,  subd.  3;  Laws  of  1896,  chap.  908,  §  220, 
subd.  3,  renumbered  subds.  3,  4,  and  amd.  by  Laws  of  1897, 
chap.  284.)  *  *  * 

"(Page  295.)  T^he  deed  in  this  instance  was  made,  not  in 
contemplation  of  death,  but  of  marriage,  and  was  designed  to 
make  an  effective  provision  in  prcesenti  for  the  prospective 
wife  and  the  possible  offspring.  No  reservation  being  made  of 
the  power  of  revocation  it  became  operative  and  effective  as  a 
grant  upon  execution  and  delivery  wholly  irrespective  of  the 
time  when  possession  was  to  be  given  of  the  estate  conveyed,  to 
the  sanre  extent  and  in  the  same  sense  and  degree  as  a  devise 
of  a  remainder  becomes  operative  and  effective  upon  the  death 
of  a  testator  during  the  existence  of  an  intermediate  estate, 
and  the  logic  which  precludes  legislative  impairment  in  the  one 
case  is  equally  imperative  in  the  other.  The  difference  between 
rights  and  interests  conferred  or  created  by  the  execution  of  a 
will  and  those  conferred  or  created  by  the  execution  and  delivery 


304  THE   COURT   OF   APPEALS   DECISIONS 

of  a  deed  is  inherent.  The  will  may  be  canceled  and  revoked  or 
other  testamentary  disposition  made  without  in  general  impair- 
ing any  property  rights  of  the  devisees.  But  whatever  rights 
are  conferred  or  created  by  deed  are  conferred  or  created  gener- 
ally when  the  deed  becomes  operative  and  effective  as  such, 
and  if  conferred  or  created  without  the  power  of  revocation 
cannot  be  afterwards  affected  or  destroyed  by  either  the  grantor 
or  the  law. 

"  I  do  not  lose  sight  of  the  fact  that  the  transfer  tax  is  levied, 
not  upon  the  property  affected,  but  upon  the  right  of  succession. 
The  underlying  principle  which  supports  the  tax  is  that  such 
right  is  not  a  natural  one  but  is  in  fact  a  privilege  only,  and  that 
the  authority  conferring  the  privilege  may  impose  conditions 
upon  its  exercise.  But  when  the  privilege  has  ripened  into  a 
right  it  is  too  late  to  impose  conditions  of  the  character  in  ques- 
tion, and  when  the  right  is  conferred  by  a  lawfully  executed 
grant  or  contract  it  is  property  and  not  a  privilege,  and  as  such 
is  protected  from  legislative  encroachment  by  constitutional 
guaranties." 

The  order  assessing  tax  was  reversed  and  the  proceedings  dis- 
missed. 

Vide  subdivision  4  of  §  220.  Matter  of  Kidd,  188  N.  Y.  274-279;  Matter 
of  Demers,  41  Misc.  470;  Matter  of  Smith,  150  App.  Div.  805-809;  Matter 
of  Haight,  76  Misc.  380-382,  affirmed,  152  App.  Div.  228;  Matter  of  Hit- 
chins,  43  Misc.  485,  affirmed,  181  N.  Y.  553;  Matter  of  Hawes,  N.  Y.  Law 
Journal,  April  8,  1913,  opinion  quoted  sub  Trust  Deed,  page  874. 


1905. 

MATTER  OF  JOHN  HITCHINS,  181  N.  Y.  553,  affirms, 
without  opinion,  101  App.  Div.  612,  which  affirms,  with- 
out opinion,  43  Misc.  485. 

Testator  died  October  1,  1884,  leaving  to  his  widow  a  life 
estate  with  remainder  over  on  her  death  or  remarriage.  Widow 
therefore  died  unmarried  in  1902.  The  surrogate  said,  page  490 : 
"  The  Comptroller  admits  that  if  this  will  created  legacies  which 
vested  at  death  of  testator,  such  legacies  are  not  taxable,  al- 
though they  only  now  come  into  the  actual  possession  and  enjoy- 
ment of  the  beneficiaries.  But  he  earnestly  contends  that  the 
legacies  did  not  so  vest;  that  they  constitute  future  gifts  which 
were  not  transferred  until  the  death  of  the  life  tenant  in 
1902.  *  *  * 


181  N.  Y.  560  305 

"(Page  492.)  We,  therefore,  find  that  the  words  'go  to  and 
belong  to'  as  used  in  this  will,  should  not  be  construed  to  mean 
'  pay  and  divide '  and  that  the  rule  of  construction  claimed  by  the 
Comptroller  to  be  applicable  to  this  will  must  yield  to  the  mani- 
fest intention,  both  expressed  and  implied,  of  making  present 
gifts,  which  vested  upon  his  death.  *  *  * 

"(Page  493.)  Where  a  vested  though  defeasible  interest  in  re- 
mainder passes  under  a  will  to  a  remainderman  on  the  testator's 
death,  though  the  possession  does  not  pass  until  the  death  of 
the  life  tenant,  the  transfer  or  succession  is  referred  to  the  time 
of  the  death  of  the  testator,  and  if  that  occurred  prior  to  the 
enactment  of  the  act  taxing  transfers  of  property,  the  remainder 
is  not  taxable.  Matter  of  Seaman,  147  N.  Y.  69;  Matter  of 
Stewart,  131  id.  274;  Matter  of  Curtis,  142  id.  219;  Matter  of 
Langdon,  153  id.  6." 

Vide  Matter  of  Smith,  150  App.  Div.  805. 


1905. 

MATTER  OF  EDWARD  M.  CAMERON,  181  N.  Y.  660, 
affirms,  without  opinion,  97  App.  Div.  436. 

The  court  say,  page  437:  "We  think  that  the  Surrogate  of 
Suffolk  county,  upon  the  petition  and  proofs  presented  to  him 
in  this  proceeding,  was  justified  in  setting  aside  the  original 
order  imposing  a  transfer  tax  upon  the  moneys  which  the  execu- 
tor had  received  from  the  estate  of  Richard  Arnold,  inasmuch  as 
it  appeared  without  contradiction  that  such  moneys  were  the 
proceeds  of  an  interest  of  the  decedent  in  real  estate,  and  were, 
therefore,  not  subject  to  any  tax  under  the  laws  of  this  State  in 
relation  to  taxable  transfers  of  property.1 

"  It  is  contended  in  behalf  of  the  Comptroller  that  the  Surro- 
gate, instead  of  vacating  the  prior  order,  should  have  remitted 
the  whole  matter  to  the  official  appraiser  to  make  the  computa- 
tion upon  which  the  taxability  or  non-taxability  of  the  property 
depends.  His  position  in  this  respect  might  be  correct  if  there 
was  any  proof  whatever  in  opposition  to  that  presented  by  the 
executor  in  his  moving  papers.  No  evidence  was  offered  before 
the  surrogate,  however,  to  controvert  any  of  the  facts  upon 
which  the  executor  based  the  present  application. 

"  It  is  true  that  the  order  now  under  review  is  expressly 
based  upon  evidence  stated  to  have  been  discovered  since  the 
20 


306  THE    COURT  OF   APPEALS   DECISIONS 

entry  of  the  original  order,  and  ordinarily  where  a  determination 
is  set  aside  on  the  ground  of  newly-discovered  evidence,  the  order 
setting  it  aside  should  not  contain  an  adjudication  the  other  way, 
but  should  provide  for  a  new  hearing  upon  which  both  parties 
may  be  heard.  Here,  however,  it  is  plain  enough  that  the  State 
Comptroller  has  no  means  of  controverting  the  facts  relied  upon 
by  the  executor  to  establish  the  exemption  of  the  property  hi 
question,  and  under  these  circumstances  we  think  it  would 
have  been  an  idle  ceremony  for  the  surrogate  to  send  the  matter 
back  to  the  official  appraiser,  particularly  as  under  §  232  (now 
§  231)  of  the  Tax  Law,  he  is  expressly  empowered  to  determine 
the  cash  value  of  an  estate  and  the  amount  of  tax  to  which  the 
same  is  liable,  without  appointing  an  appraiser.  If  he  could 
have  done  it  before  the  original  order  there  is  no  reason  why  he 
cannot  do  it  now. 

"On  the  other  hand,  we  do  not  think  we  ought  to  interfere 
with  the  surrogate's  refusal  to  insert  hi  the  order  a  direction  to 
the  State  Comptroller  to  refund  the  amount  of  the  tax.  Such 
provisions  are  common  in  orders  of  this  kind,  and  orders  con- 
taining them  frequently  have  been  affirmed  in  this  court  and  the 
Court  of  Appeals.  (Matter  of  Silliman,  79  App.  Div.  98;  af- 
firmed, 175  N.  Y.  513;  Matter  of  Scrimgeour,  80  App.  Div.  388; 
affirmed,  175  N.  Y.  507.)  A  direction  to  the  State  Comptroller 
to  refund  seems  proper  enough.  It  affords  no  real  ground  of  ob- 
jection on  the  part  of  that  officer,  inasmuch  as  it  gives  expressed 
judicial  sanction  to  his  repayment  of  the  tax.  It  is  not  at  all 
essential,  however,  to  the  preservation  or  enforcement  of  the 
rights  of  the  party  entitled  to  such  repayment  because  the  stat- 
ute itself  commands  the  State  Comptroller  in  cases  of  this  kind 
to  direct  and  allow  the  treasurer  of  the  county  2  or  the  comp- 
troller of  the  city  of  New  York  to  refund  to  the  persons  by  whom 
the  tax  has  been  paid,  the  amount  of  any  moneys  paid  or  de- 
posited on  account  of  such  tax  in  excess  of  the  amount  of  tax 
which  ought  to  have  been  exacted." 

Vide  §§  225  and  231 ;  and  cases  cited  sub  Vacating  Decree. 

1  Transfers  of  real  property  to  "lineals"  first  made  taxable  by  Laws  of 
1903,  chapter  41,  in  effect  March  16,  1903.    Transfers  of  real  property  to 
collaterals  have  been  taxable  since  original  act  of  1885. 

2  As  to  form  of  warrant  issued  by  state  comptroller  to  county  treasurer 
vide  post,  page  764. 


182  N.  Y.  238  307 

1905. 

MATTER  OF  LINDA  DOWS  COOKSEY,  182  N.  Y.  92. 

Testatrix  died  March  7,  1903.  By  the  will  of  her  father  who 
died  in  1890,  she  was  given  a  life  estate  in  certain  property  with 
a  special  power  in  trust  to  designate  the  manner  and  terms 
upon  which  her  children  or  the  issue  of  such  children  should  take 
the  remainder  in  said  property.  The  will  of  her  father  further 
provided  that  if  she  died  intestate  then  the  remainder  should  go 
to  the  children  as  set  forth  hi  his  will. 

The  court  say,  page  98:  "Under  the  will  of  Mrs.  Cooksey,  in 
exercising  the  power  of  appointment  she  made  material  changes 
with  reference  to  paying  over  the  remainder  to  her  children  from 
that  incorporated  in  the  will  of  her  father.  *  *  *  It  appears 
to  us,  therefore,  that  there  was  a  necessity  for  exercising  the 
power,  that  it  cannot  be  treated  as  a  nullity,  and  that,  therefore, 
the  transfer  tax  under  the  statute  was  properly  assessed." 

Vide  subdivision  6  of  §  220.  Matter  of  Dows,  167  N.  Y.  227,  sustained 
sub  nom.  Orr  v.  Oilman,  183  U.  S.  278;  Matter  of  Lansing,  182  N.  Y.  238; 
Matter  of  Spencer,  119  App.  Div.  883-884,  affirmed,  appeal  dismissed,  190 
N.  Y.  517;  Matter  of  Ripley,  192  N.  Y.  536;  People  ex  rel.  Ripley  v.  Wil- 
liams, 69  Misc.  402;  Matter  of  Lewis,  60  Misc.  643-644,  reversed  in  194 
N.  Y.  550;  Matter  of  Haggerty,  128  App.  Div.  479-483,  affirmed,  without 
opinion,  194  N.  Y.  550;  Matter  of  Hull,  111  App.Div.  322,  affirmed,  without 
opinion,  186  N.  Y.  586;  Matter  of  Buckingham,  106  App.  Div.  13;  Matter 
of  Lowndes,  60  Misc.  506-507;  Matter  of  Warren,  62  id.  444;  Matter  of 
Haight,  152  App.  Div.  228-231. 


1905. 

MATTER  OF  JANET  S.  LANSING,  182  N.  Y.  238. 

Testatrix  died  October  13,  1904.  The  court  say,  page  242: 
"The  property  in  question  belonged  to  Thomas  Suffern  when 
he  died  in  1869,  and  there  was  then  no  statute  in  force  which 
imposed  an  inheritance  or  transfer  tax. 

"Subsequent  legislation  could  not  authorize  a  tax  upon  the 
transfer  of  property  effected  solely  by  means  of  his  will,  with  no 
aid  from  the  power  of  appointment.  (Matter  of  Pell,  171  N.  Y. 
48.)  The  property  under  consideration  never  belonged  to  the 
daughter,  Mrs.  Lansing,  although  she  had  the  income  there- 
from during  her  life  through  a  trust  created  for  her  benefit 
by  her  father's  will.  By  the  same  sentence  which  created 
the  trust  during  her  life,  the  property  was  given  after  her 


308  THE    COURT   OF   APPEALS   DECISIONS 

death  to  the  granddaughter,  Mrs.  McVickar,  subject  to  the 
exercise  of  the  power  of  appointment.  That  power  was  limited 
to  two  classes  of  persons,  consisting  of  the  heirs  at  law  and  the 
collateral  relatives  of  Mrs.  Lansing.  Mrs.  McVickar  was  her 
sole  heir  at  law  and  the  power  of  appointment  as  formally  exer- 
cised, gave  all  the  property  to  her  the  same  as  her  grandfather 
had  given  to  her  more  than  thirty  years  before. 

"  In  other  words,  the  attempt  to  exercise  the  power  neither 
increased  nor  diminished  the  estate  of  Mrs.  McVickar  and  did 
not  affect  in  any  degree  the  value  of  her  grandfather's  gift.  It 
did  not  effectively  transfer  any  property  whatever,  for  she 
took  from  her  grandfather  and  nothing  was  added  to  or  taken 
away  from  the  gift  by  the  exercise  of  the  power  through  the  will 
of  her  mother.  The  execution  of  the  power  left  the  title  where  it 
was  before,  and  the  result  is  the  same  as  if  there  had  been  no 
power  to  exercise.  *  *  * 

'  (Page  247.)  We  pass  without  serious  discussion  that  part  of 
the  statute  which  provides,  in  substance,  that  the  failure  or 
omission  to  exercise  a  power  of  appointment  subjects  the  prop- 
erty to  a  transfer  tax  in  the  same  manner  as  if  the  donee  of  the 
power  had  owned  the  property  and  had  devised  it  by  will. 
(L.  1897,  ch.  284,  §  220,  subd.  5,  now  subd.  6.)  Where  there  is 
no  transfer  there  is  no  tax  and  a  transfer  made  before  the  pas- 
sage of  the  act  relating  to  taxable  transfers  is  not  affected  by  it, 
because  as  we  held  in  the  Pell  case,  such  an  act  imposes  no  direct 
tax  and  is  unconstitutional  since  it  diminishes  the  value  of  vested 
estates,  impairs  the  obligations  of  contracts,  and  takes  private 
property  for  public  use  without  compensation.  (Matter  of  Pell, 
171  N.  Y.  48;  Matter  of  Delano,  176  N.  Y.  486,  495.) 1  *  *  * 

"(Page  248.)  It  is  not  at  all  necessary  to  determine  whether 
the  remainder  which  Mrs.  McVickar  took  under  her  grand- 
father's will  was  vested  or  contingent.  If  we  assume  that 
the  remainder  was  contingent,  nevertheless  it  was  acquired 
by  Mrs.  McVickar  under  her  grandfather's  will  at  the  instant 
of  his  death.  It  then  became  a  property  right  in  her  which 
was  just  as  sacred  and  just  as  immune  from  legislative  attack  as 
any  other  property  right.  *  *  *  It  is  true  that  Mrs.  Mc- 
Vickar's  estate  was  subject  to  be  defeated  by  her  death  before 
her  mother  or  by  diminution  if  her  mother  left  other  children, 
but  her  right  to  the  estate  if  she  survived  her  mother  was 
indefeasible.  I  am  at  a  loss  to  see  what  bearing  the  question  of  a 
remainder  being  vested  or  contingent  has  to  do  with  the  liabil- 


182  N.  Y.  524  309 

ity  to  the  transfer  tax  when  that  remainder  was  created  prior 
to  the  imposition  of  any  transfer  tax.  *  *  *  Now,  suppose 
that  the  state  at  the  time  it  imposed  the  inheritance  tax  instead 
of  enacting  that  statute  had  forbidden  the  making  of  wills  and 
succession  in  case  of  intestacy,  itself  taking  all  the  property 
that  a  decedent  might  leave  at  the  time  of  his  death,  such  a 
statute  could  have  no  possible  effect  on  Mrs.  McVickar's  rights, 
for  those  rights  had  been  acquired  long  before.  Therefore,  what 
privilege  did  she  get  at  that  time  from  the  state  for  which  it  can 
charge  or  impose  a  tax?  The  ground  on  which  the  Pell  case 
proceeded  was  that  a  transfer  tax  could  not  be  imposed  on  the 
acquisition  of  property  where  the  acquisition  had  taken  place 
prior  to  the  enactment  of  the  taxing  statute.  The  ground  on 
which  the  Dows  case  proceeded  was  that  the  legatees  took  under 
a  power  of  appointment  in  a  will  made  subsequent  to  the  enact- 
ment of  the  Inheritance  Tax  Law,  and  that  the  state  could 
impose  a  tax  on  property  passing  under  that  will." 
Held,  that  there  should  be  no  tax. 

1  The  portion  of  statute  referred  to  omitted  by  the  amendment  of  chap- 
ter 732,  Laws  of  1911,  in  effect  July  21,  1911:  subdivision  6  of  §  220.  Vide 
etiam  Matter  of  Dows,  167  N.  Y.  227-232. 

Vide  Matter  of  Backhouse,  110  App.  Div.  737,  affirmed,  without  opinion, 
185  N.  Y.  544;  Matter  of  Hull,  111  App.  Div.  322-325,  affirmed,  without 
opinion,  186  N.  Y.  586;  Matter  of  Kidd,  188  N.  Y.  274-279;  Matter  of 
Spencer,  119  App.  Div.  883-884,  appeal  dismissed,  190  N.  Y.  517;  Matter  of 
Lewis,  60  Misc.  643-644,  reversed,  194  N.  Y.  550;  Matter  of  Chapman, 
133  App.  Div.  337-339,  appeal  dismissed,  without  opinion,  196  N.  Y.  561; 
Matter  of  Haggerty,  128  App.  Div.  479-483,  affirmed,  without  opinion, 
194  N.  Y.  550;  Matter  of  Smith,  150  App.  Div.  805;  Matter  of  Warren, 
62  Misc.  411-417. 

As  to  exercise  of  power  of  appointment  over  portion  of  property  and  not 
as  to  the  whofe  vide  Matter  of  Ripley,  122  App.  Div.  419,  affirmed  per 
curiam,  192  N.  Y.  536;  People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402; 
Matter  of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion  quoted 
sub  Power  of  Appointment,  page  772. 


1905. 

MATTER  OF  MARCUS  DALY,  182  N.  Y.  624,  affirms,  with- 
out opinion,  100  App.  Div.  373. 

Testator  died  a  resident  of  Montana,  November  12,  1900. 
He  left  money  on  margin  deposit  with  his  brokers  hi  New  York 
and  also  money  was  owed  to  him  by  William  G.  Rockefeller  of 
New  York.  The  court  discuss  at  length  the  question  as  to  the 


310  THE   COURT  OF  APPEALS  DECISIONS 

legal  status  of  the  account  and  debt,  and  in  conclusion  say, 
page  381:  "The  able  and  lucid  opinion  written  by  Mr.  Justice 
Holmes,  in  delivering  the  opinion  of  the  court  in  the  Blackstone 
case,  188  U.  S.  189,  leaves  nothing  to  be  added  to  the  deter- 
mination as  to  the  situs  of  the  debt,  and  it  is  evident  to  a  demon- 
stration that  the  fiction  of  law  which  ordinarily  fixes  such 
situs  should  be  made  to  yield. 

"In  the  construction  of  State  statutes  the  Supreme  Court  of 
the  United  States  is  required  to  adopt  the  construction  placed 
upon  them  by  the  State  courts,  and  the  latter  construction  by 
the  Court  of  Appeals  of  this  State  is  binding  not  alone  upon  the 
Supreme  Court  of  the  United  States,  but  also  upon  tribunals 
inferior  thereto  within  the  State.  We  think  there  is  no  infringe- 
ment of  this  rule  in  holding  that  for  purposes  of  taxation  the 
situs  of  the  debt  is  at  the  place  of  residence  of  the  debtor,  for  the 
reason  that  hi  the  Blackstone  case  the  construction  of  this 
statute  was  before  both  courts,  both  have  agreed  upon  the 
policy  of  the  State  respecting  property  which  could  properly 
be  made  the  subject  of  taxation,  and  both  have  announced  the 
policy  of  the  State  respecting  such  subject.  Under  such  circum- 
stances the  reasoning  of  the  Supreme  Court  of  the  United  States 
becomes  controlling  and  proceeds  somewhat  beyond  a  deter- 
mination that  the  State  has  the  constitutional  right  to  tax  debts. 
It  not  only  determined  that  question  affirmatively,  but  it  also 
determined  that  under  the  statute  as  it  then  existed  debts  were 
taxable.  In  the  Bronson  Case,  150  N.  Y.  1,  it  was  held  that 
they  were  not  so  taxable,  because  they  were  not  property  within 
the  State.  When  that  doctrine  was  exploded  by  showing  that 
the  rule  of  construction  required  that  fiction  should  yield  to 
fact,  it  carried  with  it  the  policy  of  the  State  as  announced 
by  the  Court  of  Appeals  and  under  such  rule  it  became  the  con- 
struction of  the  statute. 

"  The  continuous  tendency  of  the  courts  of  this  State  has  been 
to  embrace  within  the  Transfer  Tax  Law  directly  or  indirectly 
all  property  of  every  species  found  herein  upon  the  death  of  the 
decedent.  That  policy  and  rule  has  never  been  departed  from 
or  infringed  upon,  save  by  the  application  of  what  the  court 
regarded  as  an  inexorable  rule  of  law,  which  upon  thorough 
examination  turns  out  to  be  a  fiction.  When  that  fact  appeared, 
and  the  statute  is  the  subject  of  construction  wherein  it  is  made 
to  appear,  it  becomes  controlling  not  only  as  an  adjudication  of 
the  highest  court  of  the  land,  but  also  as  an  adjudication  of  the 


182  N.  Y.  557  311 

construction  adopted  by  the  courts  of  this  State.  It  is  not  so 
much  a  difference  of  construction  as  it  is  of  reason  producing  it, 
and  when  the  reason  for  a  given  construction  is  shown  to  fail, 
and  the  policy  of  the  statute  is  clear,  the  adjudication  of  the 
United  States  court  becomes  supreme  and  is  made  the  law  of 
the  land  with  respect  to  the  particular  questions  involved. 
Under  these  circumstances,  we  think  its  rule  must  obtain, 
and  so  obtaining  it  necessarily  follows  that  debts  due  within  this 
State  from  solvent  debtors,  which  are  converted  into  money 
herein,  and  must  of  necessity  be  enforced  hi  this  jurisdiction, 
or  not  at  all,  become  property  within  the  meaning  of  the  Trans- 
fer Tax  Law,  and  as  such  are  taxable."  1 

Matter  of  Gordon,  186  N.  Y.  471-477;  Matter  of  Page,  N.  Y.  Law  Jour- 
nal, April  13,  1912,  opinion  quoted  sub  Chose  in  Action. 

1  Money,  deposits  in  bank,  stock,  bonds,  notes,  credits  or  evidences  of 
an  interest  in  property  and  evidences  of  debt  held  by  a  non-resident  dece- 
dent are  not  subject  to  tax  if  transferred  since  the  amendment  by  Laws  of 
1911,  chapter  732,  in  effect  July  21,  1911;  subdivision  2  of  §  220  and  §  243. 
For  definition  of  intangible  property  vide  Matter  of  Dusenbery,  2  State 
Department  Reports,  501,  opinion  quoted,  page  119. 


1905. 

MATTER  OF  ALBERT  TILT,  182  N.  Y.  557,  affirms,  without 
opinion,  107  App.  Div.  616,  which  affirms,  without  opinion, 
order  of  surrogate;  reversed  in  207  U.  S.  43,  sub  nom. 
Tilt  v.  Kelsey. 

Testator  died  May  2,  1900.  The  United  States  Supreme 
Court  say,  page  46:  "In  the  disposition  of  this  case  we  are 
somewhat  embarrassed  by  our  ignorance  of  the  reasons  which 
controlled  the  decision  of  the  highest  court  of  the  State.  The 
opinion  of  the  surrogate  was  very  brief.  His  judgment  was 
affirmed  upon  appeal  successively  by  the  Supreme  Court  and  the 
Court  of  Appeals — in  each  court  without  an  opinion  and  with 
two  judges  dissenting." 

The  testator  at  the  time  of  his  death,  and  for  many  years 
prior  thereto,  was  a  silk  manufacturer  hi  Paterson.  Until 
1888  he  was  a  resident  and  citizen  of  Paterson.  In  that  year  he 
removed  to  New  York  City,  became  a  resident  and  citizen  of 
New  York,  and  remained  such  until  some  time  in  the  year  1899. 
For  many  years  he  had  owned  a  house  in  New  York  City,  where 
he  lived  during  the  greater  part  of  the  year,  and  another  house 


312  THE    COURT   OF  APPEALS   DECISIONS 

in  Roxbury,  New  Jersey,  where  he  lived  during  the  summer  and 
early  autumn.  His  executors  contended  that  in  the  last  year 
of  his  life  he  changed  his  domicil  from  New  York  City  to  Rox- 
bury and  that  at  the  time  of  his  death  he  was  domiciled  in  New 
Jersey.  On  the  other  hand,  it  was  contended  by  the  Comptroller 
of  New  York  that  his  domicil  continued  until  his  death  to  be  in 
New  York.  Upon  this  question  the  evidence  was  conflicting. 

His  will  was  admitted  to  probate  in  New  Jersey.  The  court 
say,  page  47:  "An  order  was  made  fixing  a  time  within  which 
creditors  must  prove  claims  against  the  estate.  On  the  expira- 
tion of  this  time  a  further  order  was  made,  that  all  creditors  who 
had  neglected  to  bring  in  their  claims  and  demands  should 
'  be  forever  barred  from  their  action  therefor  against  the  execu- 
tors of  said  deceased.'  Succession  taxes,  imposed  by  the  law 
of  New  Jersey  and  the  law  of  the  United  States,  and  all  debts, 
were  paid.  The  executors  presented  their  accounts  to  the 
Orphans'  Court  of  the  county,  and  that  court,  acting  within  its 
jurisdiction,  on  June  20, 1901,  allowed  the  accounts  and  directed 
the  distribution  of  the  estate,  according  to  the  terms  of  the  will. 
The  executors  made  the  distribution  in  conformity  with  the 
court's  order,  thereby  parting  with  all  the  property  of  the  testa- 
tor which  had  been  hi  their  hands.  After  the  distribution  had 
been  accomplished  the  State  of  New  York  for  the  first  time 
made  known  its  claim  for  a  transfer  tax." 

The  New  York  transfer  tax  appraiser  was  appointed  on 
August  16,  1901,  and  filed  his  report  March  6,  1903,  wherein  he 
found  that  testator  was  a  resident  of  New  York  City  at  the  time 
of  his  death.  Upon  appeal  to  the  surrogate  it  was  agreed  by 
counsel  that  the  surrogate  should  determine  on  affidavits 
whether  or  not  Albert  Tilt  was  a  resident  of  New  York  at  the 
time  of  his  death.  The  surrogate  found  as  a  fact  that  the  dece- 
dent was  a  resident  at  the  time  of  his  death. 

The  court  further  say,  page  50:  "It  is  contended  that  no 
Federal  question  was  properly  and  seasonably  raised  in  the 
state  courts.  We  think,  however,  that  a  right  under  the  Con- 
stitution of  the  United  States  was  specially  set  up  and  claimed 
by  the  executors,  as  required  by  §  709  of  the  Revised  Statutes, 
and  denied  by  the  highest  court  of  the  State,  and  that  therefore 
we  have  authority  to  re-examine  the  decision.  It  appears  clearly 
in  the  paper  entitled  'Appeal  to  the  surrogate'  that  the  executors 
relied  upon  the  judicial  proceedings  in  New  Jersey  as  a  defense 
to  the  assessment  of  the  New  York  tax.  They  '  specially  set  up 


182  N.  Y.  557  313 

and  claimed'  a  right  under  those  proceedings,  though  it  was  not 
in  terms  stated  to  be  a  right  claimed  under  the  Constitution. 
This,  in  the  case  of  a  judgment  of  the  court  of  another  State, 
has  been  held  to  be  a  sufficient  compliance  with  the  statute. 
Great  Western  Telegraph  Co.  v.  Purdy,  162  U.  S.  329;  Bell  v. 
Bell,  181  U.  S.  175;  Andrews  v.  Andrews,  188  U.  S.  14,  and  see 
the  remark  of  the  Chief  Justice  in  Mutual  Life  Insurance  Com- 
pany v.  McGrew,  188  U.  S.  291,  311.  Moreover,  while  the  sur- 
rogate still  had  the  appeal  under  consideration  and  undecided, 
requests  in  writing  were  made  to  him  which  clearly  and  specif- 
ically set  up  the  claim  that  the  full  faith  and  credit  due,  under 
the  Constitution,  to  the  judicial  proceedings  of  the  State  of 
New  Jersey  forbade  the  assessment  of  the  tax.  These  requests 
were  entertained  and  the  claim  denied  by  the  surrogate  and 
an  exception  taken.  Upon  the  record  thus  made  an  appeal  was 
taken,  and  in  the  disposition  of  the  appeal  the  Federal  ques- 
tion was  necessarily  passed  upon  by  the  highest  court  of  the 
State,  whose  decision,  therefore,  we  may  re-examine. 

"That  re-examination,  however,  must  be  confined  to  the 
single  question  whether  by  the  assessment  of  the  tax  full  faith 
and  credit  has  been  denied  to  the  judicial  proceeding  of  the 
State  of  New  Jersey  in  violation  of  Article  IV,  §  1,  of  the 
Constitution. 

"  In  the  consideration  of  this  question,  the  first  inquiry  which 
presents  itself  is  whether  the  adjudication  of  the  New  Jersey 
court,  that  Tilt  was  at  the  time  of  his  death  a  resident  of  New 
Jersey,  was  conclusive  upon  the  State  of  New  York,  a  stranger 
to  the  proceedings.  If  it  was  that  is  the  end  of  the  case,  because 
then  New  York  could  not  take  the  first  step  necessary  to  bring 
the  estate  within  the  provision  of  the  tax  law  of  that  State. 
But  upon  principle  and  authority  that  adjudication,  though 
essential  to  the  assumption  of  jurisdiction  to  grant  letters 
testamentary,  was  neither  conclusive  on  the  question  of  domicil, 
nor  even  evidence  of  it  in  a  collateral  proceeding.  *  *  * 
Full  faith  and  credit  due  to  the  proceedings  of  the  New  Jersey 
court  do  not  require  that  the  courts  of  New  York  shall  be  bound 
by  its  adjudication  on  the  question  of  domicil.  On  the  contrary, 
it  is  open  to  the  courts  of  any  State  in  the  trial  of  a  collateral 
issue  to  determine  upon  the  evidence  produced  the  true  domicil 
of  the  deceased. 

"  But  assuming  that  the  New  York  court  had  the  right  to  deter- 
mine, and  determined  rightly,  the  domicil  of  the  deceased,  what 


314  THE  COURT  OF  APPEALS  DECISIONS 

then?  The  grievance  here  is  not  the  finding  that  Mr.  Tilt  died  a 
resident  of  New  York.  It  is  the  assessment,  based  upon  that 
finding,  of  a  transfer  tax  upon  the  legacies  contained  in  his  will. 
The  real  question  in  the  case  is  whether  the  assessment  of  that 
tax  by  the  State  of  New  York  is  consistent  with  the  full  faith  and 
credit  required  by  the  Constitution  to  be  given  to  the  judicial 
proceedings  of  another  State.  After  the  will  had  been  allowed 
and  letters  testamentary  had  been  issued  by  the  New  Jersey 
surrogate,  the  executors  named  in  the  will  took  possession  of 
all  the  personal  property  of  the  testator  (the  real  property  not 
being  concerned  in  this  litigation)  and  began  to  administer  it  in 
accordance  with  the  terms  of  the  will  and  under  the  direction 
of  the  court.  *  *  *  A  limit  of  time  was  fixed  for  the  presen- 
tation of  claims  against  the  estate,  at  the  expiration  of  which  it 
was  decreed  that  all  creditors  who  had  neglected  to  bring  in 
their  demands  should  be  barred  from  any  action  thereon  against 
the  executors.  *  *  *  For  the  purpose  of  enabling  the  exec- 
utors to  distribute  the  estate  with  safety  to  themselves,  in 
accordance  with  a  common  practice  in  the  settlement  of  the 
estate  of  deceased  persons,  and  under  authority  conferred  by  the 
laws  of  the  State,  the  court,  prior  to  the  distribution,  had  de- 
creed that  all  those  who  had  neglected  to  bring  in  their  claims 
should  be  'forever  barred  from  their  action  therefor  against  the 
executors  of  the  deceased.'  Upon  these  facts  does  the  assessment 
of  this  transfer  tax  by  the  State  of  New  York,  by  whose  laws  the 
tax  thus  asseseed  is  made  a  lien  on  the  property  transferred  and 
a  personal  obligation  of  the  transferee  and  the  executors  (§  222, 
now  §  224,  ch.  908,  Laws  of  1896),  give  the  full  faith  and  credit 
to  which  these  judicial  proceedings  are  entitled?  The  answer  to 
this  question  depends  upon  the  nature  of  the  proceedings  and 
their  effect  upon  the  rights  of  those  persons  who  were  not  parties 
or  privies  to  them.  If  they  are  binding  upon  such  persons  the 
State  of  New  York  may  not  levy  a  tax  upon  property  which  has 
been  transferred  free  from  the  burden  and  impose  a  personal 
liability  on  the  executors  who  have  been  declared  forever  exempt 
from  all  demands  against  the  estate.  The  enforcement  of  the 
claim  for  such  a  tax  against  the  property,  against  the  distribu- 
tees of  the  property,  and  against  those  who  have  distributed  it, 
under  the  direction  of  the  court,  and  with  its  assurance  that  no 
claims  against  them  shall  longer  exist,  is  plainly  inconsistent 
with  the  judicial  proceedings  by  which  the  property  has  been 
administered.  Is  then  the  nature  of  the  proceedings  such  that 


182  N.  Y.  557  315 

they  are  binding  not  only  upon  those  who  were  parties  or  privies 
to  them,  but  upon  all  others  as  well? 

"  When  the  owners  of  property  die,  that  property,  under  the 
conditions  and  restrictions  of  the  law  applicable,  is  transmitted 
to  their  successors  named  by  their  wills  or  by  the  laws  regulat- 
ing inheritance  in  cases  of  intestacy.  For  a  suitable  time  it  is 
essential  that  the  property  should  remain  under  the  control  of  the 
State,  until  all  just  charges  against  it  can  be  discovered  and  paid, 
and  those  entitled  to  it  as  new  owners  can  be  ascertained.  It 
is  in  the  public  interest  that  the  property  should  come  under  the 
control  of  the  new  owners,  after  such  delays  only  as  will  afford 
opportunity  for  investigation  and  hearing  to  guard  against 
mistake,  injustice,  or  fraud.  It  is  the  duty  of  the  sovereign  to 
provide  a  tribunal,  under  whose  direction  the  just  demands 
against  the  estate  may  be  determined  and  paid,  the  succession 
decreed,  and  the  estate  devolved  to  those  who  are  found  to  be 
entitled  to  it.  Sometimes  this  duty  is  performed  by  conferring 
jurisdiction  upon  a  single  court  and  sometimes  by  dividing  the 
jurisdiction  among  two  or  three  courts.  The  courts  may  be 
termed  ecclesiastical,  probate,  orphans',  surrogate  or  equity 
courts.  The  jurisdiction  may  be  exercised  exclusively  in  one, 
or  divided  among  two  or  more,  as  the  sovereign  shall  determine. 
But  somewhere  the  power  must  exist  to  decide  finally  as  against 
the  world  all  questions  which  arise  in  the  settlement  of  the 
succession.  Mistakes  may  occur  and  sometimes  do  occur,  but  it 
is  better  that  they  should  be  endured  than  that,  in  a  vain  search 
for  infallibility,  questions  shall  remain  open  indefinitely.  As 
was  said  by  Mr.  Justice  Bradley,  speaking  on  this  subject  in 
Broderick's  Will,  21  Wall.  503,  p.  519:  'The  world  must  move 
on,  and  those  who  claim  an  interest  in  persons  and  things  must 
be  charged  with  knowledge  of  their  status  and  condition,  and 
of  the  vicissitudes  to  which  they  are  subject.  This  is  the  founda- 
tion of  all  judicial  proceedings  in  rem.'  It  is  therefore  within  the 
power  of  the  sovereign  to  give  to  its  courts  the  authority,  while 
settling  the  succession  of  estates  in  their  possession  through 
their  officers,  the  executors  or  administrators,  to  determine 
finally  as  against  the  world  all  questions  which  arise 
therein.  *  *  * 

"In  ascertaining,  on  a  writ  of  error  to  a  State  court,  what 
credit  is  given  to  these  judicial  proceedings  by  the  laws  and  us- 
ages of  the  State  of  New  Jersey,  we  are  limited  to  the  evidence  on 
that  subject  before  the  court  whose  judgment  we  are  reviewing. 


316  THE   COURT   OF   APPEALS   DECISIONS 

Hanley  v.  Donoghue,  116  U.  S.  1;  Chicago  &  Alton  Railroad 
v.  Wiggins  Ferry  Co.,  119  U.  S.  615,  622.  The  only  evidence 
upon  this  point  was  in  an  affidavit  of  an  attorney  and  coun- 
sellor at  law  of  that  State.  The  evidence  is  meagre  and  not 
entirely  satisfactory  and  conclusive.  It  was,  however,  uncon- 
tradicted.  *  *  *  In  relying  upon  evidence  of  this  kind  we 
are  quite  aware  that  we  may  not  ascertain  with  the  precision 
which  might  be  desired  the  credit  which  the  State  of  New  Jersey 
attaches  to  these  judicial  proceedings.  But  it  is  all  that  we  can 
have.  We  think  that  we  may  safely  infer  from  it  that  the  order 
of  the  surrogate  barring  all  creditors  who  had  failed  to  bring 
in  the  demand  from  any  further  claim  against  the  executors  was 
binding  upon  all.  It  was  an  order  which  he  had  '  full  and  compe- 
tent authority  to  make,'  and  it  was  one  of  the  acts  which  could 
not  be  impeached  collaterally.  We  think  also  that  the  juris- 
diction to  direct  a  final  distribution  means  a  distribution  which 
shall  be  final,  so  far  at  least  as  any  person  having  a  demand 
against  the  estate  is  concerned.  If  we  have  discerned  correctly 
the  effect  which  New  Jersey  gives  to  these  judicial  proceedings, 
it  is  obvious  that  the  assessment  of  this  tax  denies  them  full  faith 
and  credit  in  two  respects:  First,  in  seeking  a  part  of  an  estate 
which  has  been  finally  distributed  to  those  who  were  entitled  to 
it  under  the  will;  and,  second,  in  fixing  a  personal  responsibility 
for  the  tax  upon  the  executors  who  had  been  conclusively  exon- 
erated from  such  a  liability." 

The  court  further  say  (page  59),  that  the  State  Comptroller 
"might  have  attacked  the  jurisdiction  of  the  New  Jersey  courts, 
and  thus  brought  forward  for  consideration  many  important 
questions  which,  in  the  view  we  take  of  the  case,  need  not  even 
be  stated.  But  there  was  no  attempt,  except  in  argument  here, 
to  deny  the  right  of  the  New  Jersey  court  to  act  upon  the  paper 
writing  purporting  to  dispose  of  the  estate  of  Tilt,  and  by 
admitting  it  to  probate  to  convert  it  into  an  operative  will.  It 
is  true  that,  as  a  basis  of  assessing  transfer  taxes,  it  was  proved 
that  Tilt  was  a  resident  of  New  York  at  the  time  of  his  death, 
a  fact  which  would  be  relevant  to  the  question  of  jurisdiction. 
But  that  fact  was  not  proved  or  used  for  the  purpose  of  invali- 
dating the  proceedings  taken  in  probating  the  will  and  adminis- 
tering the  estate.  On  the  contrary,  the  taxes  were  based  upon 
the  provisions  of  the  instrument,  which  derived  all  its  authen- 
ticity as  a  will  and  all  its  capacity  to  transmit  property  from  the 
judicial  proceedings  in  New  Jersey. 


182  N.  Y.  557  317 

"It  appears  conclusively  from  the  action  taken  in  the  New 
York  Surrogates'  Court  that  there  was  no  attempt  to  declare 
the  New  Jersey  proceedings  void  because  they  were  taken  with- 
out jurisdiction.  In  the  appraiser's  report  it  is  said  that  the 
deceased  had  left  a  will  'which  was  duly  admitted  to  probate  in 
the  Surrogate's  Court  of  the  county  of  Morris,  State  of  New 
Jersey,  and  that  letters  testamentary  were  issued  by  said  Surro- 
gate Court.'  The  specific  legacies  and  the  disposition  of  the  res- 
idue of  the  estate  were  then  stated.  The  Surrogate,  in  assessing 
the  taxes,  assessed  them  specifically  on  the  beneficiaries,  giving 
their  respective  names  and  the  values  of  the  property  they 
respectively  took  under  the  will.  Two  life  estates  and  several 
remainders,  created  by  the  will,  were  valued  appropriately  and 
the  taxes  assessed  accordingly.  All  this  is  utterly  inconsistent 
with  an  attack  upon  the  jurisdiction,  and  we  need  not  consider 
whether  it  could  have  been  made  with  success.  *  *  * 

"(Page  60.)  For  the  foregoing  reasons  we  think  that  the 
judgment  below  denied  to  the  New  Jersey  proceedings  the  full 
faith  and  credit  to  which  they  were  entitled  by  the  Constitution 
and  laws  of  the  United  States." 


Vide  Matter  of  Cummings,  142  App.  Div.  377-386.  Etiam  Matter  of 
Sebastian  D.  Lawrence,  N.  Y.  Law  Journal,  February  15,  1913,  in  which 
Surrogate  Fowler  said,  in  part:  "The  decedent,  who  was  a  resident  of 
Connecticut,  died  on  the  28th  day  of  May,  1909.  An  order  assessing  a 
transfer  tax  upon  his  estate  was  entered  by  this  court  on  the  first  day  of 
November,  1912,  and  the  executors  of  the  estate  have  appealed  from  that 
part  of  the  order  which  assessed  a  tax  upon  the  value  of  certain  bonds 
which  the  appraiser  reported  as  having  been  transferred  by  the  decedent 
'in  contemplation  of  death,  or  intended  to  take  effect  at  or  after  death.' 
At  the  time  of  decedent's  death  these  bonds  were  in  a  safe  deposit  vault 
in  the  National  Park  Bank  in  this  city.  The  executors  contend  that  the 
bonds  in  question  were  the  property  of  the  persons  whose  names  were 
written  on  the  envelopes  which  were  found  with  the  bonds,  that  they  did 
not  form  any  part  of  decedent's  estate,  and  that  they  were  not  given  by 
decedent  in  contemplation  of  his  death  or  as  a  gift  intended  to  take  effect 
at  or  after  his  death.  The  persons  who  allege  that  the  bonds  belonged  to 
them  and  not  to  the  decedent,  were  next  of  kin  of  decedent,  as  well  as 
legatees  under  his  will. 

"  The  decedent's  will  was  probated  in  Connecticut.  An  appeal  having 
been  taken  from  the  decree  admitting  the  will  to  probate,  the  parties 
interested  in  decedent 's  estate  entered  into  an  agreement  which  construed 
and  modified  certain  provisions  of  the  will,  admitted  that  the  bonds  in 
question  did  not  belong  to  decedent  and  provided  that  the  appeal  should 
be  withdrawn.  This  agreement  was  duly  confirmed  by  the  Probate  Court. 
It  does  not  appear  that  at  any  time  prior  to  the  date  of  this  agreement  the 


318  THE   COURT   OF   APPEALS   DECISIONS 

persona  whose  names  were  written  on  the  envelopes  attached  to  the  bonds 
claimed  that  they  were  the  owners  of  the  bonds. 

"  The  executors  thereafter  filed  a  preliminary  accounting  with  the  Court 
of  Probate  for  the  First  Judicial  District  of  New  London,  and  the  decree 
of  the  court,  which  was  entered  upon  the  consent  of  all  the  parties,  con- 
tained a  finding  that  these  bonds  at  the  time  of  the  death  of  decedent, 
'formed  no  part  of  the  estate  of  said  decedent,  but  were  when  deposited  in 
said  safe  deposit  box  the  property  respectively  of  the  persons  with  whose 
names  they  were  marked,  and  were  given  to  said  persons  respectively  by 
said  Sebastian  D.  Lawrence  during  his  lifetime,  and  were  not  given  to 
said  persons  or  any  of  them  in  contemplation  of  the  death  of  the  said  Sebas- 
tian D.  Lawrence,  or  to  take  effect  upon,  at  or  after  the  death  of  said 
Sebastian  D.  Lawrence.' 

"  The  first  question,  therefore,  which  must  be  determined  by  this  court 
is  whether  the  finding  of  the  Court  of  Probate  for  the  District  of  New 
London,  Connecticut,  as  to  the  ownership  of  the  bonds  is  binding  upon  this 
court.  Section  1  of  article  4  of  the  Constitution  of  the  United  States  pro- 
vides that  'full  faith  and  credit  shall  be  given  in  each  State  to  the  public 
acts,  records  and  judicial  proceedings  of  every  other  State,'  and  §  905  of 
the  Revised  Statutes  of  the  United  States  provides  'that  the  said  records 
and  judicial  proceedings  shall  have  such  faith  and  credit  given  to  them  in 
every  court  within  the  United  States  as  they  may  have  by  law  or  usage  in 
the  courts  of  the  State  from  which  they  are  taken.' 

"  No  evidence  was  adduced  before  the  appraiser  to  show  what  credit  is 
given  by  the  laws  and  usages  of  Connecticut  to  the  decree  of  a  probate 
court  of  that  State  entered  upon  an  accounting  by  an  executor.  There  was 
no  proof  that  such  decrees  are  held  by  the  laws  and  usages  of  Connecticut 
as  binding  against  the  whole  world.  Therefore  this  matter  does  not  come 
within  the  decision  in  Tilt  v.  Kelsey  (207  U.  S.  43). 

"  It  has  been  held  that  the  courts  of  probate  in  Connecticut  are  courts  of 
special  and  limited  jurisdiction  (Potwines'  Appeal,  31  Conn.  381);  that 
their  decrees  may  be  attacked  collaterally  for  want  of  jurisdiction,  and  that 
they  cannot  conclusively  determine  the  facts  giving  them  jurisdiction, 
whether  those  facts  be  quasi  jurisdictional  or  otherwise  (Sears  v.  Terry, 
26  Conn.  273). 

"  When  the  judgment  of  such  a  court  is  relied  upon  it  is  incumbent  upon 
the  person  asserting  a  right  thereunder  to  prove  that  the  court  had  jurisdic- 
tion of  the  subject-matter,  that  the  law  authorized  the  rendition  of  such  a 
judgment,  and  that  the  steps  taken  to  acquire  jurisdiction  both  of  the  per- 
son and  the  subject-matter  were  duly  had  and  taken  according  to  the  law 
under  which  the  judgment  was  assumed  to  be  rendered.  (Matter  of  Law, 
56  App.  Div.  454). 

"  In  the  proceeding  before  the  transfer  tax  appraiser  the  executors  relied 
upon  the  judgment  of  the  Probate  Court  of  Connecticut,  but  they  did  not 
prove  that  that  court  had  jurisdiction  to  render  a  judgment  in  an  account- 
ing proceeding  determining  the  ownership  of  personal  property  as  between 
the  representatives  of  the  decedent,  and  those  claiming  by  title  adverse  to 
the  decedent.  In  the  absence  of  such  proof  this  court  is  not  bound  by  the 
decree  of  the  Probate  Court  of  Connecticut. 

"  Jt  appears  to  me  that  in  order  to  bind  the  State  Comptroller  of  the  State 


182  N.  Y.  557  319 

of  New  York  by  the  judgment  of  the  Probate  Court  of  Connecticut  he 
should  have  been  made  a  party  to  the  proceeding.  He  had  an  interest  in 
the  proceeding  to  the  extent  of  the  transfer  tax  that  could  be  imposed  by 
this  State  if  it  were  found  that  the  bonds  belonged  to  the  decedent.  If 
the  title  to  property  ostensibly  belonging  to  a  decedent,  but  claimed  after 
his  death  by  other  persons,  could  be  determined  by  the  agreement  of  the 
parties  between  themselves  and  without  notice  to  the  State  Comptroller 
the  transfer  tax  statute  could  be  successfully  evaded  and  its  provisions 
nullified.  Therefore,  in  order  to  make  such  a  determination  binding  upon 
the  State  Comptroller,  he  should  be  made  a  party  to  the  proceeding. 

"  The  record  of  the  Probate  Court  of  Connecticut  admitted  in  evidence 
before  the  appraiser  shows  that  the  State  Comptroller  of  the  State  of  New 
York  was  not  a  party  to  the  agreement  by  which  the  ownership  of  the  bonds 
was  admitted  to  be  in  Nanine  Lawrence  Pond,  Josephine  B.  Lawrence, 
Ethel  K.  Lawrence  and  Edward  R.  True,  Jr.;  that  no  notice  was  served 
upon  him  of  the  proposed  accounting  of  the  executors,  and  he  was  not  a 
party  to  the  proceeding  by  which  the  Court  of  Probate  found  that  the 
bonds  did  not  belong  to  the  decedent  at  the  time  of  his  death.  Therefore 
the  State  Comptroller  of  the  State  of  New  York  is  not  bound  by  the  decree 
of  the  Probate  Court  of  Connecticut  (Bartlett  v.  Spicer,  75  N.  Y.  528; 
Rogers  ».  Adriatic  Fire  Ins.  Co.,  148  N.  Y.  34;  Smith  v.  Century  Trust  Co., 
154  N.  Y.  335;  Matter  of  Kimball,  155  N.  Y.  63;  Pennoyer  v.  Neff,  95 
U.  S.  714;  Haddock  ».  Haddock,  201  U.  S.  562).  The  right  of  the  State  of 
New  York  to  a  transfer  tax  could  not  be  affected  by  a  proceeding  in  an- 
other jurisdiction  to  which  the  State  of  New  York  was  not  a  party  (Matter 
of  Cummings,  142  App.  Div.  377).  Besides,  the  decree  of  the  Probate 
Court  of  Connecticut  was  not  made  upon  controverted  pleadings  or  issues 
presented  to  the  court  for  adjudication,  but  upon  an  agreement  entered 
into  between  the  parties. 

"  No  question  as  to  the  ownership  of  the  bonds  having  been  litigated  be- 
fore the  court,  and,  therefore,  no  judgment  upon  the  merits  of  any  conflict- 
ing claims  having  been  rendered  by  it,  its  decree  cannot  prevent  this  court 
from  inquiring  into  the  validity  of  the  title  of  those  claiming  ownership  of 
the  bonds  or  determining  upon  general  principles  of  law  the  respective 
rights  of  the  different  parties  to  the  bonds  in  question  (Reynolds  v.  Stockton, 
27  Abb.  New  Cas.  112;  Texas  &  Pac.  R  R.  v.  Southern  Ry.,  137  U.  S.  48; 
Lawrence  Mfg.  Co.  v.  Janesville  Mills,  138  U.  S.  552). 

"  It  therefore  appears  that  this  court  may,  notwithstanding  the  decree  of 
the  Court  of  Probate  of  Connecticut,  inquire  into  the  ownership  of  the 
bonds  located  in  this  county  at  the  time  of  decedent's  death,  and  determine 
that  question  in  so  far  as  the  right  of  the  State  of  New  York  to  a  transfer 
tax  is  dependent  upon  such  determination." 

Vide  post,  page  701,  for  that  portion  of  the  opinion  in  the  Lawrence  case, 
supra,  relating  to  ownership  of  the  bonds. 

For  discussion  of  question  of  domicile  vide  opinion  cf  Surrogate  Fowler 
in  Matter  of  Grant,  N.  Y.  Law  Journal,  December  9,  1913;  etiam  Matter 
of  Grant,  id.,  November  14,  1913,  opinion  quoted,  post,  page  833. 


320  THE    COURT  OF   APPEALS   DECISIONS 

1905. 

MATTER  OF  POTTER  PALMER,  183  N.  Y.  238. 

Testator  died  a  resident  of  Illinois  in  1902,  and  a  portion  of 
his  estate  consisted  of  stock  in  N.  Y.  Central  and  H.  R.  R.  R. 
Co.  The  estate  contended  that  the  tax  should  only  be  "upon 
that  proportion  of  the  capital  and  assets  of  the  company  em- 
ployed within  the  State  of  New  York."  That  is  to  say,  because 
it  was  made  to  appear  that  about  36  per  cent  of  the  corporate 
capital  was  invested  in  properties  without  the  State,  it  was 
argued  that  the  appraisement  of  the  value  of  the  capital  stock, 
in  this  proceeding,  should  have  been  proportionately  less. 

The  court  say,  page  240:  "The  basis  for  this  claim  is  the 
proposition  that  the  corporation  itself  is  not  taxable  by  the 
State  upon  its  investments  in  railroad  properties  situated  out- 
side of  the  State,  under  the  provisions  of  §  182  of  the  General 
Tax  Law,  which  impose  an  annual  franchise  tax  upon  the  cor- 
poration, measured  by  the  amount  of  the  capital  stock  employed 
within  the  State.  (People  ex  rel  N.  Y.  C.  &  H.  R.  R.  R.  Co.  v. 
Knight,  173  N.  Y.  255.) 

"The  error  in  the  argument  is  in  assuming  that  the  assess- 
ment of  the  corporate  franchise  for  taxation  purposes  proceeds 
upon  the  same  principle  upon  which  the  interest  of  the  holder 
of  capital  stock  is  taxed.  The  franchise  tax,  which  is  assessed 
against  the  corporation  is  to  be  computed  upon  the  value  of 
property  within  the  State,  in  which  the  corporate  capital  is 
invested.  (People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y. 
475;  People  ex  rel  N.  Y.  C.  &  H.  R.  R.  R.  Co.  v.  Knight,  supra.) 
The  assessment  of  the  stockholder,  however,  is  computed  upon 
the  value  of  his  interest  in  the  whole  of  the  corporate  property, 
as  evidenced  by  the  number  of  the  shares  of  stock,  which  he 
holds.  Their  market  value  may,  or  may  not,  represent,  pro- 
portionately, the  actual  value  of  the  corporate  properties.  Very 
often  it  does  not  and  the  market  value  of  the  shares  of  capital 
stock  may  be  quite  disproportionately  influenced  by  considera- 
tions, or  by  circumstances,  having  little  reference  to  actual 
conditions.  That  value,  whatever  it  may  be  in  the  market, 
is  the  worth  attached  to  an  interest  in  the  corporate  assets  and 
properties1,  regarded  as  a  whole.  *  *  * 

"  (Page  241.)  The  Transfer  Tax  Act  operates  upon  that  gen- 
eral right  to  succeed  to  the  interest  of  the  deceased  in  the  cor- 
poration, and  it  is  inconceivable  that  the  value  of  the  interest, 


184  N.  Y.  229  321 

upon  which  the  tax  is  computed,  is  determinable  by  the  location 
of  the  corporate  properties." 

As  to  corporations  incorporated  in  New  York  and  in  other  States,  vide 
Matter  of  Cooley,  186  N.  Y.  220;  Matter  of  Thayer,  193  N.  Y.  430;  as  to 
joint  stock  associations,  Matter  of  Wilmcr,  153  App.  Div.  804. 

Matter  of  Ames,  141  N.  Y.  Supp.  793-795.  Intangible  property  held  by 
non-resident  decedent  is  not  taxable  if  transferred  since  amendment  by 
Laws  of  1911,  chapter  732,  in  effect  July  21,  1911;  subdivision  2  of  §  220 
and  §  243. 


1906. 

MATTER  OF  JOHN  W.  DAVIS,  184  N.  Y.  299. 

The  court  say,  page  301:  "As  the  order  of  the  Appellate 
Division  is  silent  as  to  the  grounds  on  which  it  was  made,  it 
must,  under  §  1338  of  the  Code  of  Civil  Procedure,  be  pre- 
sumed that  the  decree  of  the  surrogate  was  reversed  on  ques- 
tions of  law  only,  and  if  there  was  any  evidence  to  sustain  the 
finding  of  the  surrogate  in  favor  of  the  appellant,  the  order  of  the 
Appellate  Division  was  erroneous.  (Matter  of  Keefe,  164  N.  Y. 
352.)  We  think  the  evidence  was  ample  to  justify  the  finding  of 
the  surrogate.  The  facts,  tersely  stated,  are  as  follows:  The 
appellant  was  a  niece  of  the  testator's  wife  and  was  born  on 
January  31, 1866.  Her  mother  died  November  12,  1872,  where- 
upon her  aunt,  Mrs.  Davis,  took  the  appellant  from  her  father's 
home  to  her  own,  where  the  appellant  continued  to  live  as  a 
member  of  the  testator's  family  till  his  death  on  January  11, 
1903,  a  period  of  over  thirty  years.  During  her  infancy,  the  ap- 
pellant was  supported  and  maintained  at  the  expense  of  the 
testator  and  was  subject  exclusively  to  his  control  and  that  of 
his  wife,  the  father  in  no  respect  contributing  to  the  appel- 
lant's support  nor  exercising  any  direction  over  her." 

The  question  involved  was  whether  legatee  sustained  to  the 
testator  the  relation,  to  use  the  words  of  statute,  of  a  "  child  to 
whom  any  such  decedent  *  *  *  for  not  less  than  ten  years 
prior  to  such  transfer  stood  in  the  mutually  acknowledged 
relation  of  a  parent,  provided,  however,  such  relation  began  at  or 
before  the  child's  fifteenth  birthday  and  was  continuous  for 
said  ten  years  thereafter."  The  court  held  that  she  did,  saying, 
page  303:  "It  is  objected  that  the  appellant  did  not  address 
her  uncle  and  aunt  as  father  and  mother,  nor  they  call  her  daugh- 
ter. This  is  of  but  slight  importance.  To  give  effect  to  it, 
would  be  to  sacrifice  conduct  and  acts  to  appellations  which 
21 


322  THE   COURT   OF   APPEALS   DECISIONS 

are  often  the  result  of  accident.  Had  the  appellant  been  an 
entire  stranger  both  in  blood  and  affinity,  it  is  probable  that 
she  would  have  called  the  testator  and  his  wife  father  and 
mother,  but  still  other  terms  denoting  affection  might  have 
been  used.  Being,  however,  the  niece  of  the  parties  (of  the 
testator  by  marriage),  it  was  more  natural  that  she  should 
continue  to  call  them  uncle  and  aunt  than  that  she  should  adopt 
a  new  term." 

Vide  subdivision  1  of  §  221a.  Matter  of  Deutsch,  107  App.  Div.  192, 
appeal  withdrawn  and  surrogate's  order  affirmed  after  above  decision. 
Matter  of  McMurray,  96  App.  Div.  128;  Matter  of  Birdsall,  22  Misc.  180- 
187,  affirmed,  without  opinion,  43  App.  Div.  624. 

Beneficiary  is  a  competent  witness,  vide  Matter  of  Brundage,  31  App. 
Div.  348-353,  and  cases  cited,  post,  page  855. 


1906. 

MARY  E.  JACKSON  v.  ROBERT  W.  TAILER,  AS  EXECU- 
TOR, ETC.,  184  N.  Y.  603,  affirms,  without  opinion,  96 
App.  Div.  625,  which  affirms,  on  opinion  below,  41  Misc. 
36. 

This  was  an  action  for  the  construction  of  a  will.  The  tes- 
tatrix died  a  resident.  The  plaintiff,  one  of  the  legatees,  claimed 
that  she  was  entitled  to  receive  the  whole  legacy  left  to  her, 
and  that  the  transfer  tax  should  be  paid  out  of  the  residuary 
estate. 

The  surrogate  in  directing  judgment  against  the  plaintiff 
said,  page  37:  "The  clause  of  the  will  upon  which  she  relies  is 
applicable  to  all  the  legacies  except  that  of  the  residuum,  and 
reads  as  follows:  'I  do  hereby  further  authorize  and  empower 
my  said  executors,  in  his  or  their  discretion,  to  pay  any  or  all  of 
the  aforesaid  legacies  within  one  year  after  my  decease  without 
any  rebate  or  reduction  whatever.'  It  was  left  entirely  optional 
with  the  executor  whether  or  not  he  would  anticipate  the  time 
fixed  by  statute  for  the  payment  of  legacies,  and  the  provision 
that  such  payment  should  be  without  rebate  or  deduction  seems 
to  have  been  intended  to  take  effect  only  if  he  should  so  exercise 
his  discretion  as  to  anticipation  of  payment.  It  doubtless 
would  justify  the  executor,  if  he  anticipated  payment,  in  waiv- 
ing the  usual  rebate  of  interest.  The  clause  can  hardly  have 
been  intended  to  apply  to  a  succession  or  legacy  tax  because  the 
will  was  executed  on  February  15,  1884,  more  than  a  year  before 


185  N.  Y.  107  323 

the  first  act  was  passed  in  this  State  imposing  a  tax  on  legacies 
or  successions.  It  is  true  that  the  will  was  generally  reaffirmed 
by  a  codicil  executed  after  the  passage  of  the  act,  but  that 
mere  reaffirmation  cannot  throw  any  light  upon  the  intention 
of  the  testatrix  at  the  time  the  clause  in  question  was  framed. 
Apart  from  this  consideration,  in  my  opinion,  the  words  used  by 
the  testatrix  would  not  have  the  effect  claimed  for  them  by 
plaintiff,  even  if  the  will  had  been  executed  after  the  passage  of 
the  act  imposing  the  tax. 

"  It  is  well  settled  that  the  tax  in  question  is  not  a  tax  upon 
the  estate  or  legacy  bequeathed  or  devised,  but  is  a  tax  imposed 
upon  the  legatee  for  the  privilege  of  succeeding  to  the  property. 
Matter  of  Gihon,  169  N.  Y.  443.  Therefore,  although  the 
executor  is  required  to  pay  the  tax,  he  pays  it,  not  for  account 
of  the  estate,  and  as  a  deduction  from  the  legacy,  but  on  account 
of  the  legatee  upon  whom  the  tax  is  imposed. 

"  In  legal  effect  the  result,  as  between  the  estate  and  the 
legatee,  is  precisely  the  same  as  if  the  legacy  were  to  be  paid 
over  to  the  legatee  intact,  and  then  the  tax  was  to  be  collected 
from  him.  It  is  merely  for  the  convenience  of  the  State,  and  to 
insure  certainty  of  collection  that  the  duty  is  cast  upon  the 
executor  of  paying  the  tax.  Strictly  speaking,  therefore,  the 
tax  is  not  a  'rebate  or  deduction'  from  the  legacy.  Doubtless  a 
testator  may,  by  apt  words,  direct  that  the  tax  upon  a  particular 
legacy  or  class  of  legacies  should  be  paid  out  of  the  residuary 
estate,  but  as  pointed  out  by  the  Court  of  Appeals  in  the  case 
above  cited,  such  a  provision  would  simply  amount  to  an  in- 
crease of  the  legacy  by  the  amount  of  the  tax." 

Isham  v.  N.  Y.  Association  for  the  Poor,  177  N.  Y.  218;  Matter  of  Smith, 
80  Misc.  140-143;  Matter  of  Samuel  Myers,  N.  Y.  Law  Journal,  Novem- 
ber 22,  1913,  opinion  quoted,  supra,  page  759. 


1906. 

MATTER  OF  JOSEPH  STICKNEY,  185  N.  Y.  107,  writ  of 

error  dismissed  in  209  U.  S.  419,  sub  nom.  Stickney  v. 

Kelsey. 

Chapter  41,  Laws  of  1903,  held  to  be  valid,  reference  to  the 
journals  of  the  two  houses  establishing  that  there  was  present 
in  each  house  of  the  legislature  the  requisite  number  of  members, 
to  wit,  two-fifths. 


324  THE    COURT   OF   APPEALS   DECISIONS 

The  United  States  Supreme  Court  say:  "We  do  not  intend  to 
intimate  that,  if  the  words  of  the  opinion  were  capable  of  the 
meaning  which  is  attributed  to  them  in  this  assignment  of  error, 
there  would  have  been  shown  any  violation  of  the  Fourteenth 
Amendment.  League  v.  Texas,  184  U.  S.  156.  But  we  think, 
in  view  of  the  fact  that  when  the  copies  of  the  journals  were 
offered  in  evidence  no  objection  had  been  made  that  the  origi- 
nals were  not  produced,  the  language  of  the  court  may  quite  as 
naturally  be  interpreted  as  a  declination  to  pass  on  a  question, 
not  necessary  to  the  decision,  which  had  been  set  at  rest  for  the 
future  by  legislation.  The  best  that  can  be  said  for  the  plaintiffs 
in  error  is  that  the  action  of  the  court  was  ambiguous.  We  re- 
solve the  ambiguity  against  the  parties  complaining,  who  are 
bound  to  show  clearly  that  a  Federal  right  was  impaired,  rather 
than  misuse  our  ingenuity  to  spell  out  a  Federal  question  to 
aid  a  defense  which  is  merely  technical  and  destitute  of  sub- 
stantial merit. 

"  It  does  not  therefore  appear  that  the  judgment  under  review 
was  based  upon  the  decision  of  any  Federal  question.  Bachtel 
v.  Wilson,  204  U.  S.  36." 

Vide  Scudder  v.  Comptroller,  175  U.  S.  32,  dismissing  writ  of  error; 
Matter  of  Houdayer,  150  N.  Y.  37. 


1906. 

MATTER  OF  MARY  A.  WEEKS,  186  N.  Y.  641,  affirms,  with- 
out opinion,  109  App.  Div.  869. 

Involves  same  question  as  Matter  of  Stickney,  185  N.  Y.  107. 


1906. 

MATTER  OF  SIMEON  G.  CURTICE,  185  N.  Y.  643,  affirms, 
without  opinion,  111  App.  Div.  230. 

The  sole  complaint  of  estate  was  that  too  high  a  valuation 
had  been  placed  upon  certain  stock  of  decedent.  The  court  say, 
page  231:  "The  specific  property  involved  is  3,737  shares  of  the 
common,  and  2,025  shares  of  the  preferred,  capital  stock  of 
Curtice  Brothers  Company,  and  which  has  been  appraised  at 
$110  and  $107.50  per  share.  It  is  claimed  that  said  valuations 
should  not  have  exceeded  $80  and  $90  per  share  respectively. 


185  N.  Y.  543  325 

While  the  determination  of  the  values  of  these  stocks  must  be 
more  or  less  a  matter  of  speculation,  I  think  that  a  valuation 
of  the  preferred  stock  at  $97.50  and  of  the  common  stock  at  $100 
per  share  will  be  nearer  correct  for  the  purposes  of  this  proceed- 
ing than  that  adopted  by  the  learned  surrogate. 

"Curtice  Brothers  Company  was  a  private  family  corporation, 
engaged  in  manufacturing  catsups,  jellies,  etc.,  and  having  its 
principal  place  of  business  in  Rochester.  The  entire  capitaliza- 
tion of  the  company  consisted  of  7,000  shares  of  preferred  and 
8,000  shares  of  common  stock.  The  active  manager  of  the  com- 
pany was  a  brother  of  the  deceased.  The  company  had  been  hi 
existence  four  or  five  years  and  had  paid  dividends  at  the  rate 
of  ten  per  cent  per  annum  upon  the  common,  and  of  seven  per 
cent  per  annum  upon  the  preferred. 

"  The  stock,  as  might  be  expected,  was  an  inactive  one.  It 
does  not  appear  to  have  been  listed  or  dealt  in  upon  any  stock 
exchange  or  market  other  than  the  local  one  at  Rochester.  A 
few  scattering  sales  had  been  reported  at  the  latter  during  the 
year  or  more  preceding  decedent's  death,  and  immediately 
after  his  death  there  was  a  bid  quotation  of  $110  per  share  for 
the  common  and  a  reported  sale  upon  the  exchange  sheet  of  ten 
shares  of  the  preferred  at  $107.50,  and  which  figures  were 
adopted  by  the  surrogate.  Outside  of  one  sale  of  fifty  shares  at 
105^  there  is  no  evidence  of  any  sale  of  or  quotation  upon  a 
larger  lot  of  stock  than  ten  or  twenty  shares.  Only  two  witnesses 
were  sworn  as  to  the  value  of  the  stock,  and  they  seem  to  have 
been  entirely  familiar  with  the  limitations  of  the  market  for 
it,  and  with  the  conditions  and  considerations  which  would  fix 
its  value.  They  agreed  that  the  fair  market  valuations  would  be 
for  the  preferred  ninety  and  for  the  common  eighty.  Upon 
cross-examination  they  referred  to  the  sales  of  occasional  small 
lots  at  the  higher  prices  already  mentioned,  and  accounted  for 
the  difference  between  such  prices  and  the  valuations  fixed  by 
them  by  and  upon  the  theory  in  substance  that  while  small  lots 
could  be  sold  for  the  higher  prices,  there  would  not  be  a  demand 
which  would  absorb  in  any  reasonable  time  the  large  amount 
held  by  decedent's  estate  at  such  prices.1 

"  It  is  urged  by  the  learned  counsel  for  the  respondent  that 
this  theory  is  hypothetical  and  speculative,  and  that  it  should 
yield  to  the  concrete  fact  that  some  of  the  stock  has  actually 
been  sold  or  bid  for  at  the  prices  adopted  by  the  surrogate. 
But  in  my  judgment  the  fact  referred  to  is  not  wholly  appli cable 


326  THE    COURT   OF   APPEALS   DECISIONS 

to  or  controlling  of  the  conditions  and  questions  now  presented 
to  us. 

"The  basic  issue  to  be  determined  by  the  surrogate  was  what 
was  the  'clear  market  value,'  the  'fair  market  value'  of  3,737 
shares  of  the  common  and  of  2,025  shares  of  the  preferred  stock 
in  question,  for  purposes  of  taxation,  with  a  reasonable  time  and 
under  fair  opportunities  for  purchase.  The  executors  would  not 
be  justified  in  recklessly  and  precipitately  throwing  the  stock 
upon  the  market  in  such  a  manner  as  would  inevitably  invite 
sacrifice.  Neither  should  they  be  compelled  to  occupy  an  indef- 
inite time  in  the  attempt  to  peddle  the  stock  out  in  ten-share 
lots. 

"It  must  be  apparent  at  once  that  the  question  thus  presented 
under  the  circumstances  of  this  case  is  a  very  different  one  from 
that  of  the  prices  obtained  for  a  few  small  lots  from  time  to  time, 
and  mostly  before  any  possible  complications  were  suggested 
by  the  death  of  decedent. 

"The  only  witnesses  sworn  testified  positively  that  there 
would  not  be  a  market  for  such  a  large  amount  at  the  higher 
prices,  and  that  the  valuations  named  by  them  would  be  a  fair 
market  price. 

"  It  is  true  that  that  is  an  opinion  merely,  but  it  is  the  opinion 
of  conceded  experts  who  are  not  contradicted,  except  by  the  rec- 
ord of  the  sales  already  referred  to.  Moreover,  ordinary  obser- 
vation and  judgment  tends  to  confirm  their  opinion,  at  least  to 
•some  extent. 

"Here  was  a  total  holding  of  stock  of  the  par  value  of  $576,200 
out  of  a  total  capitalization  of  $1,500,000.  Yet  while  it  repre- 
sents a  very  large  amount,  it  was  still  a  minority  holding  in  a 
private  corporation  controlled  by  the  family  to  which  decedent 
had  belonged.  The  stock  was  closely  held.  There  was  no 
general  and  public  ownership  of  it  or  market  for  it,  and  while  an 
investor  might  be  willing  to  take  a  small  amount  at  a  high  price, 
possibly  determined  by  dividends,  it  does  not  follow  that  there 
could  be  found  to  absorb  so  large  an  amount  either  a  sufficient 
number  of  small  purchasers  or  large  purchasers,  who  would  be 
willing  to  invest  so  large  a  sum  which  still  would  not  give  them 
control,  but  leave  them  more  or  less  at  the  mercy  of  a  united 
family.  It  needs  no  extended  argument  to  show  that  the  sale  of 
this  large  minority  block  of  stock  in  a  comparatively  small 
concern  upon  a  local  and  restricted  market,  is  entirely  different 
from  that  of  a  sale  of  much  larger  amount  of  the  stock  of  a  large 


185  N.  Y.  543  327 

and  public  corporation  in  a  broad  and  general  market  like  the 
New  York  Stock  Exchange.  It  must  be  more  or  less  a  matter  of 
opinion  and  even  of  conjecture  what  could  be  obtained  for  it. 
But  what  I  do  feel  very  certain  of  is,  that  the  price  obtained 
for  a  few  little  lots  is  not  a  fair  measure  of  valuation  for  the 
large  amount  involved  in  these  proceedings,  and  that  the  valua- 
tion suggested  of  par  for  the  common  and  eighty-seven  and  one- 
half  for  the  preferred  is  quite  liberal  in  view  of  all  the  attendant 
contingencies.  No  evidence  was  given  as  to  the  intrinsic  value 
of  the  stock  outside  of  the  fact  that  it  paid  certain  dividends. 
We  may,  however,  take  judicial  notice  of  the  fact  that  the 
value  of  industrial  stocks  often  does  not  bear  close  apparent 
relations  to  the  rate  of  dividends  which  they  may  happen  to 
pay  at  a  given  time,  and  the  latter  is  not  by  any  means  a 
controlling  gauge  of  values.  (Matter  of  Smith,  71  App.  Div. 
605.)  *  *  * 

"Page  233:  Chapter  34  of  the  Laws  of  1891,  (§  122,  Decedent 
Estate  Law)  provides  that  'Whenever  *  *  *  it  shall  be- 
come necessary  to  appraise  in  whole  or  in  part  the  estate  of  any 
deceased  person  *  *  *  the  persons  whose  duty  it  shall  be  to 
make  such  appraisal  shall  value  *  *  *  all  such  property, 
stocks,  bonds,  or  securities  as  are  customarily  bought  or  sold  in 
open  markets  in  the  city  of  New  York,  or  elsewhere,  for  the  day 
on  which  such  appraisal  or  report  may  be  required  by  ascer- 
taining the  range  of  the  market  and  the  average  of  prices  as  thus 
found,  running  through  a  reasonable  period  of  time.' 

"  Assuming  that  this  statute  might  be  applicable  to  such  an 
appraisal  as  this,  I  think  it  quite  apparent  that  it  is  not  controll- 
ing here.  The  evidence  does  not  disclose  any  such  free  or  cus- 
tomary market  dealings  in  the  stock  in  question  as  fairly  to 
bring  it  within  the  scope  of  this  statute."  2 

Held,  that  order  of  surrogate  be  modified  by  fixing  the  value 
of  the  preferred  stock  at  $97.50  and  the  common  at  par. 

Matter  of  Cook,  114  App.  Div.  718-721,  reversed  on  other  point  in  187 
N.Y.253. 

1  Matter  of  Chappell,  151  App.  Div.  774;  Matter  of  Cook,  50  Misc.  487- 
493,  modified  on  another  point  in  187  N.  Y.  253;  Matter  of  Bach,  N.  Y. 
Law  Journal,  November  21, 1911,  opinion  quoted,  post,  page  617;  Matter  of 
Rees,  208  N.  Y.  590,  post,  page  392. 

2  Matter  of  Chambers,  id.,  January  31,   1912,  opinion  quoted,  post, 
page  627;  Matter  of  Crary,  31  Misc.  72-73,  and  other  cases  cited  sub  Closely 
Held  Stock. 


Ii28  THE    COURT   OF   APPEALS   DECISIONS 

1906. 

MATTER   OF   GEORGE    BACKHOUSE,   185   N.   Y.   544, 
affirms,  without  opinion,  110  App.  Div.  737. 

Edward  T.  Backhouse  died  before  1885,  and  by  his  will  left 
one-fifth  of  his  property  in  trust  to  his  son,  George  Backhouse, 
for  life,  remainder  to  his  said  son's  heirs,  "or  to  such  person  or 
persons  as  such  child  may  appoint  in  his  *  *  *  last  will  and 
testament."  The  son  George  Backhouse  died  in  1904,  leaving  a 
will  by  which  he  appointed  his  children  who  were  his  heirs,  to 
take  the  remainder  under  said  will  of  Edward  T.  -Backhouse. 
In  the  transfer  tax  proceeding  in  his  estate  the  appraiser  pro- 
ceeded to  tax  not  only  the  transfer  of  the  property  of  George 
Backhouse  but  also  the  remainder  under  the  trust  created  by 
Edward  T.  Backhouse.  The  appraiser  gave  notice  to  the  chil- 
dren, but  they  did  not  appear. 

Justice  Gaynor  in  giving  the  opinion  of  the  court,  said, 
page  739:  "The  children  of  George  Backhouse  get  the  one-fifth 
of  the  estate  of  their  grandfather  by  his  will  and  not  by  the  will 
of  their  father.  It  vested  in  them  when  the  grandfather's  will 
took  effect  (Matter  of  Lansing,  182  N.  Y.  238).  It  follows  that 
it  was  not  subject  to  a  transfer  tax,  for  the  Transfer  Tax  Law 
had  not  yet  been  passed  when  it  vested  in  them. 

"  The  surrogate  had  power  to  modify  his  decree,  and  should 
have  done  so,  first,  because  the  said  children  were  not  bound  by 
it  in  so  far  as  it  imposed  the  tax  hi  respect  of  the  property  they 
took  under  their  grandfather's  will,  for  they  were  only  notified 
of  an  appraisal  of  their  father's  estate,  and  that  was  therefore 
the  limit  of  the  jurisdiction  of  the  appraiser  and  surrogate  on 
their  default; :  second,  because  the  surrogate's  jurisdiction  being 
limited  to  transfers  covered  by  the  statute,  he  had  no  jurisdic- 
tion to  impose  the  tax;  and,  third,  because  at  most  it  was  a 
mistake  all  around  (Matter  of  Scrimgeour,  175  N.  Y.  507). 2 
That  in  this  Scrimgeour  case  the  tax  was  imposed  under  an  un- 
constitutional provision  of  the  statute  (a  fact  which  the  blind 
report  of  the  case  conceals)  does  not  distinguish  it  from  the  pres- 
ent case.  In  each  case  there  was  no  statute  for  what  was  done. 

"There  is  no  evidence  that  the  said  heirs  ever  elected  to  take 
under  the  appointment,  if  it  can  be  called  such,  of  their  father's 
will,  or  if  such  election  could  be  made." 

1  Second  paragraph  of  §  230.  Matter  of  Winters,  21  Misc.  551 ;  Matter  of 
Bolton,  35  Misc.  688;  Matter  of  Wolf,  137  N.  Y.  205-213,  etiam  supra, 
page  79. 


186  N.  Y.  220  329 

2  Matter  of  Scott,  208  N.  Y.  602,  post,  page  396,  and  cases  cited  sub 
Vacating  Decree. 

Matter  of  Smith,  150  App.  Div.  805-808;  Matter  of  Warren,  62  Misc. 
444-448.  Vide  cases  cited  sub  Power  of  Appointment. 


1906. 

MATTER  OF  FRANCIS  B.  COOLEY,  186  N.  Y.  220. 

Testator  died  a  resident  of  Connecticut  on  November  25, 1904, 
owning  stock  in  the  Boston  and  Albany  Railroad  Company 
which  the  transfer  tax  appraiser  assessed  at  its  market  value. 

The  court  say,  page  223:  "The  Boston  and  Albany  Railroad 
Company  is  a  consolidation  formed  by  the  merger  of  one  or  more 
New  York  corporations  and  one  Massachusetts  corporation. 
The  merger  was  authorized  and  the  said  consolidated  corpora- 
tion duly  and  separately  created  and  organized  under  the  laws 
of  each  State.  There  is  but  a  single  issue  of  capital  stock  repre- 
senting all  of  the  property  of  the  consolidated  and  dual  organ- 
ization. Of  the  track  mileage  about  five-sixths  is  in  Massachu- 
setts and  one-sixth  in  New  York.  *  *  * 

"(Page  227.)  Double  taxation  is  one  which  the  court  should 
avoid  whenever  it  is  possible  within  reason  to  do  so.  *  *  * 

"The  law  of  taxation  is  to  be  construed  strictly  against  the 
state  in  favor  of  the  tax-payer  as  represented  by  the  executor  of 
the  estate.  *  *  *  No  doubt  is  involved,  as  it  seems  to  me, 
about  the  meaning  and  application  of  the  statute.  The  dece- 
dent's stock  was  'property  within  this  state/  which  had  its 
situs  here  as  being  held  in  the  New  York  corporation  and  the 
transfer  of  it  was  taxable  here.  There  can  be  no  dispute  about 
that.  The  question  is  simply  over  the  extent  and  value  of  his 
interest  as  such  stockholder,  in  view  of  the  other  incorporation 
in  Massachusetts.  I  see  nothing  in  the  statute  which  prevents 
us  from  paying  decent  regard  to  the  principles  of  interstate 
comity  and  from  adopting  a  policy  which  will  enable  each  state 
fairly  to  enforce  its  own  laws  without  oppression  to  the  subject. 
This  result  will  be  attained  by  regarding  the  New  York  corpora- 
tion as  owning  the  property  situate  hi  New  York  and  the  Massa- 
chusetts corporation  as  owning  that  situate  in  Massachusetts, 
and  each  as  owning  a  share  of  any  property  situate  outside  of 
either  state  or  moving  to  and  fro  between  the  two  states,  and 
assessing  decedent's  stock  upon  that  theory.  That  is  the  ob- 
vious basis  for  a  valuation  if  we  are  to  leave  any  room  for  the 


330  THE    COURT   OF   APPEALS   DECISIONS 

Massachusetts  corporation  and  for  a  taxation  by  that  state  sim- 
ilar in  principle  to  our  own  without  double  taxation.  *  *  * 

"(Page  229.)  We  are  not  apprehensive  lest,  as  suggested,  New 
York  corporations  may  take  out  incorporation  in  other  states 
for  the  purpose  of  exempting  transfers  of  their  capital  stock 
from  taxation  under  the  principles  of  this  decision.  We  do  not 
regard  our  decision  as  giving  encouragement  to  any  such  course. 
It  is  based  upon  and  limited  by  the  facts  as  they  are  here  pre- 
sented, and  there  is  no  question  whatever  but  that  the  Boston 
and  Albany  Railroad,  in  good  faith,  and  for  legitimate  reasons, 
was  equally  and  contemporaneously  created  both  as  a  New 
York  and  a  Massachusetts  corporation.  It  can  no  more  be  said 
that  being  originally  and  properly  a  New  York  corporation  it 
subsequently  and  incidentally  became  a  Massachusetts  one  than 
could  be  maintained  the  reverse  of  such  proposition.  If  in  the 
future  a  corporation  created  and  organized  under  the  laws  of  this 
state,  or  properly  and  really  to  be  regarded  as  a  New  York  cor- 
poration, shall  see  fit  either  for  the  purpose  suggested,  or  for 
any  other  reason  subsequently  and  incidentally  and  for  ancillary 
reasons,  to  take  out  incorporation  in  another  state,  a  case  would 
arise  not  falling  within  this  decision.  *  *  * 

"  (Page  231.)  Lastly,  it  is  urged,  that  there  will  be  great  prac- 
tical difficulty  in  making  an  apportionment  of  property  for  the 
purposes  of  valuation  and  taxation  upon  the  lines  suggested, 
and  the  learned  counsel  for  the  respondent  has  suggested  many 
difficulties  and  absurdities  claimed  to  be  incidental  to  such 
course  of  procedure.  Most  of  them  certainly  will  not  arise  in 
this  case  and  they  probably  never  will  in  any  other.  Of  course 
an  appraisal  based  upon  an  apportionment  of  the  entire  prop- 
erty of  the  consolidated  company  between  the  New  York  and 
Massachusetts  corporations  may  be  made  a  source  of  much 
labor  and  expense  if  the  parties  so  desire.  Possibly  it  might  be 
carried  to  the  extent  of  a  detailed  inventory  and  valuation  of 
innumerable  pieces  of  property.  Upon  the  other  hand,  an 
apportionment  based  upon  trackage  or  figures  drawn  from  the 
books  or  balance  sheets  of  the  company  may  doubtless  be 
easily  reached  which  will  be  substantially  correct  and  any  in- 
accuracies of  which  when  reflected  in  a  tax  of  one  per  cent  upon 
426  shares  of  stock  will  be  inconsequential." 

Prior  to  amendment  of  §§  220  and  243  by  Chapter  732,  Laws  of  1911,  in 
effect  July  21,  1911,  in  estates  of  non-residents,  stock  in  B.  &  A.  R.  R.  was 
taxed  on  1837/10000  basis. 


186  N.   Y.   471  331 

Matter  of  Palmer,  183  N.  Y.  238;  Matter  of  Thayer,  193  N.  Y.  430; 
Matter  of  Wilmer,  153  App.  Div.  804. 

As  to  transfers  in  non-resident  estates  made  since  the  1911  amendment, 
vide  supra,  page  133. 


1906. 

MATTER  OF  LEONARD  J.  GORDON,  186  N.  Y.  471. 

Testator  died  a  resident  of  New  Jersey  on  January  17,  1905. 
The  decedent  died  seized  of  no  real  property  in  this  State,  but 
left  certain  personal  property  here,  the  value  of  which  was  ap- 
praised in  this  proceeding.  At  the  time  of  his  death  the  testator 
had  a  policy  of  life  insurance  in  the  Equitable  Life  Assurance 
Society.  The  court  say,  page  482:  f'ln  conclusion  we  might 
say  that  we  are  unable  to  contemplate  with  a  confidence  born 
of  great  optimism  the  results  which  would  follow  from  the 
adoption  and  enforcement  of  the  doctrine  urged  by  appellants. 
If  the  contract  in  this  case  is  subject  to  the  imposition  of  a 
transfer  tax,  then  any  contract  of  insurance  issued  to  a  non- 
resident, passing  to  and  held  by  his  non-resident  representatives 
or  assigns,  and  being  administered  and  enforceable  in  a  foreign 
jurisdiction,  whether  in  the  state  of  Texas  or  California,  or  in 
some  foreign  country,  would  afford  the  basis  of  taxation  in  this 
state,  provided  only  the  policy  was  issued  by  a  New  York  cor- 
poration and  access  could  be  obtained  by  the  tax  collector  to  its 
proceeds.  No  distance  of  domicile  of  the  assured  and  his  trans- 
ferees or  beneficiaries,  and  no  completeness  of  foreign  juris- 
diction over  administration  and  enforcement,  and  no  lack  of 
anticipation  of  such  a  result  upon  the  part  of  the  assured,  would 
be  a  bar  to  the  attempted  application  of  the  taxing  power.  It 
requires  no  great  imaginative  processes  to  picture  the  limits  and 
disapproval  and  friction  to  which  this  theory  would  lead  if 
logically  carried  to  its  full  length. 

"  It  was  undoubtedly  the  intent  of  the  legislature  that  the 
statute  under  consideration  should  be  liberally  construed  to  the 
end  of  taxing  the  transfer  of  all  property  which  fairly  and  reason- 
ably could  be  regarded  as  subject  to  the  same,  and  this  court  has 
unequivocally  placed  itself  upon  record  in  favor  of  construing 
the  statute  in  the  light  of  such  intent.  But  the  proposition  now 
propounded,  if  adopted,  would  lead  far  beyond  any  point  which 
has  thus  far  been  reached,  and  we  do  not  believe  that  it  would 
be  wise  or  practicable  to  adopt  it." 
Vide  subdivision  2  of  §§  220  and  243.  Matter  of  Rhoads,  190  N.  Y. 


332  THE    COURT   OF   APPEALS   DECISIONS 

525;  Matter  of  Abbett,  29  Misc.  567;  Matter  of  Horn,  39  id.  133;  Matter 
of  Gibbs,  60  id.  645;  Matter  of  Page,  N.  Y.  Law  Journal,  April  13,  1912, 
opinion  quoted  sub  Chose  in  Action. 

As  to  life  insurance  on  life  of  resident,  Matter  of  Knoedler,  140  N.  Y. 
377;  Matter  of  Elting,  78  Misc.  692;  Matter  of  Parsons,  117  App.  Div. 
321.  As  to  gratuity  fund  vide  Matter  of  Fay,  25  Misc.  468. 


1906. 

MATTER  OF  GEORGE  T.  HANFORD,  186  N.  Y.  647,  af- 
firms, without  opinion,  113  App.  Div.  894,  which  affirms, 
without  opinion,  order  of  Supreme  Court  Justice,  granted 
without  opinion. 

Testator  died  a  resident  March  12,  1902.  Transfer  tax  pro- 
ceedings were  held  and  the  transfer  to  the  respondent  Laura  H. 
Briggs  was  taxed  at  five  per  cent,  and  the  tax  was  paid  at  that 
rate.  Thereafter,  the  Appellate  Division  reduced  the  tax  from 
five  to  one  per  cent.  The  comptroller  offered  to  refund  the 
difference  in  the  tax  but  the  respondent  insisted  that  she  was 
entitled  to  interest,  and  instituted  this  proceeding  to  compel  the 
comptroller  to  pay  interest. 

A  peremptory  mandamus  was  granted  by  the  Justice  of  the 
Supreme  Court  sitting  at  a  Special  Term  in  Albany,  which 
directed  that  the  comptroller  pay  interest. 

Vide  §  225.    Vide  footnote,  page  290,  Matter  of  O'Berry,  179  N.  Y.  285. 


1906. 

MATTER  OF  EMILY  M.  LORD,  186  N.  Y.  649,  affirms, 

without  opinion,  111  App.  Div.  162 ;  sustained  in  211  U.  S. 

477,  sub  nom.  Beers  v.  Glynn. 

The  husband  of  testatrix  died  a  resident  of  New  Jersey  Jan- 
uary 8,  1892,  and  his  will  was  duly  admitted  to  probate  hi  that 
State.  Ten  days  after  his  death  and  before  the  probate  of  his 
will,  testatrix  died  a  resident  of  New  Jersey.  By  his  will  he 
gave  all  of  his  estate  to  his  wife,  Emily  M.  Lord,  and  he  also 
exercised  the  power  of  appointment  of  certain  property  held  by 
trustees  in  favor  of  his  wife.  Edward  C.  Lord,  the  husband, 
owned  no  real  property  within  this  State,  and  as  the  statute 
at  that  time  provided  no  means  of  assessing  and  collecting  a  tax 
upon  property  of  a  non-resident  not  owning  real  estate  within 


186  N.  Y.  549  333 

this  State  the  transfer  of  his  property  was  not  taxable.  (Matter 
of  Embury,  19  App.  Div.  214;  affirmed  on  opinion  below, 
154  N.  Y.  746.) l 

The  testatrix  owned  real  estate  situated  in  the  State  of  New 
York  and  its  transfer  was  taxed  in  a  proceeding  brought  several 
years  prior  to  the  present  proceeding  (folio  13  of  printed  papers 
on  appeal  to  Court  of  Appeals). 

After  the  will  of  Edward  C.  Lord  had  been  admitted  to  pro- 
bate in  the  State  of  New  Jersey,  the  surviving  executor  took  the 
property  of  the  decedent  that  was  within  this  State  to  the  State 
of  New  Jersey.  The  estate  of  Emily  M.  Lord  was  then  admin- 
istered in  the  State  of  New  Jersey  and  subsequently  distributed. 
Thereafter  in  September,  1901, .the  Comptroller  of  the  State  of 
New  York,  alleging  that  the  decedent  was  seized  of  personal 
property  in  the  State  of  New  York  at  the  time  of  her  death, 
applied  to  the  surrogate  to  designate  an  appraiser  to  appraise 
the  personal  property  of  the  decedent  within  this  State,  only 
the  real  estate  having  been  taxed  in  the  first  proceeding.  This 
second  proceeding  resulted  in  an  order  taxing  the  legatees  under 
the  last  will  and  testament  of  Emily  M.  Lord,  deceased,  and  from 
that  order  two  of  the  beneficiaries  appeal. 

The  court  say,  page  153:  "There  are  three  separate  funds 
involved.  First,  a  trust  fund  created  by  a  trust  deed  of 
March  13,  1873,  the  income  thereof  to  be  paid  to  Edward  C. 
Lord  during  his  life,  with  the  power  to  dispose  of  the  corpus  of 
this  fund  by  a  last  will  and  testament.  By  his  last  will  and  tes- 
tament Edward  C.  Lord  exercised  this  power  in  favor  of  his  wife, 
and  by  this  exercise  of  the  power  of  appointment  the  title  to  this 
trust  fund  vested  in  her  and  passed  under  her  will.  Second,  a 
trust  created  by  the  will  of  Susan  Lord,  who  died  in  1880,  the 
income  of  which  was  to  be  paid  to  Edward  C.  Lord  during  his 
life,  with  a  power  of  appointment  of  the  remainder  after  his 
death.  This  he  exercised  in  favor  of  his  wife,  the  decedent, 
and  that  property  thus  vested  in  her  and  passed  under  her  will. 
And,  third,  the  property  bequeathed  by  Edward  C.  Lord  to  the 
decedent,  his  wife,  which  was  subsequent  to  her  death  realized 
by  the  executor  of  Edward  C.  Lord,  and  the  proceeds  of  the 
property  paid  by  him  to  the  executors  of  Emily  M.  Lord. 

"  There  is  a  distinction  between  the  liability  to  taxation  of  the 
property  acquired  by  the  testatrix  by  the  power  of  appointment 
contained  in  the  will  of  her  husband  and  the  property  that  her 
estate  received  directly  under  her  husband's  will.  The  property 


334  THE   COURT   OF   APPEALS   DECISIONS 

that  the  estate  of  the  testatrix  received  as  the  appointee  of  the 
power  vested  in  her  husband  consisted  of  the  first  and  second 
classes  as  before  stated,  and  will,  therefore,  be  considered  sepa- 
rately from  the  third  class  of  property  acquired  by  the  executors 
of  the  testatrix  as  property  bequeathed  to  her  by  her  husband. 
The  property  under  the  first  trust  created  hi  1873  was  appraised 
by  the  appraiser  at  the  value  of  $5,970,  and  the  property  con- 
stituted by  the  trust  of  Susan  Lord  in  1880  was  appraised  at 
$92,840.98.  At  the  time  of  Edward  C.  Lord's  death  this  prop- 
erty was  held  by  trustees  who  were  residents  of  this  State,  and 
the  property  was  in  this  State.  Upon  the  exercise  of  the  power 
of  appointment  by  Edward  C.  Lord  the  title  to  that  property 
vested  absolutely  in  his  wife,  her  title  relating  back  to  the  deed 
and  will  creating  the  trusts,  and  immediately  upon  the  death  of 
Edward  C.  Lord  the  title  of  the  testatrix  became  absolute 
in  the  trust  property.  The  property  constituting  these  trust 
funds  that  was  hi  this  State  at  the  time  of  her  death  and  which 
was  transferred  by  her  last  will,  was  clearly  taxable  under 
chapter  483  of  the  Laws  of  1885,  as  amended  by  chapter  713 
of  the  Laws  of  1887,  and  chapter  215  of  the  Laws  of  1891,  in 
force  at  the  time  of  the  death  of  the  testatrix.  I,  therefore, 
agree  with  the  court  below  that  the  property  thus  held  by  the 
trustee  within  this  State  as  the  property  of  the  testatrix  was 
taxable.  As  to  the  property  of  Edward  C.  Lord,  which  under 
his  will  passed  to  the  decedent,  and  which  under  her  will  passed 
to  her  legatees,  a  different  question  is  presented.  *  *  * 

"There  can  be  no  question  but  that  certain  personal  property 
which  belonged  to  her  husband  was  at  the  time  of  his  death 
within  this  State,  and  was  not  removed  from  this  State  until 
after  the  death  of  Mrs.  Lord.  Upon  the  death  of  Edward  C. 
Lord,  Mrs.  Lord  became  entitled  under  his  will  as  residuary 
legatee  to  all  of  his  property.  *  *  * 

"  (Page  157.)  As  was  said  by  Judge  Vann  in  Matter  of  Houd- 
ayer  (150  N.  Y.  41):  'A  reasonable  test  in  all  cases,  as  it  seems 
to  me,  is  this:  Where  the  right,  whatever  it  may  be,  has  a  money 
value  and  can  be  owned  and  transferred,  but  cannot  be  enforced 
or  converted  into  money  against  the  will  of  the  person  owing 
the  right  without  coming  into  this  State,  it  is  property  within 
this  State  for  the  purposes  of  a  succession  tax.' 

"  If  this  is  the  crucial  test  it  would  seem  that  this  claim  against 
the  estate  of  an  executrix  appointed  in  the  State  of  New  Jersey 
was  never  property  within  this  State,  no  matter  where  the  prop- 


181  N.  Y.  586  335 

erty  was  located  which  constituted  the  estate  of  Edward  C. 
Lord.  Under  this  decision,  if  Mr.  Lord  had  been  a  resident  of 
this  State,  or  if  a  mode  had  been  provided  for  assessing  the  value 
of  his  personal  property  at  the  time  of  his  death,  his  personal 
property  which  was  hi  this  State  would  have  been  taxable.2 
The  right  that  Mrs.  Lord  had  hi  his  estate,  however,  was  not  a 
right  to  the  particular  personal  property  which  Mr.  Lord  had, 
but  a  right  to  the  balance  of  the  proceeds  of  Mr.  Lord's  property 
after  the  payment  of  his  debts  and  the  expense  of  administration 
of  his  estate.  That  right  at  the  death  of  Mrs.  Lord  was  solely  a 
claim  against  the  executor  of  Mr.  Lord's  estate  and  was  not, 
therefore,  as  I  view  it,  property  within  this  State  at  the  time  of 
the  death  of  Mrs.  Lord." 

The  executor  refused  to  answer  questions  "regarding"  prop- 
erty of  decedent  on  the  ground  "that  to  answer  the  question 
would  submit  me  to  a  forfeiture  or  penalty"  (folio  129  of  printed 
papers  on  appeal).  Surrogate  Thomas  held  (N.  Y.  Law  Journal, 
July  9,  1902)  that  the  second  sentence  of  §  837  of  the  Code  of 
Civ.  Pro.  did  not  apply,  and  that  the  executor  should  answer.  3 

1  Vide  Matter  of  Clinch,  44  Misc.  190,  affirmed,  180  N.  Y.  300,  a  case  where 
the  decedent  died  after  the  amendment,  chapter  399,  Laws  of  1892,  which 
remedied  the  jurisdictional  defect  of  the  statute  re  non-resident  estates. 
Section  228. 

2Etiam  Matter  of  Keeney,  194  N.  Y.  281-286;  Matter  of  Fearing,  200 
N.  Y.  340-344;  Matter  of  Armstrong,  N.  Y.  Law  Journal,  February  20, 
1912,  opinion  quoted  sub  Legacy,  page  733.  Vide  subdivision  2  of  §  220 
and  §  243,  amended  by  Laws  of  1911,  chapter  732,  in  effect  July  21,  1911. 

8  Matter  of  David  Kennedy,  113  App.  Div.  4-9;  Matter  of  Bishop,  82 
App.  Div.  112. 


1906. 

MATTER  OF  WAGER  J.  HULL,  186  N.  Y.  586,  affirms,  with- 
out opinion,  111  App.  Div.  322,  which  reverses  47  Misc. 
567. 

Caroline  C.  Hull  died  a  resident  January,  1874,  and  by  her 
will  bequeathed  to  her  son,  Wager  J.  Hull,  the  life  income  in 
four-thirteenths  of  her  property,  with  a  power  of  appointment 
as  to  the  principal  of  said  fund. 

At  the  death  of  said  Caroline  C.  Hull,  the  said  four-thirteenths 
of  her  estate  consisted  of  an  undivided  interest  hi  real  estate 
belonging  to  her  father,  Richard  M.  Cooper,  a  resident  of  the 
State  of  New  Jersey,  but  for  a  long  time  subsequent  to  her  death 


336  THE   COURT   OF   APPEALS   DECISIONS 

the  said  four-thirteenths  of  her  estate  had  been  converted  into 
cash  and  had  remained  in  that  form,  or  had  been  invested  in 
bonds  and  mortgages  on  property  in  New  Jersey.  Wager  J. 
Hull  died  a  resident  April  5,  1902,  and  exercised  the  power  of 
appointment  in  favor  of  his  wife  Ida  M.  Hull. 

The  appraiser  taxed  the  transfer  of  the  property,  and  the 
surrogate  reversed  the  decree  affirming  the  report.  The  court 
say,  page  324:  "We  are  of  opinion  that  the  learned  surrogate 
has  fallen  into  error  in  reversing  the  original  decree  in  this 
matter,  due  to  the  confusion  of  the  question  by  an  entirely 
irrelevant  detail  in  relation  to  the  situs  of  the  property  which 
passed  to  said  Ida  M.  Hull.  The  question  is  not  where  the 
property  was  located,  or  whether  it  was  real  estate  or  personal 
property,  but  whether  the  beneficiary  came  into  its  possession 
through  the  exercise  of  a  privilege  conferred  by  the  State  of 
New  York.  *  *  * 

"(Page  326.)  Ida  M.  Hull  gets  all  of  her  rights  in  and  to  the 
property  by  reason  of  the  exercise  of  the  power,  a  privilege 
granted  by  the  State  of  New  York,  and  she  may  not  be  relieved 
from  that  obligation  because  of  the  fact  that  the  property  itself 
was  without  the  jurisdiction  of  the  State  at  the  time  the  power 
was  exercised." 

Vide  subdivision  6  of  §  220.  Matter  of  Kissel,  65  Misc.  443-445,  affirmed, 
without  opinion,  142  App.  Div.  934;  Matter  of  Fearing,  200  N.  Y.  340; 
Matter  of  Dwight,  N.  Y.  Law  Journal,  October  8,  1911,  opinion  quoted 
sub  Trust  Deed,  page  872;  affirmed,  without  opinion,  149  App.  Div.  912; 
Matter  of  Frazier,  N.  Y.  Law  Journal,  March  28,  1912,  opinion  quoted  sub 
Power  of  Appointment,  page  778;  Matter  of  Seaman,  id.,  December  5, 1913, 
opinion  quoted,  page  780. 


1907. 

MATTER  OF  FREDERICK  COOK,  187  N.  Y.  253,  reverses 
114  App.  Div.  718,  and  affirms  60  Misc.  487,  as  modified. 

Testator  died  a  resident  February  17,  1905.  The  widow  and 
daughter  in  good  faith  filed  objections  to  the  probate  of  the  will, 
the  principal  ground  of  which  was  that  the  testator  did  not 
possess  testamentary  capacity.  The  parties  agreed  to  a  com- 
promise by  which  the  residuary  of  the  estate  over  the  sum  of 
$97,000  should  pass  to  Mrs.  Cook  upon  the  final  distribution  of 
the  estate.  In  other  words,  the  residuary  legatees,  for  the 
purpose  of  securing  the  probate  of  the  will,  by  which  they  would 


187  N.  Y.  253  337 

receive  the  payment  to  them  of  general  legacies  bequeathed  to 
them,  amounting  to  $180,000,  voluntarily  renounced  all  of  the 
residuary  of  the  estate  except  the  sum  of  $97,000. 

The  court  say,  page  256:  "By  the  appeal  of  the  comptroller 
the  question  is  presented  whether  the  transfer  tax  upon  the 
residuary  estate  should  be  at  the  rate  of  one  per  cent,  as  fixed  by 
the  Appellate  Division,  or  five  per  cent,  as  fixed  by  the  surrogate. 
The  tax  was  reduced  upon  the  theory  that  the  compromise  was  a 
renunciation  by  the  residuary  legatees  of  their  interest  in  the 
residuary  estate,  and  this  conclusion  was  reached  in  reliance 
upon  the  recent  case  of  Matter  of  Wolfe  (89  App.  Div.  348; 
179  N.  Y.  599).  *  *  * 

"(Page  258.)  The  facts  in  the  present  case  are  utterly  differ- 
ent in  their  nature  and  in  the  legal  effect  thereof.  Here  the 
transfer  of  the  residuary  estate  was  to  the  residuary  legatees 
named  in  the  will.  They  neither  renounced  nor  refused  to  ac- 
cept. On  the  contrary,  they  accepted  the  bequest,  not  in  express 
terms,  but  by  necessary  implication,  for  they  transferred  the 
same  to  the  widow  who  accordingly  took  the  residuary  estate 
not  through  transfer  by  the  will,  but  through  transfer  by  the 
assignment.  While  they  could  renounce  they  could  not  assign 
without  accepting.  The  testator  gave  the  residuum  to  his 
nephews  and  nieces  and  they  sold  it  to  the  widow,  who  paid  a 
large  sum  of  money  therefor.  *  *  * 

"  (Page  259.)  The  compromise  did  not  change  the  will.  No 
settlement  could  change  a  word  that  the  testator  wrote.  The 
will  stands  as  it  was  written,  and  the  most  solemn  instrument, 
executed  by  all  parties  interested,  could  not  convert  a  bequest 
to  the  nephews  and  nieces  into  a  bequest  to  the  widow.  *  *  * 
A  succession  tax  is  measured  by  the  legal  relation  which  the 
legatee  bears  to  the  testator  and  is  not  affected  by  the  relation 
which  an  assignee  of  the  legatee  bears  to  him.  Here  the  legatees 
took  the  residuum  under  the  will.  They  succeeded  the  testator 
in  the  ownership  thereof  and  their  succession  gives  rise  to  the 
tax.  The  widow  did  not  take  the  residue  from  the  testator, 
for  he  did  not  give  it  to  her.  She  took  as  assignee,  not  as  legatee. 
Unless  she  took  as  assignee,  she  did  not  take  at  all.  The  legatees 
assigned  to  her  and  the  rate  of  taxation  is  fixed  by  their  relation 
to  the  testator.  As  she  did  not  take  through  the  will,  the  suc- 
cession tax  cannot  be  fixed  at  the  rate  of  one  per  cent,  as  in  the 
case  of  a  bequest  to  a  widow,  but  must  be  fixed  at  the  rate  of 
five  per  cent,  as  in  the  case  of  a  bequest  to  nephews  and  nieces." 
22 


338  THE   COURT   OF   APPEALS   DECISIONS 

The  testator  left  a  legacy  to  the  son  of  his  adopted  daughter, 
and  it  was  held  that  he  was  a  lineal  descendant  in  the  eye  of 
the  law,  the  court  saying,  page  262,  that  the  transfer  to  him 
"was  subject  to  taxation  at  the  same  rate  as  if  his  mother  had 
sprung  from  the  loins  of  the  testator."  * 

Surrogate  Brown  of  Monroe  County  passed  upon  the  question 
of  the  value  of  certain  stocks.2  His  order  in  this  respect  was 
affirmed,  187  N.  Y.  253-262.  In  his  opinion  he  said,  50  Misc. 
487--193:  "The  appellants  also  appeal  from  that  portion  of  the 
order  fixing  the  tax  on  said  estate,  on  the  ground  that  certain 
stocks  should  be  reduced  by  ten  per  cent,  from  the  value  fixed 
by  the  appraiser,  for  the  reason  that  the  stocks  included  in  said 
appeal  are  local  stocks  and  not  listed  on  any  stock  market  other 
than  the  Rochester  Stock  Exchange,  and  that  the  valuation 
placed  upon  said  stocks  and  based  upon  the  quotations  of  said 
market  at  or  about  the  time  of  the  death  of  Frederick  Cook 
should  be  reduced  ten  per  cent  to  reach  their  fair  market  value; 
and  we  are  referred  to  the  Curtice  case,  decided  by  the  Appel- 
late Division,  Fourth  Department  (111  App.  Div.  230),  and  just 
recently  affirmed  by  the  Court  of  Appeals,  as  an  authority  for 
such  reduction. 

"The  stocks  referred  to  are  the  American  Fruit,  preferred, 
Case  Manufacturing  Company,  Ohmer  Car  Register,  pre- 
ferred, Rochester  Telephone,  New  York  &  Kentucky,  common, 
New  York  &  Kentucky,  preferred,  Pneumatic  Signal,  Stromberg- 
Carlson,  common,  Stromberg-Carlson,  preferred,  General  Rail- 
way Signal  Company,  preferred,  General  Railway  Signal  Com- 
pany, common.  The  appraiser  fixed  these  stocks  substantially 
as  fixed  by  the  witness  who  was  called  by  the  executors,  and  who 
had  been  one  of  the  appraisers  who  inventoried  the  property  of 
the  estate  of  Frederick  Cook  upon  the  statutory  inventory 
taken  by  the  executors  with  the  aid  of  the  appraisers  appointed 
by  the  surrogate  for  that  purpose;  and  it  appears  that  he  fixed 
those  values  at  the  market  value  of  the  respective  stocks  on  the 
Rochester  Stock  Exchange,  on  or  about  the  date  of  the  death  of 
Frederick  Cook,  deceased,  except  in  one  or  two  instances  where, 
there  being  no  quotation  on  the  Rochester  market,  he  have 
his  own  opinion  or  sought  information  from  interested  parties 
who  were  conversant  with  the  affairs  of  such  corporation,  and 
from  such  information  fixed  the  value  as  to  such  stock.  He  also 
testified  that,  if  these  stocks  were  offered  for  immediate  sale, 
the  price  would  drop  from  ten  to  fiftj  points,  but  he  further 


187  N.  Y.  253  339 

testified  'It  would  take  at  least  a  month  or  six  weeks  to  close 
out  these  stocks  at  the  prices  I  have  quoted  in  the  inventory.' 
There  was  no  necessity  for  the  disposal  of  those  stocks  by  the 
executors  in  a  month  or  six  weeks.  In  fact,  the  executors  could 
not  dispose  of  them  until  after  the  probate  of  the  will,  and  even 
then  they  would  not  be  required,  and  hi  fact  it  would  be  contrary 
to  good  business  judgment,  to  throw  a  large  amount  of  stock  on 
the  market  at  once,  unless  there  was  special  reason  for  so  doing. 

"In  the  Curtice  case  over  a  third  of  the  capital  stock  of  the 
corporation  in  question  was  owned  by  the  testator,  and  hi  the 
neighborhood  of  another  third  by  his  brother,  and  accord- 
ingly it  was  spoken  of  as  a  'private  corporation'  by  Justice 
Hiscock  in  his  opinion,  delivered  with  the  decision  of  the  Appel- 
late Division,  and  for  the  reasons  above  stated  the  stock  in 
the  Curtice  Company  was  not  necessarily  worth  the  quotations 
of  the  stock  market,  and  from  those  facts  the  Appellate  Division 
reduced  the  valuation  of  the  stock  as  appraised  on  the  Rochester 
stock  market  valuation. 

"  It  does  not  seem  to  me  that  the  Curtice  case  applies  to  the 
Cook  case.  All  of  the  above  stocks  owned  by  the  Cook  estate, 
although  local  stocks,  are  not  stocks  that  could  be  classed  as 
stocks  of  private  corporations  or  as  corporations  largely  owned 
by  one  family.  There  is  no  evidence  that  Mr.  Cook's  holding 
was  a  large  percentage  of  the  total  capitalization  of  said  com- 
panies. Several  of  the  stocks  are  stocks  of  large  corporations 
engaged  in  important  enterprises  and  apparently  doing  a  pros- 
perous business,  and  the  rest  of  the  companies  that  do  not  come 
under  that  head  are  small  companies,  as  to  which  there  is  no 
evidence  that  Mr.  Cook's  interest  therein  was  so  large  as  to 
affect  the  market  values  of  the  stocks. 

•"I  accordingly  hold  that  the  stocks  in  question  do  not  come 
under  the  conditions  which  obtained  hi  the  Curtice  case,  and 
that  the  value  of  said  stocks  as  fixed  by  the  appraiser,  and 
subsequently  fixed  by  the  order  entered  herein,  is  correct,  and 
that  portion  of  the  order  fixing  the  tax  thereon  should  be 
affirmed." 

Vide  §  221a.  Matter  of  Cook,  194  N.  Y.  400;  Matter  of  Duryea,  128 
App.  Div.  205-206;  Matter  of  Merritt,  155  App.  Div.  228-232;  Matter  of 
Yerkes,  N.  Y.  Law  Journal,  December  5,  1912,  and  Matter  of  Lawrence, 
id.,  February  15,  1913,  quoted  sub  Compromise  of  Claim;  Matter  of 
Thomas,  39  Misc.  223;  Matter  of  Marks,  40  Misc.  507. 

1  Matter  of  Roebuck,  79  Misc.  589. 

2  Vide  cases  cited  sub  Closely  Held  Stock. 


340  THE   COURT   OF   APPEALS   DECISIONS 

1907. 

MATTER  OF  GEORGE  HESS,  187  N.  Y.  554,  affirms,  on 
opinion  of  Spring,  J.,  below,  110  App.  Div.  476. 

Testator  died  a  resident  August,  1904.  He  was  eighty  years 
old  when  he  died,  and  on  February  20,  1904,  he  entered  into  a 
written  agreement  with  Silas  L.  Strivings  (page  477)  "whereby 
Strivings  agreed  to  remove  with  his  wife  to  the  farm  of  Hess  in 
the  town  of  Castile,  occupying  the  dwelling  in  common  with 
Hess  and  his  wife,  supporting  and  caring  for  them  during  their 
natural  lives.  Strivings  agreed  to  'reside  upon  and  work'  said 
farm  as  long  as  said  Hess  'and  his  said  wife,  or  either  of  them 
shall  live.'  By  the  terms  of  the  contract  the  party  of  the  second 
part  was  to  harvest  and  thresh  the  wheat  growing  upon  the 
farm,  using  whatever  remained  beyond  the  needs  of  the  farm 
and  the  family  use  for  his  own  benefit.  The  party  of  the  first 
part  was  to  market  the  '  salable  wood  now  cut  on  said  premises' 
for  the  benefit  of  said  second  party  and  was  also  to  sell  'any 
surplus  of  grain  not  needed  for  use.' 

"  In  consideration  of  the  agreement  it  was  provided  that  Hess 
'does  hereby  grant  and  convey,  subject  to  said  agreements,  to 
said  Silas  L.  Strivings  and  Mae  L.  Strivings,  his  wife,'  the  farm 
mentioned,  describing  it  by  metes  and  bounds,  together  with  the 
stock  and  personal  property  thereon.  The  'right  to  support, 
maintenance  and  residence  on  said'  farm  was  reserved  during  the 
life  of  said  Hess  and  his  wife,  and  Strivings  and  his  wife  agreed 
not  to  sell  said  premises  during  the  lifetime  of  the  grantor  or 
his  wife. 

"On  the  same  day  that  this  contract  was  executed  Mr.  Hess 
executed  his  last  will  and  testament,  bequeathing  the  bulk  of 
his  property,  amounting  to  about  $70,000,  to  Mrs.  Strivings, 
appointing  Silas  L.  Strivings  executor  thereof  and  also  in  said 
instrument  ratifying  and  confirming  the  agreement  now  under 
consideration." 

The  court  say,  page  477:  "We  think  that  by  this  agreement 
and  conveyance  it  was  intended  to  vest  the  absolute  title  and 
immediate  possession  of  said  premises  in  the  Strivings,  subject 
to  the  maintenance  of  the  grantor  and  his  wife.  *  *  * 

"  (Page  478.)  There  is  no  suggestion  that  the  conveyance 
was  hi  contemplation  of  death." 

The  court  cite  Matter  of  Brandreth,  169  N.  Y.  437,  and  Matter 
of  Cornell,  170  N.  Y.  423,  and  say,  page  481:  "The  dividing 


188  N.  Y.  274  341 

line  between  those  cases  and  the  present  one  is  well  defined. 
In  the  present  case  the  title  in  possession  and  the  use  of  the 
avails  and  the  increment  passed  to  the  grantees.  In  the  other 
class  of  cases  the  beneficial  enjoyment  did  not  commence  until 
the  death  of  the  donor  and  there  is  also  the  further  fact  that  the 
conveyance  to  the  Strivings  was  for  an  adequate  consideration. 
In  each  of  the  cases  mentioned  the  transfer  was  unquestionably 
a  gift,  and  it  is  to  that  class  of  transfers  to  which  this  tax 
relates." 

Vide  subdivision  4  of  §220.  Matter  of  Jones,  65  Misc.  121;  Matter  of 
Dobson,  73  Misc.  170;  Matter  of  Loewi,  75  Misc.  57;  Matter  of  McKeon, 
N.  Y.  Law  Journal,  June  8,  1912,  opinion  quoted  sub  Contemplation  of 
Death,  page  647;  Matter  of  Victor,  id.,  May  8,  1913,  opinion  quoted  sub 
Good  Will,  page  714;  Matter  of  Dee,  id.,  December  6, 1913,  opinion  quoted 
page  645. 


1907. 

MATTER  OF  GEORGE  W.  KIDD,  188  N.  Y.  274. 

Testator  died  December  3,  1901,  and  his  will  was  admitted  to 
probate  April  5, 1903.  By  his  will  he  created  a  number  of  trusts, 
the  ultimate  remainders  in  which  were  contingent.  The  details 
of  the  will  are  immaterial.  After  transfer  tax  proceedings  were 
instituted  an  agreement  was  entered  into  in  March,  1905, 
between  the  executor  and  the  state  comptroller,  under  the  pro- 
visions of  §  230a  (now  233)  of  the  Tax  Law,  compromising  the 
tax  at  the  sum  of  $10,000,  which  was  paid  to  the  comptroller. 

In  July,  1903,  the  respondent,  Grace  G.Dickinson,  commenced 
an  action  in  the  Supreme  Court  against  the  executor,  the  heirs 
and  next  of  kin,  the  legatees  and  devisees  of  the  decedent,  for 
the  specific  performance  of  an  ante-nuptial  contract  made  by 
the  decedent,  her  stepfather,  with  her  mother,  in  and  by  which 
he  agreed,  in  consideration  for  her  mother's  marrying  him  on  the 
19th  day  of  November,  1875,  and  advancing  to  him  for  use  in 
his  business  the  sum  of  $40,000,  among  other  things,  that  he 
would  adopt  said  Grace  G.  Dickinson  and  give  her  his  name  and 
make  her  his  heir,  and  in  the  event  that  he  died  without  issue 
of  said  marriage,  which  event  in  fact  transpired,  he  would  will, 
bequeath  and  devise  to  her  all  of  his  property.  The  issues  in 
said  action  were  duly  tried  and  on  the  16th  day  of  May,  1905,  a 
decree  was  duly  entered  therein  establishing  the  validity  of 
said  ante-nuptial  contract  and  decreeing  that  the  defendants 


342  THE   COURT  OF  APPEALS   DECISIONS 

specifically  perform  the  same  by  assigning,  transferring  and 
delivering  to  her  any  and  all  property  of  the  estate  remaining 
in  their  hands  and  to  account  to  her  for  any  thereof  received  by 
them  which  for  any  reason  they  are  unable  to  turn  over  to  her. 

The  court  say,  page  278:  "While  the  principal  argument 
before  us  has  been  devoted  to  the  question  whether  the  compro- 
mise made  between  the  executor  and  the  comptroller  can  now  be 
set  aside  or  attacked  collaterally,  we  do  not  find  it  necessary  to 
consider  the  question  since  we  are  of  opinion  that,  giving  full 
effect  to  the  judgment  in  the  Supreme  Court  action,  neverthe- 
less the  estate  is  liable  to  the  transfer  tax.  The  contract  between 
the  plaintiff's  mother  and  the  deceased,  which  has  been  en- 
forced by  the  judgment  of  the  Supreme  Court,  was  to  bequeath 
and  devise  to  his  step-daughter  by  will,  either  the  whole  prop- 
erty he  might  leave  or  a  portion  of  it  dependent  upon  the 
existence  of  other  children.  It  was  not  a  contract  to  convey, 
but  a  contract  to  make  a  will  in  her  favor.  Had  the  deceased 
performed  his  agreement  and  given  her  his  property  by  will  the 
estate  would  have  been  subject  to  the  tax.  *  *  * 

"  (Page  279.)  The  present  case  plainly  differs  in  principle  from 
those  cited  by  the  learned  counsel  for  the  respondent,  such  as 
Matter  of  Pell  (171  N.  Y.  48);  Matter  of  Baker  (178  N.  Y.  575, 
affg.  83  App.  Div.  530,  on  opinion  below);  Matter  of  Craig 
(181  N.  Y.  551,  affg.  97  App.  Div.  289,  on  opinion  below),  and 
Matter  of  Lansing  (182  N.  Y.  238).  In  the  Pell  case  the  re- 
mainderman claimed  under  the  will  which  had  taken  effect  by 
the  death  of  the  testator  in  1863.  The  estate  vested  in  title 
though  not  in  possession  at  that  time.  It  was  at  all  times 
alienable  by  the  remainderman  and  also  devisable  and  descend- 
able, unless  the  limitations  of  the  remainder  were  such  as  to  make 
it  fail  on  his  death.  This  is  true  of  the  other  cases  cited.  Mrs. 
Dickinson  had  no  such  interest  in  the  estate  of  the  deceased. 
While  the  testator  could  not  have  conveyed  it  in  fraud  of  her 
rights,  he  could  have  entirely  consumed  it  in  living  expenses 
or  by  speculation." 

Vide  §  233.  As  to  right  of  comptroller  to  compromise  vide  dicta  of  the 
Appellate  Division  in  this  case,  115  App.  Div.  205-208. 

Matter  of  Demere,  41  Misc.  470,  discussed  sub  Ante-nuptial  Contract, 
page  589. 


188  N.  Y.  635  343 

1907. 

MATTER  OF  DAVID  WOLFE  BISHOP,  188  N.  Y.  635,  dis- 
misses without  opinion,  appeal  from  111  App.  Div.  545. 

Appeal  dismissed  because  not  from  a  final  order.  Code  of 
Civil  Procedure,  subdivision  1  of  §  190. 

Testator  died  May  1,  1900.  The  executors  contended  that 
testator  was  a  non-resident,  and  refused  to  supply  appraiser 
with  an  account  of  testator's  property  not  situated  within  the 
State.  Appraiser  thereupon  reported  to  surrogate  that  the 
testator  was  a  resident  of  the  State  of  New  York;  that  he  had 
appraised  the  estate  of  the  testator,  so  far  as  disclosed  to  him, 
subject  to  taxation,  and  specified  the  property  and  its  value. 
He  further  reported  that  the  testator  died  seized  of  other  estate, 
both  real  and  personal,  but  that  the  executors  had  declined  to 
furnish  the  appraiser  with  a  statement  of  the  same  or  to  give 
testimony  as  to  the  character  thereof,  and  that  for  that  reason 
he  was  unable  to  make  any  report  in  respect  thereto. 

The  court  say,  page  546 :  "  Upon  this  report  coming  on  before 
the  Surrogate's  Court  for  hearing,  the  surrogate  denied  the  mo- 
tion to  confirm  the  finding  of  the  appraiser  that  the  testator  was 
at  the  time  of  his  death  a  resident  of  the  State  of  New  York,  and 
ordered  that  the  question  of  such  residence  be  referred  to  a  ref- 
eree, who  was  directed  to  take  the  testimony  in  respect  thereto, 
and  to  report  the  same,  with  his  opinion  thereon,  to  the  court, 
and  that  the  motion  to  remit  the  matter  to  the  appraiser  to 
enable  him  to  appraise  all  the  assets  of  the  decedent  await  the 
determination  of  the  surrogate  upon  the  coming  in  of  the  report 
of  the  referee.  The  surrogate  then  fixed  the  value  of  the  property 
within  the  State  of  New  York  and  the  tax  payable  thereon, 
and  from  this  order  the  Comptroller  appeals.  He  insists  that 
the  surrogate  was  bound  to  determine  the  question  of  the  res- 
idence of  the  testator  upon  the  testimony  before  the  ap- 
praiser, and  that  he  had  no  power  to  refer  that  question  to 
a  referee." 

The  court  quotes  (page  547)  §  2546  of  the  Code  of  Civil  Pro- 
cedure, and  holds  that  surrogate  had  authority,  under  that 
section,  to  appoint  a  referee  to  take  evidence  as  to  residence  of 
testator. 

Vide  Matter  of  Bishop,  82  App.  Div.  112.  As  to  question  of  residence 
vide  Tilt  v.  Kelsey,  207  U.  S.  43,  reversing  Matter  of  Tilt,  182  N.  Y.  557; 
Matter  of  Cummings,  142  App.  Div.  377;  Matter  of  White,  116  App.  Div. 


344  THE    COURT   OF   APPEALS   DECISIONS 

183.    As  to  recital  in  will  vide  Matter  of  Schumacher,  N.  Y.  Law  Journal, 
July  22,  1913,  opinion  quoted  page  834. 

Vide  etiam  Matter  of  Grant,  N.  Y.  Law  Journal,  November  14,  1913, 
opinion  quoted,  post,  page  833;  etiam  same  estate,  id.,  December  9,  1913. 


1907. 

MATTER  OF  MARY  COSTELLO,  189  N.  Y.  288. 

Intestate  died  a  resident  in  September,  1895.  Letters  of 
administration  were  issued  to  the  public  administrator  of  Kings 
county  in  March,  1896.  On  a  judicial  settlement  of  his  accounts 
in  December,  1896,  the  decree  showed  that  the  total  estate 
coming  to  his  hands  after  the  deduction  of  debts  and  expenses 
of  administration  was  a  balance  of  $654.90  to  be  distributed  to 
the  next  of  kin  of  decedent.  The  sister  was  entitled  to  one-half 
of  this  balance,  or  $327.45,  and  the  nieces  each  to  one-fourth 
thereof,  or  $163.72.  Held,  that  the  shares  of  the  nieces  were 
taxable. 

The  court  say,  page  290:  "A  preliminary  question  of  practice 
is  raised  for  our  consideration  which  arises  under  the  following 
circumstances:  The  Transfer  Tax  Act  (sections  231  and  232) 
provides  for  the  action  of  the  surrogate  in  a  dual  capacity.  By 
§  231  the  surrogate  is  permitted  to  act  as  a  taxing  officer  or 
appraiser  and  may  determine  the  cash  value  of  an  estate  and  the 
amount  of  tax  to  which  the  same  is  liable.  Section  232  provides 
that  the  comptroller  of  the  State  or  any  person  dissatisfied  with 
the  appraisement  or  assessment  and  determination  of  tax  may 
appeal  therefrom  within  sixty  days  to  the  surrogate  to  review 
the  same. 

"In  the  case  at  bar  the  learned  counsel  for  the  comptroller 
insisted  that  this  practice  was  anomalous  and  unnecessary;  that 
an  appeal  could  be  taken  from  the  surrogate,  acting  as  appraiser 
or  assessor,  directly  to  the  Appellate  Division,  and  he  accord- 
ingly in  order  to  test  this  question,  served  two  notices  of  appeal 
from  the  order  of  the  surrogate,  acting  as  appraiser,  wherein  he 
determined  that  the  estate  was  not  subject  to  the  transfer  tax, 
one  directly  to  the  Appellate  Division  and  the  other  to  the 
surrogate,  acting  judicially,  as  the  statute  provides.  The  Appel- 
late Division  dismissed  the  comptroller's  appeal  taken  directly 
to  that  court  from  the  order  of  the  surrogate  acting  as  an  as- 
sessor. On  the  comptroller's  appeal  taken  from  the  order  of  the 
surrogate,  acting  judicially,  the  same  was  reversed. 


189  N.  Y.  556  345 

"When  we  keep  in  mind  the  fact  that  the  surrogate  is  a  mere 
taxing  officer  or  assessor,  when  acting  under  §  231,  no  incon- 
gruity is  presented  although  it  is  somewhat  unusual  that  a 
judicial  officer  should  sit  in  review  of  his  own  decision  as  an 
assessor.  It  is,  however,  to  be  said  that  on  an  appeal  to  the 
surrogate,  acting  judicially,  a  complete  record  is  submitted  and 
both  sides  are  heard.  We  are  of  opinion  that  the  Appellate 
Division  properly  dismissed  the  comptroller's  appeal  from  the 
order  of  the  surrogate  made  when  acting  as  a  taxing  officer." 

As  to  Laws  of  1910,  chapter  706,  in  effect  July  11,  1910,  vide  Matter  of 
Jourdan,  206  N.  Y.  653;  Matter  of  Mason,  69  Misc.  280,  discussed  in  1 
State  Department  Reports,  559.  As  to  present  statute  vide  supra,  page  43. 


1907. 

MATTER  OF  LYDIA  M.  FRANCIS,  189  N.  Y.  654,  affirms, 
without  opinion,  121  App.  Div.  129. 

Held,  that  under  §  221  as  amended  by  chapter  368,  Laws  of 
1905,  a  bequest  of  money  to  Didymus  Thomas  Memorial  Li- 
brary Association,  a  New  York  library  corporation,  was  taxable. 

Vide  second  sentence  of  §  221.  Matter  of  Mergentime,  129  App.  Div. 
367-374,  affirmed,  on  opinion  below,  195  N.  Y.  572;  Matter  of  Saunders, 
77  Misc.  54-62,  affirmed,  without  opinion,  156  App.  Div.  891;  Matter  of 
de  Peyster,  N.  Y.  Law  Journal,  January  21,  1913,  opinion  quoted  sub 
Educational  Corporations,  page  676,  affirmed,  without  opinion,  156  App. 
Div.  938;  Matter  of  Higgins,  55  Misc.  175. 


1907. 

IN  THE  MATTER  OF  FIXING  THE  TRANSFER  TAX  UPON 
THE  REMAINDER  LIMITED  UPON  THE  LIFE  OF 
SARAH  M.  MASON,  UNDER  THE  WILL  OF  JOSEPH 
NAYLOR,  DECEASED,  189  N.  Y.  656,  affirms,  without 
opinion,  120  App.  Div.  738. 

Joseph  Naylor  died  June  7;  1897.  He  devised  certain  real 
estate  in  trust  for  his  wife  during  life,  and  directed  the  trustees 
upon  her  death,  to  hold  such  real  estate  upon  seven  separate 
trusts  for  the  benefit  of  his  seven  nephews  and  nieces  respec- 
tively, paying  to  each  the  net  income  of  one  equal  seventh  part 
during  his  or  her  life,  with  remainder  in  each  case  to  his  or  her 
surviving  lineal  descendants.  In  1898  an  appraiser  was  ap- 


346  THE    COURT   OF   APPEALS    DECISIONS 

pointed  and  he  filed  a  report  in  which,  inter  alia,  he  fixed  the 
value  of  the  life  estate  of  Sarah  Morgan  Mason,  one  of  the  nieces, 
and  imposed  a  tax  thereon.  The  value  of  the  remainder  limited 
upon  her  life  was  fixed  at  $22,316,  but  no  tax  was  imposed 
thereon  because,  according  to  his  report,  it  could  not  then  be 
definitely  ascertained  to  whom  such  remainder  would  ultimately 
descend.1 

The  court  say,  page  739:  "Sarah  Morgan  Mason  died  Novem- 
ber 27,  1905  leaving  the  appellants  Walter  R.  Mason  and  Edgar 
F.  Mason,  her  sons,  and  only  surviving  descendants.  They 
each  under  the  will  of  Joseph  Naylor,  became  entitled  to  one- 
half  of  the  one-seventh  given  to  their  mother  for  life.  Shortly 
after  the  mother's  death  they  applied  to  the  surrogate  for  an 
order  fixing  the  amount  of  the  transfer  tax  upon  the  remainder 
limited  upon  the  life  of  their  mother,  and  which  had  previously 
been  valued  by  the  appraiser  at  $22,316. 

"  The  statute  which  was  in  force  at  the  time  of  Naylor 's  death, 
under  and  by  which  the  transfer  tax  had  to  be  determined,  was 
chapter  284  of  the  laws  of  1897,  and  the  surrogate  held  that  the 
appellants  were  liable  to  pay  under  this  statute,  a  tax,  not  on 
the  value  of  the  remainder  as  determined  by  the  appraiser 
theretofore  appointed,  but  upon  the  value  of  the  real  estate 
passing,  undiminished  by  the  value  of  the  estate  of  their  mother. 

"  This  statute  provides  that  'Estates  in  expectancy  which  are 
contingent  or  defeasible  shall  be  appraised  at  their  full,  un- 
diminished value  when  the  persons  entitled  thereto  shall  come 
into  the  beneficial  enjoyment  or  possession  thereof,  without 
diminution  for  or  on  account  of  any  valuation  theretofore 
made  of  the  particular  estates  for  purposes  of  taxation,  upon 
which  said  estates  in  expectancy  may  have  been  limited.'  [Tax 
Law  (Laws  of  1896,  chap.  908),  §  230,  as  amd.  by  Laws  of  1897, 
chap.  284].2  *  *  * 

"  (Page  740.)  What  is  claimed  is  that  that  appraisement  hav- 
ing been  made,  and  the  State  being  represented,  an  error  of  law 
was  committed  which  could  only  be  corrected  by  appeal;  that 
no  appeal  was  taken  by  the  State,  and,  therefore,  it  is  not  in  a 
position  to  assert  that  that  order  was  erroneous;  in  other  words, 
that  that  order  is  res  adjudicata  as  to  the  value  of  the  estate 
passing  to  the  appellants.  The  value  of  the  estate  passing  to 
the  remaindermen  was  not  before  the  appraiser.  There  was  no 
necessity  for,  and  he  had  no  authority  to  pass  upon  that  ques- 
tion.3 *  *  *  (Page  741.)  The  fact  that  the  appraiser  under- 


189  N.  Y.  561  347 

took  to  determine  the  value  of  the  estate  which  would  ultimately 
pass  to  the  remaindermen  did  not  bind  them,  because  they  were 
not  represented,  and  if  it  did  not  bind  them,  I  do  not  see  how  it 
can  be  claimed  that  it  bound  the  State." 

JVide  sixth  paragraph  of  §230;  Matter  of  Vanderbilt,  172  N.  Y.  69. 

2  Matter  of  Kennedy,  93  App.  Div.  27;  Matter  of  Meyer,  83  App.  Div. 
381;  Matter  of  Connolly,  38  Misc.  533;  Matter  of  Hosack,  39  Misc.  130; 
paragraph  seventh  of  the  present  §  230;  etiam  Matter  of  Eno,  N.  Y.  Law 
Journal,  April  24,  1913,  opinion  quoted,  page  820. 

3  Matter  of  Irwin,  36  Misc.  277;  Matter  of  Ely,  157  App.  Div.  658; 
Matter  of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion  quoted  sub 
Power  of  Appointment,  page  772. 


1907. 

MATTER  OF  MEYER  GUGGENHEIM,  189  N.  Y.  661,  af- 
firms, without  opinion,  116  App.  Div.  914,  which  affirms, 
without  opinion,  order  of  Surrogates'  Court,  opinion  in 
New  York  Law  Journal  of  January  6, 1906. 

Testator  died  a  resident  March  16,  1905.  He  created  by  his 
will  a  trust  fund  for  his  granddaughter,  Nettie  Gerstle,  who  at 
the  time  of  his  death  was  fifteen  years  of  age  and  unmarried. 
She  was  to  receive  the  income  during  life,  and,  on  her  marriage, 
a  portion  of  the  principal.  The  will  then  provided:  "Upon  the 
death  of  my  said  grandchild,  the  whole  of  the  principal  fund  so 
held  in  trust,  *  *  *  shall  be  divided  equally  among  her 
children  her  surviving,  the  issue,  however,  of  any  deceased  child 
to  take  per  stirpes,  the  share  which  the  parent  would  have  taken 
if  living;  if  she  shall  leave  no  issue  her  surviving,  then  the  said 
principal  fund  so  held  hi  trust  shall  be  divided  into  two  equal 
shares."  One  of  the  shares  to  go  to  certain  charitable  and  hos- 
pital corporations. 

Surrogate  Thomas  said:  "The  remainder  interest  of  each  of 
the  corporations  is  fixed  at  $11,007.37,  and  the  order  assesses 
a  tax  thereon  of  five  per  cent.  At  the  time  of  decedent's  death 
bequests  to  charitable  and  hospital  corporations  were  subject 
to  said  tax  (Tax  Law,  §  221,  as  amended  in  1903).  By  chap- 
ter 368,  Laws  of  1905  (in  effect  June  1,  1905,  and  at  the  time 
of  the  appraisal),  such  corporations  are  specifically  exempted 
from  the  tax.1  The  corporations  contend  that  as  to  these  re- 
mainder interests  there  has  been  no  transfer,  and  that  there  will 
not  be  any  to  them  unless  Nettie  Gerstle  should  die  without 


348  THE   COURT  OP  APPEALS   DECISIONS 

issue  her  surviving.  The  decisions  in  Matter  of  Vanderbilt, 
172  N.  Y.  69,  and  Matter  of  Brez  (id.  609)  are  fatal  to  this 
contention.2  There  was  a  consummated  transfer  to  the  trustee 
at  the  moment  of  the  testator's  death,  and  upon  this  transfer 
the  tax  is  imposed.  *  *  *  Besides  the  remainder  interests 
above  referred  to  the  will  gives  to  each  of  the  appealing  corpora- 
tions an  immediate  cash  legacy  of  $20,000,  which  is  not  involved 
in  this  appeal.3  In  the  order,  each  corporation  is  directly  assessed 
on  the  combined  values  of  its  immediate  cash  legacy  and  its 
remainder  interest.  The  order  will  be  modified  so  as  to  assess 
the  tax  upon  the  cash  legacies  to  said  corporations  against  them, 
respectively,  and  the  tax  upon  all  of  the  interest  included  in  the 
fund  transferred  for  the  purpose  of  the  trust  against  the  trustees 
as  such." 

1  Section  221. 

2  Sixth  paragraph  of  §  230;  vide  footnote,  supra,  page  273,  to  Matter  of 
Brez,  172  N.  Y.  609. 

3  Matter  of  Title  Guarantee  &  Trust  Co.,  81  Misc.  106. 


1908. 

MATTER  OF  CHARLES  RAMSDILL,  190  N.  Y.  492. 

Intestate  died  a  resident  of  Massachusetts  on  December  19, 
1903.  The  transfer  tax  appraiser  made  a  report  to  the  surrogate 
showing  that  the  decedent's  total  personal  estate  amounted  to 
$72,642,  of  which  only  $6,460  was  within  this  State,  and  that 
the  total  charges  against  the  estate  for  funeral  expenses,  debts 
and  costs  of  administration,  were  $12,041.66.  According  to  this 
appraisal  the  assets  within  this  State  amounted  to  nine  per  cent 
of  the  decedent's  total  personal  estate,  and  the  appraiser,  there- 
fore, deducted  therefrom  nine  per  cent  of  the  debts  and  expenses 
referred  to,  which  amounted  to  $1,084.1  Computed  upon  this 
basis,  the  decedent's  net  assets  within  this  State  were  valued  at 
$5,376,  upon  which  the  share  of  the  intestate's  brother  was 
reported  as  exempt  from  tax,  and  the  shares  of  the  nephews  and 
nieces  were  reported  as  taxable  at  the  rate  of  five  per  cent. 

The  court  cite  Matter  of  James,  144  N.  Y.  6,  and  say, 
page  496:  "When  a  specific  foreign  legatee  of  a  foreign  testator 
can  obtain  satisfaction  of  his  legacy  hi  a  foreign  jurisdiction,  the 
executor  cannot  be  compelled  to  pay  such  a  legacy  out  of  the 
assets  within  our  jurisdiction.  This  is  the  necessary  result  of 


190  N.  Y.  517  349 

the  practical  and  obvious  distinction  between  testacy  and  in- 
testacy as  applied  to  this  subject  of  taxation.  If  a  specific 
legatee  needs  not  the  intervention  of  our  laws  or  courts  to  obtain 
what  comes  to  him  under  a  foreign  will  through  foreign  assets, 
in  a  foreign  jurisdiction,  our  laws  cannot  coerce  an  executor 
into  paying  his  legacy  out  of  funds  within  our  jurisdiction  for  the 
sole  purpose  of  exacting  a  tax. 

"  But  in  a  case  of  intestacy  the  rule  is  essentially  different, 
because  the  distributee  takes  an  undivided  interest  in  the  whole 
estate;  and  if  part  of  it  happens  to  be  within  our  jurisdiction, 
he  can  only  get  his  share  of  what  is  here  under  our  laws  and 
through  our  courts.  This  is  the  theory  upon  which  the  nephews 
and  nieces  of  the  intestate  in  the  case  at  bar  are  clearly  taxable 
under  our  statute." 

After  this  decision  subdivision  2o  (now  subdivision  3)  of  §  220  was  added 
by  chapter  310,  Laws  of  1908,  in  effect  May  18,  1908.  1  State  Department 
Reports,  605-607,  opinion  quoted,  supra,  page  152. 

1  Matter  of  Porter,  67  Misc.  19,  affirmed,  without  opinion,  148  App. 
Div.  896.  Only  "Tangible"  property  within  State  subject  to  tax  in  non- 
resident estate  if  transfer  made  since  amendment  by  Laws  of  1911,  chap- 
ter 732,  in  effect  July  21, 1911,  subdivision  2  of  §  220  and  §  243. 


1907. 

MATTER  OF  SARAH  J.  G.  SPENCER,  190  N.  Y.  617,  dis- 
misses, without  opinion,  appeal  from  119  App.  Div.  883, 
which  affirms,  on  opinion  of  Surrogate,  the  order  of  Sur- 
rogate. Same  case,  193  N.  Y.  613,  affirms,  without  opin- 
ion, 126  App.  Div.  954,  which  affirms,  without  opinion, 
the  order  of  Surrogate. 

Testatrix  died  a  resident  March  2,  1905.  Her  father,  Charles 
C.  Griswold,  died  a  resident  of  Connecticut  on  January  27, 1869. 
By  his  will  he  created  a  trust  fund  which  gave  to  his  daughter, 
Sarah  G.  Spencer,  a  life  estate  with  remainder  over  to  her  heirs, 
she,  however,  having  power  of  appointment  over  said  remainder. 
She  exercised  this  power  of  appointment  in  favor  of  her  heirs. 
Two  of  the  appointees  did  not  appear  before  the  appraiser  and 
the  other  two  made  no  formal  election  to  take  under  the  will 
of  Charles  C.  Griswold. 

Surrogate  Thomas  said,  page  884  of  119  App.  Div. :  "The  vital 
distinction  made  by  the  Court  of  Appeals  in  Matter  of  Cooksey 


350  THE    COURT   OF   APPEALS   DECISIONS 

(182  N.  Y.  92)  and  Matter  of  Lansing  (id.  238),  argued  on  the 
same  day  before  that  court,  is  based  upon  the  difference  existing 
in  the  two  wills  of  the  several  donors  of  the  powers.  In  the  will 
in  Matter  of  Cooksey,  the  remainder  of  the  trust  estate  created 
for  the  benefit  of  the  donee  of  the  power  was  directed  to  pass  to 
or  vest  in  the  children  of  the  donee  of  the  power  upon  her  death 
as  she  by  her '  last  will  and  testament  shall  designate  and  appoint 
and  in  such  manner  and  upon  such  terms  as  he  or  she  may 
legally  impose.'  The  only  alternative  provision  was  that 
'in  case  such  person  dies  intestate'  the  said  trust  fund  should 
'  vest  absolutely  and  at  once'  in  the  surviving  children,  share  and 
share  alike,  of  the  donee  of  the  power.  Under  this  will  it  was 
necessary,  in  order  that  the  children  of  the  donee  of  the  power 
should  take,  either  that  there  should  be  an  exercise  of  the  power, 
or  that  the  donee  of  the  power  should  die  intestate.  Her  chil- 
dren had  no  title  except  under  the  execution  of  the  power  and 
the  transfers  to  them  were,  therefore,  held  taxable. 

"In  the  Lansing  case  there  was  a  direct  devise  and  bequest 
contained  in  the  will  of  the  donor  of  the  power,  by  which  the 
corpus  of  the  trust  fund  was  given  'to  her  heirs  at  law,  subject, 
however,  to  the  power  of  such  child  to  devise  hereinafter  con- 
tained.' Under  this  will  Vann,  J.,  remarked:  'The  execution 
of  the  power  left  the  title  where  it  was  before,  and  the  result  is 
the  same  as  if  there  had  been  no  power  to  exercise.'  In  other 
words,  the  final  beneficiaries  of  the  corpus  of  the  trust  property 
having  been  selected  by  the  donor  of  the  power,  and  an  explicit 
bequest  and  devise  of  that  property  having  been  made  by  the 
donor  of  the  power  to  such  final  beneficiary,  subject  only  to 
a  power  in  the  donee  to  modify  or  change  such  bequest  and  de- 
vise, the  title  of  the  remainder  passed  to  the  beneficiaries  under 
the  will  of  the  donor  of  the  power,  notwithstanding  an  attempt 
to  exercise  the  power  by  the  donee  in  such  a  way  that  no  change 
whatever  was  effected  in  such  original  bequest  and  devise. 

"  The  distinction  between  these  two  cases  was  pointed  out  by 
Vann,  J.,  in  182  N.  Y.  246.  In  the  case  before  me  the  will  of  the 
donor  of  the  power  is  substantially  the  same  as  the  will  in  Matter 
of  Lansing  and  the  will  of  the  donee  of  the  power  neither  adds 
to  nor  takes  away  from  any  of  the  final  beneficiaries  the  benefits 
which  the  will  of  the  donee  of  the  power  expressly  conferred 
upon  them." 

Vide  subdivision  6  of  §220.  Matter  of  Smith,  150  App.  Div.  805-808; 
Matter  of  Ripley,  192  N.  Y.  536;  People  ex  rcl.  Ripley  v.  Williams,  69  Misc. 


190  N.  Y.  525  351 

402;  Matter  of  Chapman,  199  N.  Y.  562;  Matter  of  Haight,  152  App.  Div. 
228;  Matter  of  Lewis,  60  Misc.  643,  reversed  in  194  N.  Y.  550. 

Matter  of  Mitchill,  N.  Y.  Law  Journal,  November  22,  1913,  opinion 
quoted,  post,  page  777. 


1907. 

MATTER  OF  LYMAN  F.  RHOADS,  190  N.  Y.  625,  affirms, 
without  opinion,  120  App.  Div.  882,  which  affirms,  with- 
out opinion,  order  of  Surrogate's  Court. 

Testator  died  a  resident  of  Massachusetts  on  May  30,  1905. 
Decedent  was  the  owner  of  a  life  insurance  policy  on  his  life 
in  Mutual  Life  Insurance  Company  of  New  York.  The  bene- 
ficiaries named  in  said  policy  were  the  decedent's  wife,  or  in  the 
event  of  her  dying  before  him  then  his  children  were  mentioned 
as  such  beneficiaries.  As  a  matter  of  fact,  decedent's  wife  and 
all  his  issue  predeceased  him,  and  at  the  time  of  his  death  his 
sister  was  his  only  heir  and  next  of  kin.  The  policy  was  in  de- 
cedent's safe  deposit  box  in  Boston.  Held,  not  taxable.1 

Decedent  was  the  owner  of  stock  of  United  States  Leather 
Company,  a  New  Jersey  corporation,  which  had  been  deposited, 
under  a  reorganization  agreement,  with  Central  Trust  Company 
of  New  York.  Surrogate  Thomas  said:  "The  testator  did  not 
part  with  the  title  to  his  stock  in  the  New  Jersey  corporation 
when  he  deposited  it  with  the  Central  Trust  Company  of  New 
York  and  accepted  the  receipts  or  certificates  of  that  company 
therefor;  and  the  Trust  Company  did  not  then  or  at  any  tune 
acquire  any  beneficial  ownership  therein.  At  the  time  of  the 
death  of  the  testator  he  continued  to  own  that  stock,  subject  to 
the  rights  acquired  by  the  other  owners  of  stock  hi  the  New 
Jersey  corporation  who  became  parties  to  the  pending  scheme 
for  its  reorganization,  and  the  trust  company  was,  in  substance, 
mere  stakeholder  and  the  agent  and  bailee  of  the  real  parties 
in  interest.  The  transfer  of  the  stock  of  the  foreign  corporation 
on  the  death  of  the  non-resident  testator  was  not  taxable." 
Held,  not  taxable. 

Vide  subdivision  2  of  §  220  and  §  243. 

JVide  Matter  of  Gordon,  186  N.  Y.  471;  Matter  of  Abbett,  29  Misc. 
567;  Matter  of  Horn,  39  Misc.  133;  Matter  of  Gibbs,  60  Misc.  645.  As  to 
resident  estates,  Matter  of  Knoedler,  140  N.  Y.  377;  Matter  of  Parsons,  117 
App.  Div.  321;  Matter  of  Fay,  25  Misc.  468;  Matter  of  Elting,  78  id.  692. 


352  THE   COURT   OF   APPEALS   DECISIONS 

1907. 

MATTER  OF  ROBERT  R.  WILLETS,  190  N.  Y.  627,  affirms, 
without  opinion,  119  App.  Div.  119. 

Testator  died  August  22,  1903.  The  transfer  tax  appraiser's 
report  was  confirmed  on  April  30,  1904.  This  was  a  motion 
to  modify  the  order  and  to  direct  the  State  Comptroller  to  re- 
fund a  portion  of  the  transfer  tax  heretofore  paid.1 

It  was  assumed,  when  the  original  taxing  order  was  made, 
that  a  one-fifth  interest  in  the  house  and  lot  belonged  to  the 
decedent  at  the  time  of  his  death.  A  subsequent  decision  of  the 
Supreme  Court  determined  that  he  had  no  interest  in  said  house 
and  lot.  The  court  say,  page  125:  "Ordinarily,  where  a  deter- 
mination is  set  aside  on  the  ground  of  newly  discovered  evidence, 
the  order  setting  it  aside  should  not  contain  an  adjudication 
contrary  to  the  former  determination  but  should  provide  for  a 
new  hearing  upon  which  both  parties  may  be  heard.  But  this 
rule  does  not  make  it  improper  for  a  surrogate,  when  incon- 
trovertible evidence  is  presented  to  him,  as  it  is  in  this  case, 
establishing  that  a  transfer  is  not  subject  to  the  transfer  tax 
which  has  been  assessed  and  fixed  upon  it,  to  modify  the  order 
in  respect  to  the  erroneous  tax,  without  remitting  the  matter  to 
the  official  appraiser  for  retaxation.  In  the  present  case  the 
facts  relied  upon  by  the  petitioner  to  establish  the  exemption 
of  the  property  in  question  from  a  transfer  tax  are  not  disputed; 
and,  under  such  circumstances,  it  would  be  an  idle  ceremony  for 
this  court  to  send  the  matter  back  to  the  official  appraiser  for  a 
reappraisal  of  the  estate.  (Matter  of  Cameron,  97  App.  Div. 
436.)  As  already  stated,  the  error  complained  of  was  disclosed 
by  the  decision  of  the  Supreme  Court  in  the  action  for  the  con- 
struction of  the  will  of  the  elder  Willets. 

"The  State  Comptroller  contends  that  he  is  not  bound  by  the 
decision,  as  he  was  not  a  party  to  the  action.  That  is  true. 
It  was  not  necessary  to  make  him  a  party  to  that  action,  and 
I  do  not  hold  that  the  decision  is  res  adjudicata  as  to  him.2 
As  it  is,  however,  an  unreversed  decision  of  the  Supreme  Court 
upon  the  direct  question  presented  to  me,  as  to  the  vesting  of 
the  undivided  one-fifth  interest  in  the  property  mentioned,  I 
feel  that  I  must  be  controlled  by  it  and  leave  it  to  the  respondent 
here  to  correct  any  error  by  a  review  of  the  decision  of  this 
court." 

1  Vide  §§  225  and  228  and  subdivision  6  of  §  2481  of  Code  of  Civil  Proco 


192  N.  Y.  536  353 

dure;  Matter  of  Townsend,  153  App.  Div.  85-88,  appeal  pending;  Matter 
of  Weiler,  122  N.  Y.  Supp.  608,  affirmed,  without  opinion,  139  App.  Div. 
905;  Matter  of  Scott,  208  N.  Y.  602  and  cases  cited  sub  Vacating  Decree. 
2  Matter  of  Edson,  38  App.  Div.  19-21,  affirmed,  on  opinion  below,  159 
N.  Y.  568;  Matter  of  Lawrence,  N.  Y.  Law  Journal,  February  15,  1913, 
opinion  quoted  supra,  page  318. 


1908. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  WILLIAM 
C.  DUELL,  FOR  A  WRIT  OF  MANDAMUS  AGAINST 
MARTIN  H.  GLYNN,  AS  COMPTROLLER,  191  N.  Y. 
357,  affirms  122  App.  Div.  314,  which  affirms  56  Misc.  41. 

Under  §  234  a  transfer  tax  assistant  cannot  be  appointed 
except  on  the  joint  action  of  the  State  Comptroller  and  the 
Surrogate.  The  Comptroller  may,  however,  "at  pleasure  re- 
move him." 

As  to  transfer  tax  appraisers  vide  Matter  of  Weeks  v.  Kraft,  147  App. 
Div.  403;  People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35. 


1907. 

MATTER  OF  SIDNEY  D.  RIPLEY,  192  N.  Y.  636,  affirms, 
per  curiam,  122  App.  Div.  419. 

Testator  died  in  1905.  His  grandfather,  Sidney  Dillon,  died 
in  1892,  leaving  a  will  by  which  he  created  a  trust  for  the  benefit 
of  his  grandson,  Sidney  Dillon  Ripley,  and  his  daughters.  The 
income  from  the  trust  property  was  directed  to  be  paid  to  his 
daughters  and  grandsons  during  their  respective  lives;  "on  the 
death  of  either  leaving  lawful  issue  surviving,  the  share  of  the 
one  so  dying  shall,  unless  otherwise  disposed  of  as  directed  by 
the  last  will  of  the  one  so  dying,  be  held  for  the  use  and  benefit 
of  such  lawful  issue,  equally,  share  and  share  alike." 

The  Appellate  Division  say,  page  421:  "It  was  the  manifest 
purpose  and  intent  of  the  testator  to  give  his  grandson  the  right 
•  to  dispose  of  his  share  of  the  trust  estate  by  will  to  others  than 
his  own  children,  but  hi  case  he  did  not  so  dispose  of  it,  his  share 
became  the  property  of  his  children,  share  and  share  alike. 
What  then  were  the  provisions  of  the  will  of  Sidney  Dillon 
Ripley?  He  in  form  assumed  to  dispose  of  all  of  his  share  of  the 
trust  property,  but  in  fact  he  only  'otherwise'  disposed  of  one- 
fifth  part  of  it.  This  he  gave  to  his  widow,  while  the  remaining 
23 


354  THE    COURT   OF   APPEALS   DECISIONS 

four-fifths  went  to  the  same  identical  beneficiaries  and  legatees 
named  in  Sidney  Dillon's  will  and  in  the  same  relative 
share.  *  *  * 

"  (Page  422.)  We  see  no  reason  why  the  fact  that  Mr. 
Ripley  gave  one-fifth  to  his  widow  should  in  any  way  change 
or  prevent  the  application  of  the  bequest  contained  in  Sidney 
Dillon's  will  as  to  the  remaining  four-fifths,  and  we  conclude 
the  children  took  by  virtue  of  that  will.1 

"It  is  questionable  at  least  whether  Sidney  Dillon's  will  when 
properly  construed  gave  to  his  grandson  Sidney  Dillon  Ripley 
any  power  of  appointment  unless  he  exercised  it  to  make  a 
disposition  different  from  that  contained  in  the  Dillon  will. 
Granting  however,  for  the  argument  that  the  right  of  appoint- 
ment by  which  Mr.  Ripley  gave  one-fifth  to  each  of  his  children 
was  a  valid  exercise  of  the  right  conferred,  and  that  the  children 
had  the  right  to  claim  under  and  avail  themselves  of  the  property 
in  question  under  such  appointment,  nevertheless,  they  also 
had  the  right  to  repudiate  such  provisions  and  claim  directly 
under  their  great-grandfather's  will.  (Matter  of  Lansing,  182 
N.  Y.  238,  244.)" 

The  Court  of  Appeals  say,  per  curiam:  "The  order  appealed 
from  should  be  affirmed,  with  costs,  on  the  ground  that  the 
power  of  appointment  created  by  the  will  of  Sidney  Dillon  in 
favor  of  Sidney  Dillon  Ripley  was  limited,  and  could  only  be 
exercised  in  favor  of  persons  who  did  not  take  under  the  will. 
That  is  the  meaning  of  the  words  in  said  will  '  unless  otherwise 
disposed  of  as  directed  by  the  last  will  of  the  one  so  dying.' 
The  great-grandchildren  of  Sidney  Dillon  took  directly  under 
his  will,  except  as  their  interest  may  have  been  divested  or 
cut  down  by  a  valid  exercise  of  the  power." 

Vide  subdivision  6  of  §  220.  Matter  of  Smith,  150  App.  Div.  805-808; 
Matter  of  Warren,  62  Misc.  444-448;  People  ex  rel.  Ripley  v.  Williams,  69 
Misc.  402. 

1  As  to  the  exercise  of  power  over  a  part,  and  not  over  the  whole  of  the 
fund  vide  Matter  of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion 
quoted  sub  Power  of  Appointment,  page  772. 

As  to  right  of  election  vide  Matter  of  Mitchill,  N.  Y.  Law  Journal, 
November  22,  1913,  opinion  quoted,  post,  page  777. 


193  N.  Y.  430  355 

1908. 

MATTER  OF  JULIA  B.  THAYER,  193  N.  Y.  430,  affirms  126 

App.  Div.  951,  which  affirms,  without  opinion,  58  Misc. 

117. 

Testatrix  died  a  resident  of  New  Hampshire  on  May  25, 1905. 
She  owned  certain  shares  of  stock  in  Boston  and  Albany  Rail- 
road Company,  and  also  hi  the  Fitchburg  Railroad  Company. 
The  court  say,  page  431:  "Both  companies  are  incorporated 
under  the  laws  of  Massachusetts  as  well  as  under  the  laws  of 
New  York,  and  each  company  owns  property  in  both  States. 
In  Matter  of  Cooley  (186  N.  Y.  220)  this  court  decided  that  such 
stock  should  be  assessed  for  the  purposes  of  the  transfer  tax  at  a 
value  representing  the  corporate  property  within  this  State,  to 
be  arrived  at  by  ascertaining  the  proportionate  value  of  the 
property  of  the  corporation  situated  in  New  York  with  reference 
to  that  of  the  property  situated  in  Massachusetts.  It  was 
suggested  in  the  opinion  that  this  value  might  be  computed 
with  substantial  accuracy  by  'an  apportionment  based  upon 
trackage  or  figures  drawn  from  the  books  or  balance  sheets  of 
the  company.'  Accordingly  in  the  present  case  the  surrogate 
adopted  the  total  track  mileage  of  the  Boston  and  Albany  rail- 
road and  the  Fitchburg  railroad  as  the  basis  for  his  computa- 
tion; and  neither  party,  upon  the  argument  of  the  appeal  in  this 
court,  finds  any  fault  with  his  action  in  this  respect.  It  was 
made  to  appear,  however,  upon  the  hearing  before  the  appraiser 
that  the  Fitchburg  Railroad  Company  owns  hi  Boston  and  in 
Somerville,  Massachusetts^  certain  grain  elevators  and  connect- 
ing tracks  which  are  described  as  being  'outside  of  and  apart 
from  the  ordinary  freight  and  passenger  terminals  of  the  road.' 
This  so-called  special  property  was  deducted  by  the  surrogate 
from  the  total  capital  before  apportioning  the  stock  on  a 
mileage  basis,  and  the  learned  counsel  for  the  comptroller 
insists  that  this  was  an  error  which  demands  a  reversal  of  the 
order.  *  *  * 

"  (Page  433.)  In  the  case  at  bar  the  effect  of  the  decision  of  the 
surrogate  is  to  hold  that  a  deduction  of  the  special  property  of 
the  Fitchburg  Railroad  Company,  which  has  been  mentioned, 
consisting  of  marine  terminals  in  Boston  and  Somerville,  not 
used  in  the  ordinary  business  of  the  corporation,  was  necessary 
in  order  to  determine  the  true  value  of  the  stock.  The  valuation 
of  the  stock  is  a  question  of  fact.  The  decision  of  the  surrogate 


356  THE    COURT   OF   APPEALS  DECISIONS 

on  this  question  of  fact  has  been  unanimously  affirmed  by  the 
Appellate  Division,  and,  as  it  involves  no  error  of  law,  it  is 
conclusive  in  this  court." 

Prior  to  amendment  of  §§  220  and  243  by  chapter  732,  Laws  of  1911,  in 
effect  July  21, 1911,  in  estates  of  non-residents,  stock  in  Boston  and  Albany 
R.  R.  was  taxed  on  .1837  basis,  and  in  Fitchburg  Railroad  Co.  on  .2551 
basis.  As  to  joint-stock  associations,  Matter  of  Wilmer,  153  App.  Div. 
804. 

As  to  stock  in  corporations  incorporated  only  in  New  York,  vide  Matter 
of  Palmer,  183  N.  Y.  238. 

As  to  present  law  in  non-resident  estates  vide  supra,  page  133. 


1908. 

WILLIAM  G.  DUNHAM  v.  CITY  TRUST  COMPANY  OF 

NEW  YORK,  193  N.  Y.  642,  affirms,  without  opinion,  115 

App.  Div.  584. 

The  plaintiff  was  the  executor  of  John  Dunham  who  died  a 
resident  of  Missouri  in  June,  1903.  Decedent  was  the  registered 
owner  of  stock  of  a  New  Jersey  corporation.  The  City  Trust 
Company  of  New  York  was  the  sole  transfer  agent  of  said  New 
Jersey  corporation.  On  July  13, 1903,  the  executor  wrote  to  the 
City  Trust  Company  of  New  York  enclosing  the  certificates  of 
stock  standing  in  decedent's  name  and  requesting  the  issuance 
of  new  certificates  in  place  thereof  to  specified  persons.  The 
Trust  Company  immediately  replied  that  it  required  a  certified 
copy  of  the  will  and  proof  of  the  issue  of  letters  testamentary 
before  it  would  make  the  transfer.  On  the  same  day  the  Trust 
Company  wrote  to  the  Comptroller  of  the  State  of  New  York 
requesting  that  he  issue  the  "usual  consent  to  the  transfer." 
The  Comptroller  immediately  replied  by  letter  that  as  it  was 
"the  estate  of  a  non-resident  decedent — no  letters  having  been 
issued  or  applied  for  in  this  State,"  the  Comptroller  asked  the 
City  Trust  Company  of  New  York  to  defer  the  transfer  "until 
it  can  ascertain  as  to  the  liability  of  said  estate  to  taxation.  If 
the  estate  proves  to  be  exempt  you  will  be  immediately  notified, 
and  consent  forwarded.  Notification  of  this  action  has  been 
sent  the  representatives  of  said  estate."  On  the  twentieth 
of  the  same  month  the  executor  sent  to  the  Trust  Company  as 
requested  by  it  a  certified  copy  of  the  will  and  of  the  letters 
testamentary.  Two  days  later  the  Trust  Company  wrote 
to  the  executor  asking  for  a  verification  of  his  signature  to  the 


193  N.  Y.  642  357 

assignment  of  the  stock,  and  on  July  twenty-fifth  the  executor 
complied  with  this  request,  and  asked  for  the  transfer  without 
delay.  On  the  twenty-ninth  of  the  same  month  the  Trust 
Company  informed  the  executor  that  the  verification  was 
satisfactory  but  that  it  would  not  make  the  transfer  until  the 
New  York  State  Comptroller  issued  his  consent.  On  October  1, 
1903,  the  Trust  Company  again  wrote  to  the  New  York  State 
Comptroller  asking  him  if  he  was  prepared  to  give  his  consent. 
The  State  Comptroller  replied  the  next  day  that  the  department 
had  written  to  the  executor  in  St.  Louis  asking  for  an  affidavit 
setting  forth  the  assets  of  the  estate.  The  Comptroller  wrote 
to  the  Trust  Company  that  not  having  heard  from  the  executor, 
the  department  requested  "that  the  transfer  of  such  stock  be 
deferred  by  you."  Thereafter  counsel  for  the  executor  communi- 
cated with  the  Trust  Company  and  as  a  result  the  transfer 
of  the  stock  was  finally  made  by  the  Trust  Company  on  Octo- 
ber 24,  1903.  The  Comptroller  never  issued  his  consent. 

Meanwhile  the  market  value  of  the  stock  had  decreased, 
and  the  executor  sold  the  stock  at  a  loss.  Thereupon  the  exec- 
utor sued  the  Trust  Company  for  the  difference  between  the 
price  realized  and  the  value  of  the  stock  on  July  29,  1903,  some 
$14,000.  Judgment  was  given  in  favor  of  the  executor  for  this 
amount,  with  interest,  at  the  trial  term  of  the  court.  This 
judgment  was  reversed,  the  court  saying,  page  587:  "The  action 
is  not  for  a  conversion,  for  the  plaintiff  received  the  stock  and 
sued  for  the  damages  incident  to  the  omission  of  the  defendant 
to  transfer  it.  The  proposition  of  the  plaintiff  is  that  it  became 
the  duty  of  the  defendant  to  make  the  transfer  on  or  about 
July  29,  1903,  but  as  it  did  not  make  the  transfer  until  Octo- 
ber 22  or  24,  1903,  it  must,  therefore,  respond  for  any  damages 
incident  to  such  delay.  *  *  *  The  stock  in  a  foreign  cor- 
poration owned  by  a  non-resident  was  not  taxable.  (Matter 
of  Whiting,  150  N.  Y.  27.)  Therefore,  the  consent  of  the  State 
Comptroller,  provided  for  by  §  228  (now  §  227)  of  the  Tax  Law, 
was  not  necessary  in  order  to  protect  the  defendant.  But  I  am 
of  opinion  that  this  action  does  not  lie.  In  Denny  v.  Manhattan 
Co.  (2  Den.  115)  the  resident  transfer  agent  of  a  foreign  corpora- 
tion unjustly  refused  a  transfer,  and  the  plaintiffs  brought 
action  on  the  case.  The  court  held  that  the  action  did  not  lie 
against  the  defendant,  as  it  was  not  the  agent  of  the  plaintiffs 
and  owed  them  no  duty,  but  the  agent  of  the  defendant,  to  whom 
alone  it  was  answerable  for  any  neglect  in  the  discharge  of 


358  THE    COURT   OF   APPEALS   DECISIONS 

agency.  *  *  *  The  eminent  and  able  counsel  for  the  plain- 
tiff does  not  quarrel  with  the  rule  hi  Denny's  case,  but  would 
take  this  case  out  of  it  upon  the  ground  that  the  defendant  is 
chargeable  with  a  misfeasance,  in  that  'it  undertook  to  do  the 
business  in  an  improper  manner.'  Whether  Mr.  Wharton  is 
correct  when  he  speaks  of  the  'now  exploded  distinction  between 
misfeasances  and  non-feasances'  (Wharton's  Agency,  §  537)  it 
is  not  necessary  to  discuss,  for  it  seems  clear  that  under  the  rule 
in  this  State  the  contention  of  the  plaintiff  cannot  prevail.  In 
Van  Antwerp  v.  Linton,  89  Hun,  417,  419,  the  court,  per  Parker, 
J.,  say: '  As  between  himself  and  his  master  he  is  bound  to  serve 
him  with  fidelity,  and  for  a  breach  of  his  duty  he  becomes 
liable  to  the  master,  who  in  turn  may  be  charged  in  damages 
for  injuries  to  third  persons  occasioned  by  the  non-feasance 
of  the  servant.  For  misfeasance  the  agent  is  generally  liable 
to  third  parties  suffering  thereby.  The  distinction  between 
non-feasance  and  misfeasance  has  been  expressed  by  the  courts 
of  this  State  as  follows:  "If  the  duty  omitted  by  the  agent  or 
servant  devolved  upon  him  purely  from  his  agency  or  employ- 
ment, his  omission  is  only  of  a  duty  he  owes  his  principal  or 
master,  and  the  master  alone  is  liable.  While  if  the  duty 
rests  upon  him  in  his  individual  character  and  was  one  that 
the  law  imposed  upon  him  independently  of  his  agency  or  em- 
ployment, then  he  is  liable."  (Burns  v.  Pethcal,  75  Hun,  443).' 
The  judgment  was  affirmed  on  the  opinion  below  (157  N.  Y. 
716).  In  the  case  at  bar  the  duty  in  which  the  defendant  is 
said  to  be  derelict  was  one  devolved  upon  it  solely  perforce  of 
the  relation  of  principal  and  agent  existing  between  it  and  the 
New  Jersey  corporation.  In  other  words,  the  injury,  if  any, 
was  not  in  failure  of  duty  cast  upon  the  defendant  'by  law  in 
common  with  all  other  men.'  I  recommend  that  the  exceptions 
of  the  defendant  be  sustained  and  that  a  new  trial  be  granted, 
costs  to  abide  the  event." 

A  new  trial  was  not  had  because  the  plaintiff  appealed  to  the 
Court  of  Appeals  and  upon  the  stipulation  entered  into  by  him 
under  subdivision  1  of  §  190  of  the  Code  of  Civil  Procedure,  the 
Court  of  Appeals  upon  affirming  the  Appellate  Division  ordered 
judgment  absolute  against  the  plaintiff. 

Vide  §  227  as  to  consent  of  State  Comptroller  re  transfer  of  securities, 
deposits  or  other  assets  subject  to  the  inheritance  tax;  State  Comptroller's 
opinion,  dated  December  23,  1912,  1  State  Department  Reports,  579,  etiam 
opinion,  dated  January  16,  1913,  id.  601,  etiam  opinion,  dated  Febru- 


193  N.  Y.  652  359 

ary  21,  1913,  2  State  Department  Reports,  496;  People  v.  Mercantile  Safe 
Deposit  Co.,  158  App.  Div.  000,  opinion  quoted,  post,  page  837. 


1908. 

MATTER  OF  JAMES  B.  M.  GROSVENOR,  193  N.  Y.  662, 
affirms,  without  opinion,  on  authority  of  Matter  of  King 
(71  App.  Div.  581)  126  App.  Div.  953,  which  affirms,  on 
authority  of  124  App.  Div.  331,  the  order  of  the  surrogate. 

Testator  died  a  resident  of  Rhode  Island  on  September  25, 
1905.  The  court  in  124  App.  Div.  331,  say,  page  332:  "The 
question  presented  upon  this  appeal  is  whether  the  property  of  a 
non-resident,  located  within  this  State,  is  subject  to  a  transfer 
tax  when  it  appears  that  his  indebtedness  to  creditors  who  are 
residents  of  this  State  is  in  excess  of  the  value  of  the  testator's 
property  within  this  State.  *  *  * 

"  Upon  the  death  of  a  non-resident,  to  administer  his  property 
within  this  State  it  is  necessary  that  ancillary  letters  should 
be  issued  and  the  executors  or  administrators  thus  named  are 
vested  with  the  title  to  the  decedent's  property  within  this  State. 
(Code  Civ.  Proc.,  §§  2695  et  seq.)  Such  property  is  applicable 
to  the  payment  of  the  decedent's  debts  and  the  surrogate  is 
required  to  direct  the  person  to  whom  ancillary  letters  have  been 
issued  to  pay  out  of  the  money  or  the  avails  of  the  property  re- 
ceived by  him  the  debts  of  the  decedent  due  to  creditors  residing 
within  this  State.  (Code  Civ.  Proc.,  §  2701.)  *  *  * 

"  The  principle  applicable  to  this  taxation  is  different  from  that 
applicable  to  the  taxation  of  personal  property  of  residents  of 
this  State,  for  here  the  tax  is  not  against  the  individual  or  against 
the  particular  property,  but  is  a  tax  upon  the  transfer  of  that 
property,  and  it  is  only  by  reason  of  the  transfer  of  the  specific 
personal  property  in  this  State  from  the  testator  to  his  legatees 
that  the  State  undertakes  to  tax,  and  when  nothing  actually 
passes  by  virtue  of  that  transfer  no  tax  is  imposed.  The  Code 
having  made  this  property  within  the  State  applicable  to  the 
payment  of  the  debts  of  the  decedent  to  resident  creditors  the 
fact  that  to  release  them  the  executor  brought  money  of  the  de- 
cedent from  out  of  the  State  and  paid  the  debts  so  that  the 
securities  in  this  State  could  be  transmitted  to  be  administered 
at  the  residence  of  the  decedent  cannot  make  any  difference  as 
to  what  actually  was  transferred  upon  which  a  tax  was  imposed. 

"  If  the  securities  had  been  sold  and  the  proceeds  used  to  pay 


360  THE    COURT   OF   APPEALS   DECISIONS 

the  debts  to  resident  creditors  there  could  be  no  question. 
The  executors  have  procured  the  money,  paid  the  debts,  and 
released  these  securities  from  the  liability  for  his  indebtedness, 
in  substance  purchased  the  securities  for  the  estate.  This 
result  is  within  Matter  of  King  (71  App.  Div.  581;  affd.  on  opin- 
ion below,  172  N.  Y.  616),  and  Matter  of  Westurn  (152  Id. 
93).  There  it  was  held  that  what  was  transferred  and  what  was, 
therefore,  taxable  was  the  amount  of  the  property  of  the  testator 
less  his  debts." 

Vide  subdivision  2  of  §§  220  and  243.  Matter  of  Porter,  67  Misc.  19-21, 
affirmed,  without  opinion,  148  App.  Div.  896,  opinion  quoted,  supra, 
page  147. 

As  to  pledged  securities  vide  Matter  of  Pullman,  46  App.  Div.  574; 
Matter  of  Ames,  141  N.  Y.  Supp.  793-795;  Matter  of  Bennett,  105  id. 
1107;  Matter  of  Havemeyer,  32  Misc.  416;  Matter  of  Hurcomb,  36  id. 
755;  Matter  of  Cox,  N.  Y.  Law  Journal,  January  10, 1912. 


1909. 

MATTER  OF  SUSAN  A.  KEENEY,  194  N.  Y.  281,  sustained 
in  222  U.  S.  625,  sub  nom.  Keeney  v.  New  York. 

Decedent  died  a  resident  March  29,  1907.  In  June,  1903,  the 
deceased,  by  a  deed  of  trust,  transferred  to  the  Fidelity  Trust 
Company  of  Newark,  New  Jersey,  certain  personal  property 
consisting  of  bonds  and  stock  upon  trust  to  pay  to  her  during 
life  one-quarter  of  the  income,  and  the  remaining  three-quarters 
to  her  three  children,  and  after  her  death  to  continue  to  pay  the 
income  or  transfer  the  principal  to  her  said  children  or  their  issue 
as  in  said  deed  provided.  It  was  not  contended  before  the  sur- 
rogate that  three-fourths  of  the  trust  estate,  the  income  of  which 
was  payable  to  the  intestate's  children,  were  subject  to  a  trans- 
fer tax  (Matter  of  Masury,  28  App.  Div.  580),  but  it  was  in- 
sisted that  the  remaining  one-fourth,  the  income  of  which  was 
reserved  to  the  intestate  during  life,  was  subject  to  the  tax,  and 
the  surrogate  so  held. 

The  United  States  Supreme  Court  say,  page  533:  "But  the 
plaintiffs  insist  that  there  is  a  radical  difference  between  an  in- 
heritance tax  and  one  on  transfers  inter  vivos.  The  first,  they 
say,  is  an  excise,  imposed  on  a  privilege;  while  that  complained 
of  here  is  really  on  property,  though  called  a  tax  on  a  transfer. 
They  argue  that  inheritance  taxes  have  been  sustained  on  the 
ground  (United  States  v.  Perkins,  163  U.  S.  625),  that  no  one 


194  N.  Y.  281  361 

has  the  natural  right  to  acquire  property  by  will  or  descent,  and 
if  the  State  permits  such  acquisition,  it  may  require  the  pay- 
ment of  a  tax  as  a  condition  precedent  to  the  right  of  using  that 
privilege.  On  the  other  hand,  they  contend  that  the  right  to 
convey,  or  come  into  possession,  does  not  depend  upon  a  statu- 
tory or  taxable  privilege,  but  is  a  right  incident  to  the  owner- 
ship of  property,  and  that  the  tax  imposed  by  the  statute  on 
that  right  is  in  effect  a  tax  on  the  property  itself,  and  void 
because  lacking  in  the  elements  of  uniformity  and  equality 
required  in  the  assessment  of  property  taxes. 

"But,  if  any  such  distinction  could  be  made  between  taxing 
a  right  and  taxing  a  privilege,  it  would  not  avail  plaintiffs  in  the 
present  case.  There  is  no  natural  right  to  create  artificial  and 
technical  estates  with  limitations  over,  nor  has  the  remainder- 
man any  more  right  to  succeed  to  the  possession  of  property 
under  such  deeds  than  legatees  and  devisees  under  a  will.  The 
privilege  of  acquiring  property  by  such  an  instrument  is  as  much 
dependent  upon  the  law  as  that  of  acquiring  property  by  in- 
heritance, and  transfers  by  deed  to  take  effect  at  death,  have 
frequently  been  classed  with  death  duties,  legacy  and  inheri- 
tance taxes.  Some  statutes  go  further  than  that  of  New  York 
and  tax  gratuitous  acquisitions  under  marriage  settlements, 
trust  conveyances,  or  other  instruments  where  the  transfer  of 
property  takes  effect  upon  the  death,  not  merely  of  the  grantor, 
but  of  any  person  whomsoever.  *  *  *  The  validity  of  the 
tax  must  be  determined  by  the  laws  of  New  York.  The  Four- 
teenth Amendment  does  not  diminish  the  taxing  power  of  the 
State,  but  only  requires  that  in  its  exercise  the  citizen  must  be 
afforded  an  opportunity  to  be  heard  on  all  questions  of  liability 
and  value,  and  shall  not,  by  arbitrary  and  discriminatory  pro- 
visions, be  denied  equal  protection.  It  does  not  deprive  the 
State  of  the  power  to  select  the  subjects  of  taxation.  But  it 
does  not  follow  that  because  it  can  tax  any  transfer  (Hatch  v. 
Reardon,  204  U.  S.  152,  159),  that  it  must  tax  all  transfers,  or 
that  all  must  be  treated  alike. 

«*  *  *  (Page  537.)  The  real  estate  and  tangible  property 
in  Texas  were  not  within  the  taxing  jurisdiction  of  the  State  of 
New  York,  and  there  was  no  effort  to  tax  the  transfer  of  that 
property.  St.  Louis  v.  Ferry  Co.,  11  Wall.  423,  430;  Tax  on 
Foreign  Held  Bonds,  15  Wall.  301,  319.  It  is  urged  that  on  the 
same  principle  the  stocks  and  bonds  could  not  be  taxed  because 
they  were  in  New  Jersey  in  the  hands  of  a  trustee  holding  title 


362  THE    COURT   OF   APPEALS   DECISIONS 

and  possession,  by  virtue  of  a  deed  made  three  years  before  the 
grantor  died. 

"  But  the  statute  does  not  impose  a  tax  on  the  property,  but  on 
the  transfer.  The  validity  of  that  burden  must  be  determined 
by  the  situation  as  it  existed  in  1903,  when  the  deed  was  made. 
At  that  time  the  grantor  was  a  resident  of  the  State  of  New 
York.  This  personal  property  there  had  its  situs.  She  there 
made  a  transfer,  which  was  taxable,  regardless  of  the  residence 
of  the  trustee  or  beneficiary.  The  fact  that  the  assessment  and 
payment  were  postponed  until  the  death  of  the  grantor  would  be 
a  benefit  to  the  remainderman  in  the  many  instances  hi  which 
values  deceased.  But  where  the  power  to  tax  exists,  it  is  for  the 
State  to  fix  the  rate  and  to  say  when  and  how  the  amount  shall 
be  ascertained  and  paid.  The  fact  that  the  liability  was  imposed 
when  the  transfer  was  made  in  1903,  and  that  payment  was  not 
required  until  the  death  of  grantor  in  1907,  does  not  present  any 
Federal  question." 

The  Court  of  Appeals  say,  page  286:  "A  not  wholly  unnatural 
desire  exists  among  owners  of  property  to  avoid  the  imposition 
of  inheritance  taxes  upon  the  estates  they  may  leave,  so  that 
such  estates  may  pass  to  the  objects  of  their  bounty  unimpaired. 
It  is  a  matter  of  common  knowledge  that  for  this  purpose  trusts 
or  other  conveyances  are  made  whereby  the  grantor  reserves  to 
himself  the  beneficial  enjoyment  of  his  estate  during  life.  Were 
it  not  for  the  provision  of  the  statute  which  is  challenged,  it  is 
clear  that  in  many  cases  the  estate  on  the  death  of  the  grantor 
would  pass  free  from  tax  to  the  same  persons  who  would  take  it 
had  the  grantor  made  a  will  or  died  intestate.  It  is  true  that  an 
ingenious  mind  may  devise  other  means  of  avoiding  an  inheri- 
tance tax,  but  the  one  commonly  used  is  a  transfer  with  reser- 
vation of  a  life  estate.  We  think  this  fact  justified  the  legislature 
in  singling  out  this  class  of  transfers  as  subject  to  a  special  tax. 

"  It  is  also  urged  that  the  trust  property  was  at  the  time  of  the 
intestate's  death  in  another  state  with  the  legal  title  in  the  trus- 
tee. This  does  not  affect  the  liability  of  the  transfer  to  taxation. 
The  liability  in  this  case  accrued  at  the  time  of  transfer,  no  mat- 
ter when  imposed."  : 

Vide  subdivision  4  of  §  220.  Matter  of  Patterson,  146  App.  Div.  286- 
289,  affirmed,  without  opinion,  204  N.  Y.  677;  Matter  of  White,  208  N.  Y. 
64-67;  Matter  of  Spring,  75  Misc.  586. 

1  Matter  of  Webber,  151  App.  Div.  539;  Matter  of  Dwight,  149  App. 
Div  912,  opinion  quoted  sub  Trust  Deed,  page  872. 


194  N.  Y.  400  363 

1908. 

MATTER  OF  FREDERICK  COOK,  194  N.  Y.  400. 

Testator  died  a  resident  February  17,  1905,  and  the  matter 
was  before  the  court  in  187  N.  Y.  253.  The  notice  of  the  pres- 
ent appeal  from  the  order  of  the  surrogate  specifies  a  ground  of 
appeal  not  set  forth  on  the  former  appeal. 

The  court  say,  page  402:  "The  surrogate  refused  to  dismiss 
this  second  appeal.  He  conceded  the  general  rule  to  be  that  a 
person  appealing  from  a  judgment  or  order  should  include  all  his 
objections  thereto  in  one  appeal,  but  held  that  a  surrogate's 
order  fixing  a  transfer  tax  is  a  several  judgment  as  to  each  in- 
terest taxed,  and  that  a  person  aggrieved  has  the  right  to  appeal 
separately  from  each  adjudication  therein  contained.  *  *  * 
The  Appellate  Division  disagreed  with  the  surrogate  as  to  the 
motion  to  dismiss  the  appeal  and  reversed  his  order  and  granted 
the  motion  to  dismiss.  It  allowed  an  appeal  to  this  court,  how- 
ever, certifying  four  questions  for  our  determination.  *  *  * 

"It  is  necessary  to  answer  only  the  second  question,  'Did  the 
decision  of  the  Court  of  Appeals  herein  finally  determine  all  the 
rights  of  Frederick  Cook  MacDonell  in  this  proceeding? ' 

"This  court  upon  the  first  review  of  the  decree  fixing  the 
transfer  tax  expressly  affirmed  the  decree  as  modified.  This  ap- 
pears from  the  remittitur  upon  that  decision.  Upon  that  appeal 
the  appellant  could  have  raised  the  question  which  he  now  seeks 
to  have  decided.  He  failed  to  do  so.  If  the  omission  was  ex- 
cusable he  should  have  applied  to  the  surrogate,  upon  affidavits 
excusing  the  omission,  to  modify  his  original  order  by  taxing  the 
remainder  interest  in  the  $200,000  trust  fund  at  what  he  con- 
ceived to  be  the  proper  rate.  The  order  fixing  the  transfer  tax 
upon  an  estate  is  an  entirety  and  a  party  claiming  to  be  ag- 
grieved thereby  and  taking  an  appeal  should  present  upon  that 
appeal  every  objection  which  he  has  to  the  order. 

"It  would  lead  to  endless  delay  and  confusion  if  he  was  per- 
mitted to  take  a  separate  appeal  for  each  objection  he  had  to  the 
order  of  the  surrogate.  The  practice  in  this  class  of  cases  has 
always  been  to  consider  only  such  objections  as  the  appellant 
specifies  and  to  affirm  the  order  as  a  matter  of  course  in  all  other 
respects.  The  specification  of  one  or  more  objections  is  deemed 
equivalent  to  a  concession  that  the  appellant  regards  the  decree 
in  all  other  respects  correct.  It  is  in  substance  an  appeal  only 
from  those  parts  to  which  objection  is  made,  and  after  an  appeal 


364  THE    COURT   OF   APPEALS   DECISIONS 

from  one  part  of  a  decree  a  defeated  appellant  has  never  been 
permitted  to  appeal  from  other  parts  and  so  on  piecemeal  until 
he  has  obtained  a  review  of  the  whole  by  sucessive  appeals." 

Vide  first  paragraph  of  §  232.  Same  estate  in  187  N.  Y.  253,  on  other 
points.  Matter  of  Wormser,  51  App.  Div.  441-445;  Matter  of  Kennedy, 
93  id.  27-30;  Matter  of  Stone,  56  Misc.  247. 


1909. 

MATTER  OF  MARY  LEWIS,  194  N.  Y.  660,  affirms,  without 
opinion,  129  App.  Div.  906,  which  reverses  without  opin- 
ion, 60  Misc.  643,  on  authority  of  Matter  of  Lansing,  182 
N.  Y.  238. 

Moses  Taylor  died  a  resident  May  23,  1882,  and  by  his  will 
gave  a  life  interest  in  certain  property  to  his  daughter  Mary 
Lewis.  She  died  a  resident  May  14,  1907.  Surrogate  Beckett 
said,  page  643:  "That  part  of  the  will  of  decedent's  father  con- 
ferring upon  her  the  power  of  appointment  reads  as  follows: 
'Fourthly:  That  upon  the  death  of  my  children,  and  as  they 
severally  die,  that  my  executors  and  trustees  convey,  pay  and 
assign  to  the  issue  of  such  child  the  part  or  share  held  in  trust  for 
him  or  her  in  such  proportions  and  at  such  time  or  times  as  he 
or  she  shall  direct  and  appoint  in  and  by  his  or  her  last  will  and 
testament,  and  in  case  of  failure  to  make  such  appointment,  then 
to  such  issue  absolutely.'  The  decedent,  by  appropriate  phrase- 
ology in  her  will,  exercised  the  power  in  favor  of  her  children. 
The  latter  filed  with  the  appraiser  an  instrument  in  writing  by 
which  they  elect  to  take  the  property  under  the  will  of  their 
grandfather,  the  donor  of  the  power,  instead  of  under  the  ap- 
pointment exercised  by  their  mother,  the  decedent  herein. 

"The  donor  of  the  power  having  provided  that  the  corpus  of 
the  estate  should,  upon  the  death  of  the  donee  of  the  power,  be 
paid  to  such  persons  and  in  such  proportions  as  she  by  her  last 
will  and  testament  should  appoint,  and  the  donee  having  by 
virtue  of  this  power  appointed  the  persons  to  whom  the  property 
should  be  paid,  these  beneficiaries  derive  their  title  to  the  prop- 
erty through  the  exercise  of  the  power  of  appointment  by  dece- 
dent and  not  directly  from  the  donor  of  the  power.  It  was  only 
upon  the  failure  of  the  donee  of  the  power  to  appoint  that  they 
could  have  taken  under  the  will  of  the  donor.  In  the  Matter  of 
Lansing  (182  N.  Y.  238),  Vann,  J.,  commenting  on  the  Cooksey 


194  N.  Y.  550  365 

case  (182  N.  Y.  92),  said,  respecting  the  donor's  will  in  that 
case  'Moreover,  title  to  the  remainder  was  to  vest  in  them  only 
upon  the  failure  of  the  mother  to  appoint.'" 

The  surrogate  was  reversed,  and  the  transfer  was  held  not  tax- 
able. 

Vide  subdivision  6  of  §  220.  Matter  of  Smith,  150  App.  Div.  805-808; 
Matter  of  Haight,  152  App.  Div.  228;  Matter  of  Lowndes,  60  Misc.  506- 
507;  Matter  of  Warren,  62  Misc.  444;  Matter  of  Haggerty,  128  App.  Div. 
479,  affirmed,  without  opinion,  194  N.  Y.  550;  Matter  of  Ripley,  122  App. 
Div.  419,  affirmed,  per  curiam,  192  N.  Y.  536;  People  ex  rel.  Ripley  v. 
Williams,  69  Misc.  402;  Matter  of  Ronalds,  129  App.  Div.  900. 

As  to  right  of  election  vide  Matter  of  Mitchill,  N.  Y.  Law  Journal, 
November  22,  1913,  opinion  quoted,  post,  page  777. 


1908. 

IN  THE  MATTER  OF  THE  TRANSFER  TAX  UPON  THE 
TRUST  CREATED  BY  THE  WILL  OF  OGDEN  HAO- 
GERTY,  DECEASED,  FOR  THE  BENEFIT  OF  ANNA 
K.  SHAW  AND  REMAINDERMEN,  194  N.  Y.  650, 
affirms,  without  opinion,  128  App.  Div.  479. 

Ogden  Haggerty  died  August  30,  1875.  The  testator  gave  to 
his  executors  in  trust  all  his  residuary  estate,  to  divide  the  same 
into  three  equal  shares,  one  of  such  shares  to  be  for  the  benefit 
of  his  wife  and  one  for  the  benefit  of  each  of  his  two  daughters, 
Anna  K.  Shaw  and  Clemence  H.  Crafts.  In  respect  to  the  share 
designed  for  the  benefit  of  his  daughter,  Anna  K.  Shaw,  one-half 
of  such  share  he  gave  to  her  absolutely,  and  the  remaining  one- 
half  to  his  executors  in  trust  to  pay  the  income  and  profits 
thereof  to  his  said  daughter,  Anna  K.  Shaw,  during  her  life,  and 
on  her  death  to  pay  and  transfer  the  principal  of  one-half  of  such 
share  to  her  issue,  "and  in  case  no  such  issue  shall  survive  her, 
then  to  pay  and  transfer  the  said  last  mentioned  one-half  share 
to  such  person  or  persons  as  my  said  daughter  Anna  shall  by  her 
last  will,  or  instrument  in  the  nature  thereof,  executed  in  the 
presence  of  at  least  two  witnesses,  direct  or  appoint,  and  in  de- 
fault of  such  will  or  appointment,  then  to  pay  and  transfer  the 
said  last  mentioned  one-half  share  to  my  said  daughter  Clemence 
H.  Crafts,  if  she  shall  survive  the  said  Anna,  or  in  case  she  shall 
not  survive  the  said  Anna,  then  to  the  issue  then  living  of  the 
said  Clemence."  Both  of  the  testator's  daughters  survived  him. 
Anna  K.  Shaw  had  no  children  and  died  without  issue  on  the 


366  THE    COURT    OF   APPEALS    DECISIONS 

17th  of  March,  1907,  leaving  her  sister,  Clemence  H.  Crafts, 
surviving. 

Anna  K.  Shaw,  by  her  will  executed  the  power  of  appointment 
in  favor  of  her  sister,  the  said  Clemence  H.  Crafts.  After  the 
will  of  Mrs.  Shaw  was  admitted  to  probate  Clemence  H.  Crafts, 
by  a  formal  instrument  in  writing,  duly  verified,  claimed  the 
trust  funds  exclusively  under  the  will  of  her  father,  Ogden  Hag- 
gerty,  and  in  no  respects  through  the  action  of  her  said  sister, 
and  she  refused  to  take  under  the  alleged  appointment.1 

The  court  say,  page  482:  "It  is  settled  that  when  an  estate 
is  vested  under  a  will  made  before  the  Transfer  Tax  Statutes 
were  enacted,  no  tax  can  be  imposed.  (Matter  of  Pell,  171  N.  Y. 
48;  Matter  of  Lansing,  182  id.  238.)  So,  if  Clemence  H.  Crafts 
took  under  the  will  of  her  father,  her  interest  in  the  estate  was 
not  taxable;  while,  if  she  took  under  the  power  of  appointment, 
contained  in  the  will  of  her  sister,  the  transfer  was  taxable.  The 
question  to  be  determined,  therefore,  is  whether  she  received 
this  estate  under  the  will  of  Ogden  Haggerty,  admitted  to  pro- 
bate in  1875,  or  under  the  will  of  her  sister,  which  was  admitted 
to  probate  on  the  16th  of  May,  1907." 

Held,  that  the  transfer  was  not  taxable. 

Vide  subdivision  6  of  §  220. 

1  Matter  of  Chapman,  133  App.  Div.  337-339,  appeal  dismissed,  without 
opinion,  196  N.  Y.  561;  Matter  of  Smith,  150  App.  Div.  805-808;  Matter  of 
Haight,  152  App.  Div.  228;  Matter  of  Lewis,  60  Misc.  643-644,  reversed, 
194  N.  Y.  550;  Matter  of  Warren,  62  Misc.  444;  Matter  of  Ripley,  122 
App.  Div.  419,  affirmed,  per  curiam,  192  N.  Y.  536;  People  ex  rel.  Ripley  v. 
Williams,  69  Misc.  402;  Matter  of  Ronalds,  129  App.  Div.  900;  Matter  of 
Mitchill,  N.  Y.  Law  Journal,  November  22, 1913,  opinion  quoted  page  777. 


1909. 

MATTER  OF  ALICE  K.  BROWNE,  195  N.  Y.  522,  dismissed 

appeal  from  127  App.  Div.  941,  which  affirmed,  without 

opinion,  order  of  surrogate. 

Testator  died  a  resident  of  Washington  on  March  21,  1905. 
Surrogate  Thomas  in  Matter  of  Porter,  67  Misc.  19,  said:  "In 
the  Estate  of  Alice  Key  Browne,  my  memorandum,  published 
in  the  New  York  Law  Journal  of  May  25,  1907,  reads  as  follows: 
'Estate  of  Alice  Key  Browne — The  appeal  was  taken  in  time. 
The  appraiser  acted  correctly  in  pro  rating  debts  due  to  creditors 
not  domiciled  in  this  State  and  funeral  expenses  (Matter  of 


195  N.   Y.   522  367 

Doane,  N.  Y.  Law  Journal,  March  12,  1903).  He  was  also  cor- 
rect in  pro  rating  the  annuities  or  gifts  of  income  which  are  di- 
rected by  the  will  to  be  paid  generally  out  of  the  income  of  the 
residuary  estate  given  by  the  will  to  the  executor  in  trust.  The 
executor,  however,  is  entitled  to  have  all  expenses  of  administra- 
tion, including  the  commissions  allowable  to  him  in  the  domi- 
ciliary jurisdiction,  also  pro  rated,  and  for  this  purpose  the  mat- 
ter will  be  remitted  to  the  appraiser  if  counsel  are  unable  to  agree 
upon  the  amount.'  *  *  * 

"In  the  Appellate  Division  the  order  was  affirmed  without 
opinion  (Matter  of  Browne,  127  App.  Div.  941),  and  in  the 
Court  of  Appeals  (195  N.  Y.  522)  the  appeal  was  dismissed  with 
the  following  memorandum: 

"  'Per  curiam — While  we  would  have  no  difficulty  in  disposing 
of  this  appeal  by  affirming  the  order  on  the  merits  if  the  appeal 
was  properly  before  us,  we  are  of  the  opinion  that  the  order  ap- 
pealed from  is  interlocutory,  and  therefore  the  appeal  must  be 
dismissed,  with  costs.' 

"The  exact  basis  upon  which  the  pro  rata  allowances  should 
be  made  was,  however,  not  litigated  or  determined  in  that  case. 
In  view  of  the  fact  that  the  rule  established  in  the  Grosvenor 
case,  193  N.  Y.  652,  for  the  deduction  of  New  York  debts  is  very 
liberal  to  the  estates  of  non-resident  decedents,  I  think  the  de- 
duction to  be  made  for  debts  owing  to  non-resident  creditors, 
mortuary  expenses,  commissions  on  property  without  the  State 
and  other  administration  expenses  in  respect  to  such  property, 
should  be  in  the  proportion  which  the  net  New  York  estate  (after 
all  deductions  are  made  for  debts  owing  to  resident  creditors, 
New  York  commissions  and  New  York  administration  expenses) 
bears  to  the  entire  or  gross  estate,  wherever  situated.  The  trus- 
tee's commissions,  which  are  the  subject  of  the  fourth  ground  of 
appeal  will  be  allowed  pro  rata  to  the  extent  here  indicated." 

Vide  subdivision  2  of  §  220  and  §  243.  In  Matter  of  Badger,  N.  Y.  Law 
Journal,  June  8,  1912,  an  application  was  denied  by  Surrogate  Cohalan  to 
vacate  order  fixing  tax  so  as  to  include  deductions  in  accordance  with  the 
rule  in  the  Porter  case,  supra.  The  surrogate  held  that  the  failure  of  ap- 
praiser to  make  deductions  was  an  error  of  law  which  could  be  corrected 
only  by  appeal. 


368  THE   COURT   OF   APPEALS    DECISIONS 

1908. 

MATTER  OF  JAMES  HENRY  MERGENTIME,  195  N.  Y. 
672,  affirms,  on  opinion  below,  129  App.  Div.  367. 

Testator  died  a  resident  July  26,  1906. 

Held,  that  a  legacy  of  $1,000  to  Metropolitan  Museum 
of  Art  was  not  taxable,  on  ground  that  it  was  an  educational 
institution. 

Vide  §  221.  Matter  of  Arnot,  145  App.  Div.  708-712,  affirmed,  without 
opinion,  203  N.  Y.  627;  Matter  of  McCormick,  206  N.  Y.  100;  Matter  of 
Field,  71  Misc.  396-397,  affirmed,  without  opinion,  147  App.  Div.  927; 
Matter  of  Allen,  76  Misc.  88-91;  Matter  of  Saunders,  77  Misc.  54-60, 
affirmed,  without  opinion,  156  App.  Div.  891;  Matter  of  de  Peyster,  N.  Y. 
Law  Journal,  January  21,  1913,  affirmed,  without  opinion,  156  App.  Div. 
938;  Matter  of  Seligman,  N.  Y.  Law  Journal,  July  19,  1913,  opinion  quoted 
sub  Educational  Corporation,  page  677. 


1909. 

MATTER  OF  POLLY  STRAIL,  195  N.  Y.  575,  affirms,  with- 
out opinion,  128  App.  Div.  908,  which  affirmed,  without 
opinion,  order  of  Surrogate  of  Onondaga  County,  no 
opinion. 

Intestate  died  a  resident  December  11, 1896.  On  December  17, 
1897,  a  transfer  tax  was  duly  assessed,  and  same  was  not  paid. 
On  June  23, 1898,  the  administrators,  not  having  received  a  suffi- 
cient sum  from  the  personal  estate  to  pay  the  creditors  of  and 
claims  against  the  estate  of  said  decedent,  obtained  an  order  in 
the  Surrogate's  Court  to  sell  the  real  estate  of  which  the  said 
Polly  Strail  died  seized,  for  the  payment  of  her  debts;  and  on 
October  27,  1898,  sold  the  said  real  estate  to  John  Kelly  and 
John  Kelly,  Jr.,  who  purchased  it  without  any  knowledge  of 
said  transfer  tax. 

The  tax  imposed  in  the  transfer  tax  proceedings  remained  un- 
paid and  in  May,  1904,  the  District  Attorney  of  Onondaga 
County,  at  the  request  of  the  State  Comptroller,  and  under  the 
provisions  of  §  235  of  the  tax  law,  instituted  a  proceeding  in  the 
Surrogate's  Court  citing  the  respondents  to  show  cause  why  the 
tax  should  not  be  paid. 

Held,  "that  said  John  Kelly  and  John  Kelly,  Jr.,  are  not  liable 
for  payment  of  said  transfer  tax  upon  the  estate  of  Polly  Strail, 
deceased,  or  any  part  thereof;  and  that  the  same  or  any  part 


198  N.  Y.  618  369 

thereof  was  not  a  lien  upon  the  said  real  estate  of  Polly  Strail, 
deceased,  purchased  by  them." 

Vide  §§  224,  235  and  245.  The  practice  quite  generally  is  for  a  purchaser 
"of  real  estate  to  insist  upon  transfer  tax  proceedings.  The  certificate  of  the 
state  comptroller  under  the  last  paragraph  of  §  236  should  be  procured  and 
recorded.  As  to  when  such  certificate  cannot  be  procured  because  of  in- 
sufficient assets  to  pay  tax  vide  Matter  of  Meyer,  209  N.  Y.  386. 

Vide  Matter  of  Strang,  117  App.  Div.  796;  Brown  v.  Lawrence,  Park 
Realty  Co.,  133  App.  Div.  753;  Kitching  v.  Spear,  26  Misc.  436. 

Vide  §  447  of  Code  of  Civil  Procedure  as  amended  by  Laws  1911,  chap- 
ter 24. 


1909. 

MATTER  OF  OTTO  LIND,  196  N.  Y.  670,  affirms,  without 
opinion,  132  App.  Div.  321. 

Intestate,  a  native  of  Sweden,  died  on  November  17,  1904,  in 
the  City  of  New  York,  leaving  a  small  amount  of  money  in  a 
savings  bank,  and,  so  far  as  appears,  no  widow  or  next  of  kin  in 
this  State.  Inquiry  failed  to  disclose  any  knowledge  of  him,  his 
family  or  next  of  kin.  Letters  of  administration  were  issued  to 
the  public  administrator,  whereupon  the  Comptroller  of  the 
State  of  New  York  applied  to  the  surrogate  to  have  an  appraisal 
of  the  property  subject  to  a  transfer  tax. 

The  court  say,  page  322:  "The  only  uncertainty  as  to  the 
ownership  of  this  property  depends  upon  the  fact  as  to  whether 
the  deceased  left  next  of  kin.  The  presumption  is  that  the  de- 
ceased left  next  of  kin,  but  there  is  no  presumption  that  he  left 
a  widow  or  descendants.  It  is  presumed,  therefore,  that  the 
property  vested  in  the  next  of  kin  of  the  deceased,  and  is,  there- 
fore, taxable  under  §  220  of  the  Tax  Law  (as  amd.  by  Laws  of 
1897,  chap.  284),  and  as  it  does  not  appear  that  it  is  exempt 
under  §  221  of  the  Tax  Law  (as  amd.  by  Laws  of  1903,  chap.  41), 
the  tax  imposed  by  subdivision  6  of  §  220  (as  amd.,  supra)  applies 
and  it  is  taxable  at  the  rate  of  five  per  centum." 

Vide  subdivision  2  of  §  221a. 


1909. 

MATTER  OF  ELLEN  M.  MAVERICK,  198  N.  Y.  618,  af- 
firms, without  opinion,  135  App.  Div.  44. 

Testatrix,  a  resident,  who  died  January  28,  1908,  by  her  will 
gave  to  the  trustees  of  Greenwood  Cemetery  the  sum  of  $250  in 
trust  to  invest  the  same  and  to  expend  the  income  and  interest 
24 


370  THE    COURT   OF   APPEALS   DECISIONS 

derived  therefrom  in  keeping  her  burial  plot  "in  as  good  con- 
dition and  repair  as  the  said  income  will  permit." 

The  court  say,  page  45:  "It  is  well  established  and  is  not  dis- 
puted that  the  funeral  expenses  of  a  decedent  are  exempt  from 
tax.  As  a  part  of  the  burial  expenses  thus  exempt  it  has  been 
repeatedly  held  that  the  sum  expended  for  a  burial  plot  or  for 
the  erection  of  a  monument  was  also  exempt.  (Matter  of  Edger- 
ton,  35  App.  Div.  125;  affd.,  158  N.  Y.  671;  Estate  of  Millward, 
6  Misc.  Rep.  425;  Matter  of  Liss,  39  id.  123;  Code  Civ.  Proc., 
§  2749.)  By  a  close  analogy  of  reasoning  it  has  until  recently 
been  held  that  the  reasonable  cost  of  keeping  a  burial  plot  and 
monument  in  order  was  a  funeral  expense  and  exempt  from 
tax.  (Matter  of  Vinot's  Estate,  7  N.  Y.  Supp.  517,  cited  in 
Matter  of  Edgerton,  supra.}  If  the  cost  of  a  burial  plot  and 
monument  is  properly  included  in  the  burial  expenses,  I  can  see 
no  reason  why  the  reasonable  cost  of  keeping  them  in  decent 
repair  is  not  also  properly  a  part  of  the  burial  expenses." 


1910. 

MATTER  OF  PAUL  A.  E.  MAJOT,  199  N.  Y.  29. 

The  decedent  was  a  citizen  of  France  and  on  June  30,  1885, 
married  the  respondent  in  that  country  and  they  migrated  to  the 
United  States,  where  decedent  died  on  December  7,  1907,  a  resi- 
dent of  the  State  of  New  York,  intestate,  owning  real  property 
therein  and  possessed  of  certain  personal  property.  The  mar- 
riage in  France  was  without  express  ante-nuptial  contract.  The 
widow  claimed  that  by  virtue  of  her  marriage  with  the  deceased 
in  France,  under  the  law  giving  her  community  of  interest  in 
whatever  property  her  husband  had  or  should  acquire,  she  is  en- 
titled to  one-half  of  his  real  and  personal  property  free  from  the 
transfer  tax  imposed  by  the  laws  of  the  State  of  New  York. 

The  court  say,  page  31:  "No  express  ante-nuptial  contract 
existed  between  them.  He  left  no  will  and  his  widow  has  been 
duly  appointed  administratrix  of  his  estate.  *  *  *  (Page  34.) 
Our  attention  has  been  called  to  no  case  in  this  State 
in  which  our  courts  have  considered  the  question  now  pre- 
sented. *  *  * 

"  (Page  32.)  As  to  whether  the  community  interest  of  a  wife 
in  the  property  of  her  husband  under  the  French  law  is  such  as  to 
constitute  her  the  present  and  continuing  owner  during  their 


199  N.  Y.  562  371 

married  life  of  an  undivided  one-half  interest  in  his  personal 
property  acquired  during  his  residence  in  France  we  do  not  now 
deem  it  necessary  to  determine;  for,  as  we  understand,  all  of  the 
decedent's  property,  both  real  and  personal,  of  which  he  died 
seized  or  possessed,  was  acquired  after  the  removal  of  himself 
and  wife  to  this  State. 

"While  it  must  be  conceded  that  some  conflict  exists  in  the 
decisions  of  courts  in  foreign  jurisdictions,  we  have  no  hesitancy 
in  reaching  the  conclusion  that,  as  to  the  property  acquired  by 
the  decedent  here  during  his  residence  with  his  wife  in  this 
State,  it  is  controlled  by  our  laws  and  upon  his  death  it  is 
transferred  within  the  meaning  of  our  tax  laws." 

Vide  subdivision  1  of  §  220;  Matter  of  Baker,  83  App.  Div.  530,  affirmed, 
on  opinion  below,  178  N.  Y.  575;  Matter  of  Turner,  82  Misc.  25-28. 


1910. 

MATTER  OF  MARTHA  POTTER,  199  N.  Y.  561,  affirms, 
without  opinion,  139  App.  Div.  905,  which  affirms,  with- 
out opinion,  the  order  of  surrogate,  New  York  Law 
Journal,  April  16,  1909. 

Testatrix  died  a  resident  October  28,  1907.  Held,  that  the 
value  of  the  life  interest  should  be  computed  by  the  Superin- 
tendent of  Insurance,  under  the  provision  of  §  230  upon  a  basis 
of  five  per  cent,  irrespective  of  what  the  income  of  the  trust 
fund  might  be. 

Vide  third  paragraph  of  §  230  and  second  sentence  of  §  231.  As  to  life 
estates,  Matter  of  Maresi,  74  App.  Div.  76-78;  Matter  of  Jones,  28  Misc. 
356,  affirmed  172  N.  Y.  575;  Matter  of  White,  208  N.  Y.  64. 

As  to  tables  employed  by  superintendent  of  insurance  vide  post,  page 
581. 


1910. 

MATTER  OF  MARIA  B.  CHAPMAN,  199  N.  Y.  562,  affirms, 
without  opinion,  138  App.  Div.  923,  which  affirms,  on  the 
authority  of  Matter  of  Chapman,  133  App.  Div.  337,  the 
order  of  surrogate,  61  Misc.  593.  Same  case  in  196 
N.  Y.  561,  no  opinion. 

John  Davol,  the  father  of  Maria  B.  Chapman,  died  in  1878. 
By  his  will  the  fund,  left  in  trust  to  the  daughter  for  life,  was  at 
her  death  to  go  to  such  persons  as  she  might  lawfully  appoint  to 


372  THE    COURT   OF   APPEALS   DECISIONS 

receive  it.  But  the  will  further  provides  as  follows:  "If  such 
daughter  shall  fail  to  lawfully  exercise  said  power  of  disposition 
by  her  will,  or  if  for  any  cause  a  reversion  should  occur  as  to  the 
same  or  any  part  thereof,  they  (the  trustees)  shall  pay  the  same 
to  the  lawful  issue  of  such  daughter,  in  the  same  manner  as  if 
such  daughter  had  died  intestate  owning  the  same." 

At  the  date  of  his  death  his  daughter  had  three  sons,  Edwin 
M.  Chapman,  John  D.  Chapman  and  Harold  W.  Chapman. 
Subsequently  a  fourth  son  was  born,  Marvin  A.  Chapman,  and 
all  of  these  sons  survived  her,  she  dying  July  28,  1908.  The 
court  say,  at  page  339  of  133  App.  Div.:  "Under  Mrs.  Chap- 
man's will,  although  she  in  form  executed  her  power  of  appoint- 
ment, it  did  not  effectively  transfer  any  property  whatever  for 
her  children  took  from  their  grandfather  precisely  what  she 
attempted  to  give  them,  and  nothing  was  added  to  or  taken 
away  from  the  gift  by  the  exercise  of  the  power  through  her 
will.  *  *  *  It  is  true  that  there  was  a  provision  in  her  will 
that  one  of  these  parts  should  be  held  in  trust  for  each  of  her 
sons  until  they  attained  the  age  of  twenty-eight  years  (after- 
wards changed  by  her  codicil  so  that  the  period  of  the  termina- 
tion of  the  trust  was  twenty-five  years).  Each  of  her  sons 
was  more  than  twenty-five  years  of  age  at  the  time  that 
she  died.  *  *  *  (Page  340.)  It  has  been  heretofore  sug- 
gested that  the  estate  which  her  sons  took  upon  the  death  of 
their  grandfather,  John  Davol,  was  a  vested  estate  in  remainder. 
Even  if  it  were  contingent,  it  was  an  interest  acquired  at  the 
instant  of  their  grandfather's  death,  and  became  a  property 
right  which  could  not  be  cut  down  by  the  subsequent  imposition 
of  a  transfer  tax.  (Matter  of  Lansing,  182  N.  Y.  238.) 

"The  suggestion  has  been  made  that  the  children  of  Mrs. 
Chapman  declined  to  elect  whether  they  would  take  under  their 
grandfather's  will,  or  under  the  power  of  appointment  in  their 
mother's  will.  The  election  need  not  be  in  any  particular  form, 
and  the  position  taken  by  them  in  connection  with  the  imposition 
of  the  transfer  tax  is  a  sufficient  election  if  one  were  absolutely 
necessary." 

Vide  Matter  of  Smith,  150  App.  Div.  805-808;  Matter  of  Haight,  152 
App.  Div.  228;  Matter  of  Lewis,  60  Misc.  643,  reversed  in  194  N.  Y.  550; 
Matter  of  Warren,  62  Misc.  444;  Matter  of  Ripley,  122  App.  Div.  419, 
affirmed  per  curiam,  192  N.  Y.  536;  People  ex  rel.  Ripley  v.  Williams,  69 
Misc.  402. 

Matter  of  Mitchill,  N;  Y.  Law  Journal,  November  22,  1913,  opinion 
quoted  page  777. 


200  N.  Y.  340  373 

1910. 

MATTER  OF  DANIEL  B.  FEARING,  200  N.  Y.  340,  affirm- 
ing 138  App.  Div.  881. 

Daniel  B.  Fearing,  a  resident  of  New  York,  died  in  1870,  leav- 
ing a  will  by  which  he  created  a  trust  for  the  benefit  of  his 
daughter,  Amey  R.  R.  Sheldon,  during  her  life,  with  a  power  of 
appointment  to  her  as  to  the  principal  of  the  trust  estate  to 
be  exercised  by  her  last  will  and  testament.  She  died  on  Janu- 
ary 29,  1908,  being  then  a  resident  of  the  State  of  Rhode  Island, 
leaving  a  will,  in  which  she  exercised  the  power  of  appointment 
conferred  upon  her  by  her  father's  will. 

The  court  say,  page  342:  "Upon  this  appeal  by  the  Comp- 
troller of  the  State  it  is  argued,  in  the  first  place,  that  the  trust 
property  which  was  appointed  by  Mrs.  Sheldon's  will  'was  prop- 
erty of  a  resident  decedent,  *  *  *  and  consequently  tax- 
able here,  wheresover  situated.'  In  the  second  place,  it  is  argued 
that  bonds  secured  by  mortgages  of  real  estate  situated  in  this 
State,  of  which  the  trust  estate  was  principally  composed,  'al- 
though the  instruments  evidencing  them  are  outside  of  the  State, 
constitute  taxable  property.'  *  *  * 

"Mr.  Fearing  died  many  years  before  the  enactment  of  any 
statute  charging  the  succession  to  estates  of  deceased  persons 
with  a  tax.  After  such  an  enactment  was  placed  upon  the 
statute  books,  it  was  not  until  1897  that  property,  passing 
through  the  execution  of  a  power  of  appointment  created  by 
will,  was  subjected  to  Taxation  when  the  will  had  become  opera- 
tive before  the  passage  of  the  Tax  Law.  *  *  *  (Page  343.) 
Such  an  appointment  to  others  was,  for  the  purposes  of  taxa- 
tion, to  be  deemed  the  equivalent  of  a  bequest,  or  devise,  by  the 
donee  of  the  power  of  property  belonging  to  the  donee.  Prior 
to  this  amendment  of  the  Transfer  Tax  Law,  there  was  no  pro- 
vision for  the  taxation  of  transfers  under  powers  of  appoint- 
ment; but,  with  the  passage  of  the  amendment,  the  privilege  of 
exercising  the  power  by  will  was  subjected  to  the  charge  of  a  tax 
upon  the  right  of  the  appointees  to  take.  Whereas,  previously, 
the  source  of  the  appointee's  right  of  succession  was  deemed  to 
be  in  the  will  creating  the  power  of  appointment;  thereafter  it 
was  deemed  to  be  hi  the  execution  of  the  power  itself.  The 
actual  transfer  effected  by  the  exercise  of  the  power  was  to  be 
taxed.  The  Legislature,  in  the  exercise  of  its  control  over 
testamentary  dispositions  of  property,  could  validly  burden 


374  THE    COURT   OF   APPEALS   DECISIONS 

such  transfers  with  a  tax,  regardless  of  the  technical  source 
of  the  title  of  the  appointee  under  the  rules  of  the  common  law 
(see  Matter  of  Dows,  167  N.  Y.  227;  Matter  of  Delano,  176  id. 
486).  As  Mrs.  Sheldon,  in  making  a  will,  exercised  a  privilege 
granted  by  the  laws  of  her  own  State,  and  not  by  those  of  this 
State,  the  transfers  of  property  effected  thereby  were  beyond 
the  reach  of  our  tax  laws.  The  State  had  no  dominion  over  the 
property  transferred." 

In  reading  this  portion  of  the  opinion  it  must  be  borne  in 
mind  that  it  is  dictum  in  so  far  as  it  relates  to  property  within  the 
State  of  New  York  at  the  time  of  the  donee's  death.  By  refer- 
ence to  the  report  of  the  proceeding  below,  138  App.  Div.  881- 
883,  it  will  be  noted  that  the  Appellate  Division  upheld  the  taxa- 
tion of  the  transfer  under  the  power  of  appointment  of  a  deposit 
in  the  Union  Trust  Company  of  New  York  City  evidenced  by  a 
certificate  of  deposit.  An  examination  of  the  printed  papers 
on  appeal,  page  13,  shows  that  the  said  certificate  of  deposit 
was  physically  located  at  Newport  at  the  time  of  the  decedent's 
death.1  No  appeal  was  taken  by  the  estate  to  the  Court  of 
Appeals. 

The  court  further  say,  page  344:  "The  second  proposition 
urged  by  the  comptroller  presents  no  new  question.  It  is  cov- 
ered by  our  decision  in  Matter  of  Bronson  (150  N.  Y.  1.)  The 
contention  that,  as  the  mortgages,  which  were  given  to  secure 
the  payment  of  the  bonds  transferred  by  Mrs.  Sheldon's  will, 
were  of  real  estate  in  this  state,  the  bonds  represented  invest- 
ments taxable  here,  was  disposed  of  by  that  case.  The  provision 
of  the  Transfer  Tax  Law,  which  was  then  under  consideration, 
was  that,  'a  tax  shall  be  and  is  hereby  imposed  upon  the  trans- 
fer of  any  property  *  *  *  when  the  transfer  is  by  will,  or 
intestate  law,  of  property  within  the  state,  and  the  decedent  was 
a  non-resident  of  the  state  at  the  time  of  his  death.'  (L.  1892, 
ch.  399,  section  1.)  This  provision  of  the  law  has  not  been 
changed  since  its  enactment  in  1892.2  *  *  *  Whether  the 
bonds  are  secured,  as  in  the  Bronson  case,  by  mortgages  of  cor- 
porate property,  or,  as  in  the  present  case,  by  mortgages  of  the 
property  of  individuals,  they  represent,  equally,  debts  of  their 
makers,  which,  as  choses  in  action,  under  the  general  rule  of 
law,  are  inseparable  from  the  personalty  of  the  owner.  Under 
that  rule,  as  it  was  said  in  the  Foreign  Held  Bonds  Case  (15 
Wall.  300-320),  of  the  bonds  there,  they  'can  have  no  locality 
separate  from  the  parties  to  whom  they  are  due,'  and  the  legal 


200  N.  Y.  520  375 

situs  of  the  indebtedness,  which  they  represent,  is  fixed  by  the 
domicile  of  the  creditor.  The  legal  title  to  these  bonds  hi  ques- 
tion was  transferred  by  force  of  the  laws  of  Rhode  Island.  As 
their  legal  and  actual  situs  was  in  a  foreign  state,  upon  no  theory 
were  they  within  the  operation  of  our  Transfer  Tax  Law." 

1  As  to  certificates  of  deposit  vide  Matter  of  Hewitt,  181  N.  Y.  547,  supra, 
page  301. 

2  Amended  by  chapter  732,  Laws  of  1911,  in  effect  July  21,  1911,  vide 
§§  220  and  243. 

Matter  of  Tiffany,  143  App.  Div.  327-329,  affirmed  on  opinion  of  Mc- 
Laughlin,  J.,  below,  202  N.  Y.  550,  appeal  pending  in  United  States  Su- 
preme Court. 

As  to  exercise  of  power  of  appointment,  vide  Matter  of  Kissel,  65  Misc. 
443,  affirmed,  without  opinion,  142  App.  Div.  934;  Matter  of  Frazier,  N.  Y. 
Law  Journal,  March  28,  1912,  opinion  quoted  supra,  page  778,  and  Matter 
of  Thomas,  39  Misc.  136  U902),  which  is  apparently  overruled  by  the 
reasoning  adopted  in  the  cases  of  Kissel,  Fearing  and  Frazier,  supra.  Vide 
etiam  Matter  of  Lord,  111  App.  Div.  152-154,  affirmed,  without  opinion, 
186  N.  Y.  549,  sustained  in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn;  etiam 
Matter  of  Seamen,  N.  Y.  Law  Journal,  December  5,  1913,  opinion  quoted, 
post,  page  780. 

As  to  exercise  of  power  of  appointment  since  the  1911  amendment  by 
non-resident  donee,  vide  post,  page  781. 


1910. 

MATTER  OF  CHARLES  B.  WHITING,  200  N.  Y.  620,  affirms 
without  opinion,  139  App.  Div.  905,  which  affirms,  with- 
out opinion,  69  Misc.  526. 

Testator  died  a  resident  of  Connecticut  on  April  11,  1908. 
Surrogate  Thomas  said:  "  In  the  case  of  a  non-resident  decedent 
it  is  only  the  personal  property  situated  in  this  State  that  is  the 
subject  of  transfer  tax.  The  purpose  of  the  appraisal  is,  there- 
fore, to  determine  the  value  of  such  property,  and  such  value 
must  be  determined  as  of  the  date  of  death  of  the  decedent.  It 
is  only  as  incidental  to  this  purpose,  and  in  order  to  apportion 
between  the  property  in  this  State  and  the  property  elsewhere 
the  debts  and  expenses  of  administration,  that  an  inquiry  is 
made  into  the  value  of  the  property  located  outside  of  this  State. 
Where  it  is  shown,  as  it  is  in  this  case,  that  the  property  outside 
of  this  State  has  been  used  by  the  executor  in  the  exercise  of  his 
acknowledged  right  of  election  to  pay  the  pecuniary  legacies, 
that  it  has  proved  sufficient  to  pay  all  of  them,  and  that  all  of 
the  property  in  this  State  passes  to  a  residuary  legatee  who  is  in 


376  THE    COURT   OF   APPEALS   DECISIONS 

the  class  of  persons  taxable  at  one  per  cent.,  the  tax  must  be  im- 
posed at  that  rate." 

Subdivision  3  of  §  220  was  added  to  the  statute  by  chapter  310,  Laws  of 
1908,  in  effect  May  18,  1908.  Matter  of  Porter,  67  Misc.  19,  affirmed,  148 
App.  Div.  896;  Matter  of  James,  144  N.  Y.  6;  Matter  of  Ramsdill,  190 
N.  Y.  492;  Matter  of  McEvan,  51  Misc.  455;  opinion  of  Comptroller, 
January  20,  1913,  in  1  State  Department  Reports  605,  quoted  supra  page 
152. 


1911. 

MATTER  OF  MARIA  B.  STARBUCK,  201  N.  Y.  531,  affirms, 

on  opinion  of  Thomas,  J.,  below,  137  App.  Div.  866,  which 

affirms  63  Misc.  156. 

Intestate  died  a  resident  on  June  1,  1907. 

The  question  involved  was,  is  an  estate  by  the  curtesy  taxable? 
The  court  say,  page  867:  "Section  220,  so  far  as  here  pertinent, 
provides  for  a  tax  upon  the  'transfer  of  any  property  *  *  =• 
or  of  any  interest  therein  or  income  therefrom,  hi  trust  or  other- 
wise, to  persons  *  *  *  in  the  folio  whig  cases:  1.  When  the 
transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from  any 
person  dying  seized  or  possessed  of  the  property.'  The  words 
'  intestate  laws '  refer  to  the  statutes  governing  the  descent  and 
distribution  of  a  decedent's  property.  Section  280  of  the  Real 
Property  Law,  in  force  when  chapter  368,  Laws  of  1905,  was 
enacted,  provided:  'This  article  (the  one  relating  to  descent) 
does  not  affect  *  *  *  tenancy  by  the  curtesy  or  dower.' 
That  statute  is  the  law's  will  for  the  disposition  of  property  when 
its  owner  dies  without  a  will.  Upon  inspection  to  discover  what 
interest  it  transfers,  it  is  found  that  it  does  not  transfer  an  estate 
by  the  curtesy,  but  disclaims  any  effect  upon  such  estate.  That 
is,  it  leaves  it  untouched  as  a  matter  that  does  not  concern  it. 
Hence  the  taxing  statute  does  not  include  it." 

Matter  of  Green,  144  App.  Div.  232,  and  Matter  of  Andrews,  N.  Y.  Law 
Journal,  February  21,  1912,  opinion  quoted  sub  Husband,  page  718. 
Chapter  732,  Laws  of  1911,  in  effect  July  21,  1911,  added  to  §243  the 
following  sentence:  "The  words  'the  intestate  laws  of  this  state,'  as  used  in 
this  article,  shall  be  taken  to  refer  to  all  transfers  of  property,  or  any  benefi- 
cial interest  therein,  effected  by  the  statute  of  descent  and  distribution  and 
the  transfer  of  any  property,  or  any  beneficial  interest  therein,  effected  by 
operation  of  law  upon  the  death  of  a  person  omitting  to  make  a  valid  dis- 
position thereof,  including  a  husband's  right  as  tenant  by  the  curtesy  or 
the  right  of  a  husband  to  succeed  to  the  personal  property  of  his  wife  who 
dies  intestate  leaving  no  descendants  her  surviving." 


202  N.   Y.   550  377 

Query  as  to  the  effect  of  this  amendment  in  non-rosident  estates,  vide 
supra,  page  36. 

In  Matter  of  Matilda  Beckhardt,  N.  Y.  Law  Journal,  June  7,  1913,  it 
was  held  that  husband's  estate  in  curtesy  did  not  vest  until  death  of  wife, 
and  that  such  estate  was  subject  to  tax  where  wife  died  after  amendment  of 
chapter  732,  Laws  of  1911. 


1911. 

MATTER  OF  CHARLES  C.  TIFFANY,  202  N.  Y.  650,  affirms, 
on  opinion  of  McLaughlin,  J.,  below,  143  App.  Div.  327, 
appeal  pending  in  United  States  Supreme  Court. 

Testator  died  a  resident  of  Connecticut  on  August  20,  1907. 
He  died  owning  certain  promissory  notes  which  then,  and  for 
some  time  prior  thereto  had  been  in  a  safe  deposit  box  in  the  city 
of  New  York.  With  two  exceptions  the  notes  were  made  by  non- 
residents, and  payment  of  all  of  them  was  secured  by  property 
outside  of  the  State  of  New  York. 

Held,  that  all  the  notes  were  subject  to  the  transfer  tax,  the 
court  saying,  page  329:  "So  far  as  this  court  is  concerned,  the 
identical  question  here  presented  has  already  been  passed  upon. 
(Matter  of  Wall,  105  App.  Div.  643.)  There,  promissory  notes 
made  by  a  non-resident  to  a  non-resident,  were,  at  the  time  of 
the  latter's  death,  found  in  his  safe  deposit  box  in  this  State.  A 
majority  of  the  court  held  that  such  notes  were  property  having 
a  situs  in  this  State  and,  therefore,  liable  to  taxation.  (See,  also, 
Matter  of  Fearing,  200  N.  Y.  340.) 

"But  it  is  said  that  since  the  decision  in  Matter  of  Wall  (supra) 
the  Supreme  Court  of  the  United  States  has  decided  (Buck  v. 
Beach,  206  U.  S.  392)  that  promissory  notes,  situated  as  the 
notes  here  in  question,  are  not  taxable.  I  do  not  think  that  de- 
cision is  applicable  to  the  question  here  presented,  and  if  so,  is 
distinguishable.  The  Buck  case  simply  held  that  the  State  of 
Indiana  did  not  have  the  power  to  impose  a  general  tax  upon 
promissory  notes  made  by  a  non-resident,  payable  to  a  non- 
resident, simply  because  they  were  present  in  the  State.  There, 
the  attempt  was  to  levy  a  tax  upon  property,  while  here  it  is  to 
impose  a  tax  upon  the  transfer  or  right  of  succession.  Mr.  Jus- 
tice Peckham,  who  delivered  the  opinion,  was  careful  to  point 
out  the  distinction.  He  said:  'Cases  arising  under  collateral 
inheritance  tax  or  succession  tax  acts  have  been  cited  as  afford- 
ing foundation  for  the  right  to  tax  as  herein  asserted.  The 
foundation  upon  which  such  acts  rest  is  different  from  that  which 


378  THE    COURT   OF   APPEALS   DECISIONS 

exists  where  the  assessment  is  levied  upon  property.  The  suc- 
cession or  inheritance  tax  is  not  a  tax  on  property,  as  has  been 
frequently  held  by  this  court,  Knowlton  v.  Moore,  178  U.  S.  41, 
and  Blackstone  v.  Miller,  188  U.  S.  189,  and,  therefore,  the 
decisions  arising  under  such  inheritance  tax  cases  are  not  in 
point.' 

"In  Blackstone  v.  Miller,  referred  to  by  Mr.  Justice  Peckham, 
the  question  was  whether  a  deposit  hi  a  New  York  bank,  belong- 
ing to  a  non-resident  decedent,  was  subject  to  tax  under  the  New 
York  Transfer  Tax  Act,  and  the  claim  was  there  made  that  such 
deposit  was  a  mere  credit  and  that  the  situs  of  the  property  was 
not  in  the  State.  Mr.  Justice  Holmes,  in  disposing  of  the  ques- 
tion, said:  'We  perceive  no  better  reason  for  denying  the  right 
of  New  York  to  impose  a  succession  tax  on  debts  owed  by  its 
citizens  than  upon  tangible  chattels  found  within  the  State  at 
the  time  of  the  death.  The  maxim  mobilia  sequuntur  personam 
has  no  more  truth  in  the  one  case  than  in  the  other.  When  logic 
and  the  policy  of  a  State  conflict  with  a  fiction  due  to  historical 
tradition,  the  fiction  must  give  way.  *  *  *  Bonds  and 
negotiable  instruments  are  more  than  merely  evidences  of  debt. 
The  debt  is  inseparable  from  the  paper  which  declares  and  con- 
stitutes it.  *  *  *'" 

Vide  subdivision  2  of  §220  and  §243.    As  to  definition  of  "tangible" 
property  vide  Matter  of  Dusenberry,  2  State  Department  Reports,  501. 
For  present  law  vide  supra,  page  133. 


1911. 

MATTER  OF  MAX  FREUND,  202  N.  Y.  556,  affirms,  on 
opinion  of  McLaughlin,  J.,  below,  143  App.  Div.  335. 

Testator  died  January  27,  1909.  On  the  second  Monday  of 
January,  1909,  certain  real  estate  in  the  city  of  New  York  ap- 
peared in  the  annual  records  of  taxation  against  decedent,  who 
died  owning  such  real  estate,  and  the  taxes  thereon,  amounting 
to  $3,020.47,  were  thereafter  fixed  for  the  year  1909  and  were 
paid  by  his  executrix.  She  claims  they  were  a  debt  of  her  tes- 
tator, and  for  that  reason  should  have  been  deducted  before  a 
transfer  tax  was  imposed. 

The  court  say,  page  336:  "The  testator  died  only  a  few  days 
after  the  real  estate  in  question  was  assessed  for  the  purpose  of 
taxation  and  upwards  of  two  months  prior  to  the  first  day  of 
April,  during  which  period  such  assessment  might  have  been  re- 


203  N.  Y.  627  379 

duced  or  corrected.  [Greater  N.  Y.  Charter  (Laws  of  1901, 
chap.  466,  §  892,  as  amd.  by  Laws  of  1903,  chap.  454.)]  *  *  * 

"  (Page  337.)  At  the  time  of  the  testator's  death  there  was  no 
existing  debt,  because  the  taxes  had  not  then  been  ascertained. 
All  that  had  been  done  up  to  that  time  was  the  fixing  of  valua- 
tion, which,  unless  corrected  in  the  manner  pointed  out  hi  the 
statute,  constituted  the  basis  upon  which  the  tax  was  thereafter 
to  be  assessed.  It  was  not  until  the  first  day  of  April  following 
the  testator's  death  that  the  books  for  correction  of  taxes  were 
closed.  Up  to  that  time  the  assessment  might  be  changed  and 
it  was  only  upon  the  amount  of  the  assessment  as  existing  at  the 
time  of  the  closing  of  the  books  that  the  tax  was  to  be  levied. 
The  assessment  of  valuations  for  purposes  of  taxation  and  the 
assessment  of  taxes  constitute  two  different  things.  The  first 
does  not  create  an  indebtedness,  while  the  latter  does.  *  *  * 
In  Buckhout  v.  City  of  New  York  (176  N.  Y.  363)  the  court 
said:  'Taxation  cannot  create  a  debt  until  there  is  a  tax  fixed  in 
amount  and  perfected  in  all  respects.  It  is  not  enough  to 
lay  the  foundation,  but  the  structure  must  be  built.  There 
cannot  be  a  complete  tax  upon  real  estate  until  it  is  so  perfected 
as  to  become  a  lien,  because  until  then  the  amount  cannot  be 
known.'  *  *  * 

"(Page  338.)  For  the  foregoing  reasons,  as  well  as  those 
stated  hi  Matter  of  Maresi  (74  App.  Div.  76),  where  a  similar 
conclusion  was  reached  by  the  Appellate  Division  of  the  Second 
Department,  I  am  of  opinion  that  the  order  appealed  from  is 
right  and  should  be  affirmed." 

Vide  Matter  of  Brundage,  31  App.  Div.  348.  Subdivision  2  of  §  2719  of 
Code  of  Civil  Procedure  interpreted  in  Matter  of  Babcock,  115  N.  Y.  450- 
456,  and  also  in  Matter  of  Hoffman,  42  Misc.  90;  Matter  of  Lisa,  39  Misc. 
123. 

New  York  City  personal  taxes  assessed  for  the  year  1912  allowed  as  a 
deduction  in  estate  of  decedent  who  died  November  7,  1911.  Matter  of 
Dormitzer,  N.  Y.  Law  Journal,  February  6,  1913. 


1911. 

MATTER  OF  MATTHIAS  H.  ARNOT,  203  N.  Y.  627,  affirms, 
without  opinion,  145  App.  Div.  708. 

Testator  died  a  resident  February  15,  1910.  The  surrogate 
held  that  certain  devises,  bequests  and  transfers  by  his  will  to 
a  corporation  to  be  formed  known  as  the  Arnot  Art  Gallery  were 


380  THE    COURT   OP   APPEALS   DECISIONS 

not  taxable  (71  Misc.  Hep.  390),  and  from  that  decision  this 
appeal  was  taken  by  the  Comptroller.  The  court  discuss  the 
clauses  of  the  will,  and  say,  page  717:  "Certainly  a  study  by  any 
person  or  persons  with  a  love  for  art  and  a  desire  to  create  such 
a  love  of  the  pictures  alone  bequeathed  by  this  testator  could 
not  but  be  an  education.  *  *  *  What  is  this  'Arnot  Art 
Gallery'  thus  provided  for  and  actually  incorporated  within  the 
period  limited  by  the  will  if  not  an  'educational  corpora- 
tion'? *  *  *  No  pay  days  as  has  the  'Metropolitan  Mu- 
seum of  Art/  no  necessary  passes  for  teachers,  but  free  to  all, 
teacher  and  taught,  'under  proper  (and)  reasonable  regulations' 
at  all  times.  It  is  and  must  be  a  great '  educational '  institution. 
The  term  'educational'  has  been  given  by  our  courts  a  broad 
and  liberal  construction  and  I  think  the  term  as  used  in  the 
statute  is  broad  enough  to  cover  this  Arnot  Art  Gallery." 

Vide  first  sentence  of  §  221.  Matter  of  Saunders,  77  Misc.  54-63,  affirmed, 
without  opinion,  156  App.  Div.  891;  Matter  of  de  Peyster,  N.  Y.  Law 
Journal,  January  21,  1913,  opinion  quoted  sub  Educational  Corporation, 
page  676,  affirmed,  without  opinion,  156  App.  Div.  938. 

As  to  corporations  to  be  formed  vide  Matter  of  Robinson,  80  Misc.  458, 
and  Matter  of  Neustadter,  N.  Y.  Law  Journal,  August  16,  1913,  opinion 
quoted  sub  Exemptions,  page  688;  Matter  of  McCartin,  N.  Y.  Law  Journal, 
December  5,  1913,  opinion  quoted,  page  608. 


1912. 

MATTER  OF  WILLIAM  H.  BURGESS,  204  N.  Y.  265. 

Testator  died  July  11,  1909.  The  court  say,  page  267: 
"The  will  of  the  deceased,  so  far  as  material  to  the  controversy 
before  us,  after  directing  his  executors  to  set  aside  a  fund  of 
$50,000  for  the  benefit  of  each  of  his  daughters,  the  income 
thereof  to  be  paid  to  said  daughter  during  her  life,  gave  all  the 
residuary  estate  to  his  executors  in  trust  to  pay  the  net  income  to 
the  testator's  wife  during  her  life  or  widowhood,  and  upon  her 
death  or  remarriage  he  directed  his  said  executors  to  divide 
said  trust  fund  (with  the  exception  of  the  sum  of  $10,000) 
'into  as  many  shares  as  I  may  have  daughters  living  at  the 
tune  of  such  division,  and  their  living  issue,  collectively,  of  any 
then  deceased  daughter,  and  to  set  aside  one  share  for  the  issue 
collectively  of  any  then  deceased  daughter,  and  pay  over  the 
said  share  to  such  issue  in  equal  shares,  so  that  each  set  of  issue 
will  receive  one  share,  per  stirpes,  and  to  set  aside  one  share  for 


204  N.  Y.  265  381 

the  benefit  of  each  of  my  said  daughters  then  living  and  to  have 
and  to  hold  the  same  IN  TRUST,  nevertheless,  to  and  for  the 
following  uses  and  purposes,  namely: — To  invest  and  keep  the 
same  invested,  to  receive  the  rents,  issues  and  profits,  and  to 
pay  the  net  rents,  issues  and  profits  so  received  to  the  daughter 
for  whose  benefit  the  said  share  shall  be  so  set  aside,  during  the 
term  of  her  natural  life  and  on  her  death,  to  pay  over  the  princi- 
pal so  held  in  trust,  together  with  the  sum  of  Fifty  thousand 
dollars  also  set  apart  for  her  benefit  as  provided  by  the  Third 
clause  of  this  will  to  such  person  and  hi  such  manner  as  she  may 
in  and  by  her  last  Will  and  Testament  properly  executed  by  her 
duly  appoint  or  in  default  of  such  appointment,  either  as  to  the 
whole  or  any  part  thereof,  then  to  the  extent  to  which  no  ap- 
pointment shall  be  made,  to  her  issue  her  surviving  per  stirpes, 
or  in  default  of  both  such  appointment  either  as  to  the  whole  or 
any  part  thereof,  and  of  issue,  then  to  the  extent  to  which  no 
such  appointment  shall  be  made,  to  such  persons  as  would  be 
entitled  to  receive  the  same  if  she  had  died  intestate  possessed 
of  the  principal  of  said  trust  estate  (and  for  the  purposes  of 
ascertaining  the  persons  who  would  be  so  entitled  to  receive  the 
same,  the  entire  principal  of  the  trust  estate  shall  in  that  event 
be  deemed  to  be  personal  property).' 

"The  testator  left  his  widow  and  three  daughters  him  surviv- 
ing. The  surrogate  held  the  remainders  hi  the  trust  funds  of 
$50,000  each  to  be  subject  to  taxation  only  at  the  respective 
deaths  of  the  equitable  life  tenants.  He  held  that  the  remainder 
in  the  residuary  estate  after  the  death  of  the  wife  to  be  pres- 
ently taxable  and  imposed  the  tax  at  the  rate  of  five  per  cent. 
The  executors  appealed  from  so  much  of  the  decree  as  imposed 
a  tax  of  five  per  cent  upon  the  remainder  of  the  residuary  estate. 
No  appeal  was  taken  by  the  comptroller. 

"The  question  presented  hi  this  appeal  is  not  free  from 
doubt.  Its  determination  depends  on  what  section  of  the 
Tax  Law  is  deemed  to  be  applicable  to  the  case.  Under  the 
statutes  that  first  imposed  taxes  on  succession  either  under 
testamentary  dispositions  or  intestacy  laws,  it  was  held  that 
contingent  remainders  or  remainders  technically  vested,  but 
subject  to  be  divested,  and,  therefore,  in  the  broad  sense, 
contingent,  could  not  be  taxed  until  they  indefeasibly  vested. 
(Matter  of  Curtis,  142  N.  Y.  219.)  Subsequently  it  was  held 
that  the  exercise  of  a  power  of  appointment  did  not  subject  the 
property  passing  thereunder  to  a  succession  tax,  where  the 


382  THE    COURT   OF   APPEALS   DECISIONS 

source  of  the  power  was  a  will  prior  to  the  enactment  of  the 
Transfer  Tax  Law.  But  hi  1897  the  statute  was  changed  so 
that  §220,  subd.  6,  now  provides:  'Whenever  any  person  or 
corporation  shall  exercise  a  power  of  appointment  derived  from 
any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  chapter,  such  appointment  when  made,  shall  be 
deemed  a  transfer  taxable  under  the  provisions  of  this  chapter 
in  the  same  manner  as  though  the  property  to  which  such  ap- 
pointment relates  belonged  absolutely  to  the  donee  of  such 
power  and  had  been  bequeathed  or  devised  by  such  donee  by 
will.'  *  *  *  (Page  269.)  Still  later  §  230  was  amended  so 
as  to  provide  that  'when  property  is  transferred  in  trust  or 
otherwise,  and  the  rights,  interests  or  estates  of  the  transferees 
are  dependent  upon  contingencies  or  conditions  whereby  they 
may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate 
which,  on  the  happening  of  any  of  the  said  contingencies  or 
conditions,  would  be  possible  under  the  provisions,'  of  the  act, 
which  tax  is  made  payable  forthwith  by  the  executors  or  trustees 
out  of  the  property  transferred.1  The  amendment  of  these  two 
sections  abrogated  the  rules  declared  in  the  decision  cited. 
In  Matter  of  Vanderbilt  (172  N.  Y.  69)  the  validity  of  §  230  was 
upheld  and  it  was  decided  that  under  its  provisions  the  tax  was 
immediately  payable  out  of  the  estate,  to  be  computed  at  the 
highest  rate  at  which,  under  any  contingency  provided  in  the 
will,  the  property  might  be  taxable.  The  will  in  that  case  gave 
no  power  of  appointment.  Later  the  case  of  Matter  of  Howe 
(86  App.  Div.  286)  arose.  There  the  gift  was  in  trust  to  one 
Leavitt  Howe  for  life,  remainder  to  such  persons  as  by  his  last 
will  he  might  appoint.  It  was  held  by  the  Appellate  Division, 
Justice  Willard  Bartlett,  then  in  the  Supreme  Court,  writing 
the  opinion,  that  the  amendment  of  §  230  did  not  repeal  or 
render  nugatory  the  provisions  of  §  220  that  property  passing 
under  a  power  of  appointment  should  be  taxed  on  the  transfer  by 
the  exercise  of  the  power  of  appointment  the  same  as  if  the  donee 
of  the  power  was  the  owner  of  the  property,  and  that  hence  the 
remainders  were  not  taxable  until  the  death  of  such  donee. 
The  decision  was  affirmed  by  this  court  on  that  opinion.  (176 
N.  Y.  570.) 

"Under  that  authority  it  is  clear  that  the  decision  of  the 
surrogate  that  the  remainders  in  the  several  $50,000  trust  funds 
were  not  presently  taxable  was  correct.  The  embarrassment  as 


204  N.   Y.   265  383 

to  the  taxation  of  the  remainders  in  the  residuary  estate  is 
caused  by  the  fact  that  it  is  not  certain  whether  there  will  be 
any  power  of  appointment  to  be  exercised  over  the  whole  or  any 
part  of  the  residuary  estate.  The  executors  are  to  divide  the 
property  into  as  many  shares  as  there  may  be  living  daughters  or 
issue  of  a  deceased  daughter  at  the  death  of  the  widow.  If  at 
such  time  any  daughter  shall  have  died  leaving  issue  then  sur- 
viving, such  issue  will  inherit  directly  under  the  will  and  not 
by  virtue  of  the  exercise  or  non-exercise  of  any  power  of  ap- 
pointment, and  such  inheritance  will  comprise  a  part  or  the 
whole  of  the  property,  dependent  upon  whether  any  of  the  other 
daughters  shall  survive  that  period.  If  none  of  the  daughters 
shall  live  until  that  time,  none  will  have  any  power  of  appoint- 
ment. The  result  would  be  that  if  the  rule  of  Matter  of  Howe 
(supra)  was  applied  to  the  present  case  the  remainders  might 
escape  taxation  altogether.  For  that  reason  the  learned  courts 
below  held  that  the  rule  applies  only  where  there  is  an  absolute 
gift  of  a  power  of  appointment,  so  that  the  property  is  certain  to 
pass  either  under  the  exercise  or  non-exercise  of  the  power  of 
appointment,  and  that  the  case  before  them  was  not  within  the 
rule.  In  this  view  we  concur. 

"But  the  question  still  remains  at  what  rate  this  remainder  is 
taxable.  The  courts  below  have  imposed  the  tax  at  the  rate  of 
five  per  cent,  on  the  assumption  that  under  the  terms  of  the  will 
the  property  may  pass  to  collaterals  or  strangers,  transfers  to 
whom  are  taxable  at  that  rate." 

The  court  construed  the  will  and  say,  page  271:  "It  follows 
that  the  testator  died  intestate  as  to  the  remainder  in  the 
contingency  of  no  daughter  nor  issue  of  daughter  surviving 
the  widow,  and  that  that  contingent  interest  passed  immediately 
on  his  death  to  his  widow  and  daughters.  Therefore,  in  no 
contingency  can  any  person  succeed  to  the  remainder  under  the 
will — apart  from  the  exercise  or  non-exercise  of  the  power  of 
appointment — except  the  lineal  descendants  of  the  testator 
taxable  at  the  rate  of  one  per  cent." 

Vide  subdivision  6  of  §  220. 

1  Sixth  paragraph  of  §  230  and  last  two  paragraphs  of  §  241,  amended  by 
Laws  of  1911,  chapter  800,  in  effect  July  28,  1911;  Matter  of  Leuff,  1  State 
Department  Reports,  567;  Matter  of  Billingsley,  id.  569;  Matter  of  Everett, 
3  id.  450,  opinion  quoted,  post,  page  824. 

Matter  of  Smith,  80  Misc.  140;  Matter  of  Armstrong,  N.  Y.  Law  Jour- 
nal, February  20,  1912,  opinion  quoted,  page  733;  Matter  of  Simmons,  id., 
June  14,  1912,  opinion  quoted  page  829;  Matter  of  Litchfield,  id.,  July  2, 


384  THE    COURT   OF   APPEALS   DECISIONS 

1913,  opinion  quoted  page  772;  Matter  of  Lane,  157  App.  Div.  694-697; 
Matter  of  Turner,  82  Misc.  25-26. 


1912. 

MATTER  OF  MARTHA  M.  READ,  204  N.  Y.  672,  affirms, 
without  opinion,  146  App.  Div.  920,  which  affirms,  with- 
out opinion,  an  order  of  New  York  County  Surrogate's 
Court,  New  York  Law  Journal,  November  12,  1910. 

Testatrix  died  a  non-resident,  September  25,  1904.  Applica- 
tion under  §  223  to  reduce  interest  on  tax  from  ten  per  centum 
per  annum  to  six  per  centum  on  the  ground  that  the  delay  in  the 
payment  of  the  tax  was  unavoidable  because  of  the  fact  that  the 
executors  and  trustees,  all  of  whom  were  non-residents,  had 
no  actual  or  constitutional  knowledge  of  the  existence  of  the 
Transfer  Tax  Law  and  therefore  had  not  known  that  the  estate 
was  subject  to  such  a  tax. 

Surrogate  Thomas,  in  denying  the  application,  said:  "The 
qualified  power  given  to  me  by  the  Legislature  to  remit  the 
penalty  upon  the  transfer  tax  does  not  justify  my  granting  the 
present  application." 

Vide  Matter  of  Cornell,  170  N.  Y.  423-426;  People  v.  Prout,  53  Hun, 
541,  affirmed,  without  opinion,  117  N.  Y.  650;  Matter  of  Stewart,  131  N.  Y. 
274-285;  Matter  of  De  Graef,  24  Misc.  147-150;  Matter  of  Brower,  N.  Y. 
Law  Journal,  July  15,  1913,  opinion  quoted  sub  Interest,  page  722. 


1911. 

MATTER  OF  SUSAN  S.  PATTERSON,  204  N.  Y.  677,  af- 
firms, without  opinion,  146  App.  Div.  286. 

Testatrix  died  a  resident  September  27,  1909.  Some  six 
years  before  she  died  she  executed  a  deed  of  trust,  by  which  she 
transferred  to  three  trustees  therein  named  all  of  her  property 
except  her  real  estate  in  the  town  of  Westfield,  her  household 
furniture  and  chattels  in  her  home,  carriages,  harnesses  and  live 
stock  on  said  real  property  and  also  her  wearing  apparel  and 
jewels.  Contemporaneously  she  made  her  will,  disposing  of  her 
residuary  estate  practically  in  the  same  shares  to  the  same  people 
who  were  beneficiaries  under  the  trust  deed,  and  naming  as 
executors  the  same  persons  who  were  made  trustees  under 
the  trust  deed.  The  trust  deed  provided,  page  288:  "Whereas 
t  lie  party  of  the  first  part  is  possessed  of  divers  properties,  which 


206  N.   Y.    100  385 

she  desires  to  transfer,  assign  and  convey  to  the  Trustees  for  the 
purpose  of  taking  possession  thereof  and  title  thereto,  collecting 
the  income  therefrom,  and  applying  such  income  in  part  to  the 
use  and  benefit  of  the  party  of  the  first  part  during  her  life,  and 
any  residue  of  the  income  to  be  distributed  to  certain  bene- 
ficiaries, and  upon  the  decease  of  party  of  the  first  part  the 
entire  estate  to  be  distributed  to  certain  beneficiaries."  The 
trustees  were  directed  by  the  deed  of  trust  upon  the  death  of  the 
grantor  to  convert  all  the  assets  of  the  trust  estate  into  money 
and  out  of  the  proceeds  to  pay  one  dollar  to  George  Sutherland, 
"and  to  divide  the  rest,  residue  and  remainder  thereof  into 
eight  hundred  and  eighty  (880)  equal  shares  and  distribute  and 
pay  over  said  shares  to  the  following  persons,  to  wit:"  Then 
follows  the  designation  of  persons  who  are  to  receive  the  same, 
with  the  number  of  shares  each  is  to  have.  The  surrogate  held 
that  the  transfer  of  the  corpus  of  this  estate,  passing  by  the  trust 
deed,  was  taxable,  because  it  was  intended  by  its  terms  to  take 
effect  in  possession  and  enjoyment  upon  her  death. 
The  order  of  surrogate  was  affirmed. 

Vide  subdivision  4  of  §  220.  Matter  of  Bostwick,  160  N.  Y.  489;  Matter 
of  Keeney,  194  N.  Y.  281,  sustained  in  222  U.  S.  525,  sub  nom.  Keeney  v. 
New  York,  and  cases  cited  sub  Trust  Deed. 


1912. 

MATTER  OF  LUCY  M.  McCORMICK,  206  N.  Y.  100,  re- 
verses 148  App.  Div.  936,  and  71  Misc.  95. 

Testator  died  September,  1908.  She  left  a  legacy  to  the 
American  Baptist  Publication  Society,  incorporated  in  New 
York  and  Pennyslvania.  The  court  say,  page  104:  "After  the 
decision  in  Matter  of  Watson  (171  N.  Y.  256)  was  made  and 
in  1905,  §  221  of  the  Tax  Law  relating  to  transfer  taxes  was  so 
amended  as  to  provide  that  the  exemption  formerly  existing  in 
favor  of  a  religious  corporation  should  be  extended  to  'any 
religious,  educational,  charitable,  missionary,  hospital  or  in- 
firmary corporation.'  Thus  we  see  that  by  this  amendment 
there  was  embodied  in  the  statute  exempting  legacies  from  taxa- 
tion language  which,  so  far  as  the  point  now  under  discussion  is 
concerned,  is  just  as  broad  as  was  that  language  of  §  4  of  the 
Tax  Law  *  *  *  which  it  was  conceded  in  the  Watson  case 
would  have  been  comprehensive  enough  to  exempt  from  taxa- 
tion a  bequest  to  the  Missionary  Society  of  the  Methodist 
25 


380  THE    COURT   OF   APPEALS   DECISIONS 

Episcopal  Church.  Thus,  instead  of  being  an  authority  for  the 
imposition  of  a  transfer  tax  in  the  present  case,  as  seemed  to  be 
the  opinion  of  the  courts  below,  the  reasoning  in  the  Watson 
case  when  applied  to  the  form  of  the  statutes  in  force  when  the 
present  will  took  effect  becomes  an  authority  for  the  contrary 
view." 
Vide  first  sentence  of  §  221. 


1912. 

MATTER  OF  JAMES  JOURDAN,  206  N.  Y.  663,  reverses 
151  App.  Div.  8,  and  affirms  70  Misc.  159,  on  the  dissent- 
ing opinion  of  Jenks,  P.  J.,  below. 

The  testator  died  a  resident  November  1,  1910,  leaving  all 
his  property  to  his  widow.  The  net  estate  was  found  by  the 
appraiser  to  be  $2,146,000.48. 

The  statute  in  force  at  the  time  of  decedent's  death  was 
chapter  706,  Laws  of  1910,  in  effect  July  11, 1910.1 

Surrogate  Ketcham  fixed  the  tax  as  follows: 

$       5,000.00 exempt 

25,000.00  at  1% $     250.00 

100,000.00  at  2% 2,000.00 

500,000.00  at  3% 15,000.00 

1,000,000.00  at  4% 40,000.00 

516,000.48  at  5% 25,800.02 


$2,146,000.48  $83,050.02 

The  State  Comptroller  in  his  appeal  contended  that  the  tax 
on  the  transfer  to  the  widow  of  the  $2,146,000.48  should  have 
been  on  the  following  basis : 

$       5,000.00 exempt 

25,000.00  at  1% $     250.00 

75,000.00  at  2% 1,500.00 

400,000.00  at  3% 12,000.00 

500,000.00  at  4% 20,000.00 

1,141,000.48  at  5% 57,050.02 


$2,146,000.48  $90,800.02 

The  Court  of  Appeals  sustained  the  Surrogate. 

1  Section  221  of  the  statute  as  it  stood  under  chapter  706,  Laws  of  1910, 
provided,  inter  alia:  "The  rates  of  taxation  hereinbefore  prescribed  in  this 


206  N.  Y.  656  387 

and  the  preceding  section  are  hereby  designated  as  'primary  rates.'  When- 
ever any  property,  real  or  personal,  or  any  beneficial  interest  therein  which 
passes  by  any  such  transfer  to  or  for  the  use  of  any  person  or  corporation, 
shall  exceed  the  amount  of  twenty-five  thousand  dollars  over  and  above  the 
exemptions  hereinbefore  provided  the  rate  of  taxation  shall  be  as  follows: 
Upon  all  amounts  in  excess  of  the  said  twenty-five  thousand  dollars  and 
up  to  and  including  the  sum  of  one  hundred  thousand  dollars,  twice  the 
primary  rates;  upon  all  amounts  in  excess  of  the  said  one  hundred  thousand 
dollars  and  up  to  and  including  the  sum  of  five  hundred  thousand  dollars, 
three  times  the  primary  rates;  upon  all  amounts  in  excess  of  the  said  five 
hundred  thousand  dollars  and  up  to  and  including  the  sum  of  one  million 
dollars,  four  times  the  primary  rates;  upon  all  amounts  in  excess  of  the  said 
one  million  dollars,  five  times  the  primary  rates."  The  statute  was  again 
amended  by  chapter  732,  Laws  of  1911,  in  effect  July  21,  1911,  by  sub- 
stituting the  present  §  221a.  In  Matter  of  Schwarz,  209  N.  Y.  mem.,  it  was 
held  that  Matter  of  Jourdan,  supra,  was  applicable  to  the  present  statute. 
As  to  recovery  of  over-payment  of  tax,  vide  Matter  of  Scott,  208  N.  Y. 
602.  For  forms,  vide  post,  page  881.  Vide  opinion  of  comptroller,  dated 
January  27, 1913, 1  State  Department  Reports,  559,  as  to  exemptions  under 
Laws  of  1910,  chapter  706. 


1912. 

MATTER  OF  FERRUCIO  A.  VIVANTI,  206  N.  Y.  656,  af- 
firms, without  opinion,  146  App.  Div.  942,  which  affirms, 
without  opinion,  the  order  of  the  surrogate  on  authority 
of  138  App.  Div.  281,  and  modules  63  Misc.  618.  Same 
case  in  200  N.  Y.  513,  appeal  being  dismissed  on  ground 
that  order  of  surrogate  was  not  final. 

The  testator  died  a  resident  March  24,  1906.  The  decedent 
was  the  senior  partner  hi  the  firm  of  Vivanti  Brothers,  which 
carried  on  business  as  brokers  and  commission  merchants  in  silk, 
with  offices  in  Yokohama  and  New  York.  The  will  provided  for 
executor's  commissions  to  an  amount  exceeding  the  commissions 
prescribed  by  law  for  an  executor,  and  a  tax  was  imposed  on  the 
excess  commissions  as  provided  in  §  226.  (63  Misc.  618-621.) 

He  devised  a  portion  of  his  real  property  to  his  widow,  and  a 
life  interest  in  all  other  real  property.  The  surrogate  said  (63 
Misc.  618-621):  "The  ruling  of  the  appraiser  refusing  to  deduct 
from  the  appraisal  the  value  of  the  widow's  dower  right  is  af- 
firmed (Estate  of  Henry  I.  Barbey,  N.  Y.  Law  Journal,  March  2, 
1908,  and  cases  cited."  The  order  of  surrogate  so  far  as  it  af- 
fected the  question  of  commissions  and  dower  was  affirmed. 

One  of  the  two  main  questions  in  controversy  was  whether  cer- 
tain leasehold  property  hi  Japan  was,  for  transfer  tax  purposes, 


388  THE    COURT    OF   APPEALS    DECISIONS 

to  be  regarded  as  personal  property  and  therefore  taxable,  or  as 
real  property  and  not  taxable  under  doctrine  of  Matter  of  Swift , 
137  N;  Y.  77-88.  The  opinion  of  Japanese  barristers,  as  to  the 
nature  of  the  estate  or  interest  created  by  the  instruments  trans- 
ferring to  decedent  the  " leasehold"  hi  Japan,  was  received  in 
evidence  before  the  appraiser.  Translations  of  the  instruments 
certified  by  the  United  States  Consul-General  at  Yokohama  to 
be  "true  and  correct  copies  of  translations  of  the  original  title 
deeds  issued  by  the  Japanese  government,"  were  submitted  to 
the  surrogate  after  the  argument  of  the  appeal  and  before  the 
decision  thereof. 

The  Appellate  Division  (138  App.  Div.  281)  say,  page  281 : 
"It  would  seem  clear,  upon  all  the  testimony,  that  the  premises 
in  question  were  held  by  decedent  under  a  perpetual  lease,  re- 
serving rent,  and  that  under  the  law  of  Japan,  as  well  as 
under  our  own,  the  interest  of  the  decedent  therein  was  real 
property  and  not  personal,"  and  the  transfer  thereof  not 
taxable.1 

The  other  question  related  to  testator's  interest  in  the  good 
will  of  Vivanti  Brothers.  The  surviving  partner,  who  was  the 
executor  of  the  testator,  claimed  that  under  the  co-partnership 
agreements  he  succeeded  to  the  good-will  of  the  business,  subject 
to  certain  stipulations  specified  in  the  agreements;  that  the  good- 
will of  the  business  did  not  become  an  asset  of  the  estate  and  was 
not  subject  to  any  tax  under  the  Transfer  Tax  Law;  but  that  if 
this  contention  was  incorrect,  the  good-will,  upon  the  decedent's 
death  and  the  resulting  destruction  of  the  credit  which  his 
financial  responsibility  procured  for  the  firm,  became  value- 


The  Appellate  Division  (138  App.  Div.  281)  say,  page  282: 
"  It  is  well  settled  that  the  good-will  of  a  business  is  an  asset  of  the 
estate  in  the  hands  of  an  executor,  chargeable  against  him  on  his 
accounting.  While  its  precise  value  may  be  difficult  of  ascer- 
tainment in  any  way  short  of  actual  sale,  in  this  case  the  parties 
themselves  have  furnished  by  their  agreement  the  rule  by  which 
that  value  can  be  determined.  Under  his  original  agreement 
with  Tegner,  the  surviving  partner  was  to  pay,  hi  case  of  the 
retirement  or  death  of  the  senior  partner  (Vivanti)  to  him  or  to 
such  person  as  he  might  by  will  or  deed  appoint,  a  sum  equal  to 
one-third  of  the  annual  profits  of  the  business,  each  year  for  ten 
years,  in  payment  for  his  interest  in  the  good-will  of  the  firm  of 
Vivanti  Brothers. 


206  N.  Y.  656  389 

"When  William  Greenbaum  was  admitted  to  the  firm,  he 
bound  himself  to  pay  for  the  senior  partner's  interest  in  the 
good-will  the  same  sum,  in  like  annual  payments,  to  Vivanti  or 
in  case  of  his  death  to  his  wife,  and  on  her  decease  to  a  third  per- 
son. After  the  death  of  Vivanti,  when  Greenbaum  was  sole  sur- 
viving partner,  he  made  a  written  agreement  with  Vivanti's 
widow,  whereby  he  bound  himself  to  pay  for  rights  of  Vivanti  in 
the  good-will  of  the  business,  instead  of  the  one-third  originally 
provided,  twelve  and  one-half  per  cent,  of  the  net  profits  for  the 
first  year,  beginning  July  1, 1906,  and  fifteen  per  cent,  for  every 
year  thereafter  until  the  period  of  ten  years  had  expired,  or  until 
the  death  of  the  widow.  It  appears  that  the  latter's  expectancy 
of  life  is  more  than  the  period  limited.  The  appraiser  arrived  at 
the  value  of  the  good-will  by  averaging  the  profits  of  the  business 
for  the  four  years  preceding  decedent's  death,  taking  fifteen  per 
cent,  of  that  amount,  and  multiplying  it  by  ten,  giving  a  total  of 
$59,088.21. 

"The  learned  Surrogate  fixed  the  value  at  the  amount  of 
Vivanti's  share  of  the  profits  of  the  business  for  the  year  im- 
mediately preceding  his  death.  For  this  computation  there 
seems  to  be  no  authority. 

"The  amount  fixed  by  agreement  of  the  parties  must  deter- 
mine the  value.  But  an  error  has  been  made  in  the  computation 
for  the  percentage,  for  the  first  year  should  be  only  twelve  and 
one-half  per  cent,  instead  of  fifteen  per  cent.,  and  what  is  to  be 
determined  is  the  value  of  the  good-will  as  of  the  time  of  dece- 
dent's death, — that  is,  it  would  not  in  any  event  be  $59,088.21, 
but  the  present  value  of  such  a  sum  payable  in  ten  annual  install- 
ments. 

"The  order  appealed  from  must  therefore  be  reversed  without 
costs,  and  the  matter  remitted  to  the  Surrogate's  Court  for  fur- 
ther action  in  accordance  with  this  determination." 

The  appeal  taken  to  the  court  of  Appeals  was  dismissed  on  the 
ground  that  the  order  was  not  final  within  the  provisions  of  §  190 
of  the  Code  of  Civil  Procedure.  Thereupon  the  proceeding  was 
taken  up  again  before  the  appraiser,  and  he  made  a  report  which 
held  that  the  Japanese  leaseholds  in  perpetuity  were  not  subject 
to  the  transfer.1 

As  to  the  good-will  the  appraiser  reported:  "I  hereby  change 
the  value  of  the  good-will  of  decedent  in  the  firm  of  Vivanti 
Bros.,  as  fixed  and  determined  by  an  order  of  Hon.  Abner  C. 
Thomas  heretofore  made  herein,  bearing  date  the  20th  day  of 


390  THE    COURT   OP   APPEALS   DECISIONS 

June,  1910,  from  $59,088.21,  as  in  Appraiser  Dillon's  Report,  to 
the  following; 

1st  payment  March  24th,  1907 $  4,689.54 

2d    payment  March  24th,  1908 5,371.65 

3d    payment  March  24th,  1909 5,138.10 

4th  payment  March  24th,  1910 4,924.02 

5th  payment  March  24th,  1911 4,727.03 

6th  payment  March  24th,  1912 4,545.25 

7th  payment  March  24th,  1913 4,376.90 

8th  payment  March  24th,  1914 4,220.58 

9th  payment  March  24th,  1915 4,075.05 

10th  payment  March  24th,  1916 3,939.21 


Total $46,007.36 

"  This  makes  a  reduction  in  the  gross  personal  estate  of 
.$13,080.85." 

From  such  report,  the  surrogate,  in  pursuance  of  the  provi- 
sions of  §  231,  made  the  customary  order,  which  order  was 
affirmed  in  146  App.  Div.  942,  on  authority  of  the  opinion  on  the 
former  appeal,  138  App.  Div.  281,  and  the  comptroller  thereupon 
appealed  to  the  Court  of  Appeals  where  the  order  was  affirmed, 
without  opinion,  206  N.  Y.  656. 

As  to  good-will  vide  Matter  of  Jones,  28  Misc.  356-358,  affirmed,  172 
N.  Y.  575-587;  etiam  Matter  Vietor,  N.  Y.  Law  Journal,  May  8,  1913, 
and  other  cases  cited  sub  Good  Will. 

1  As  to  leasehold  vide  Matter  of  Althause,  63  App.  Div.  252,  affirmed, 
without  opinion,  168  N.  Y.  670;  Matter  of  Rosenbaum,  N.  Y.  Law  Journal, 
August  7,  1913,  opinion  quoted  sub  Leasehold. 


1913. 

MATTER  OF  ELIZABETH  B.  WHITE,  208  N.  Y.  64, 

Testatrix  died  March  2,  1908,  leaving  a  last  will  and  testa- 
ment which,  because  of  a  contest,  was  not  admitted  to  probate 
until  over  two  years  later.  The  transfer  tax  proceeding  was 
commenced  after  the  probate  of  the  will.  By  one  of  the  pro- 
visions of  the  will  a  grandson  of  testatrix  was  given  a  life  interest 
in  a  trust  fund,  the  remainder  going  to  a  religious  corporation 
exempt  from  the  tax.  The  grandson  did  not  live  to  obtain  any 
benefit  from  the  life  estate  as  he  died  November  8,  1908,  over  a 
year  before  the  will  was  admitted  to  probate.  The  court  held 


208  N.  Y.  64  391 

that  although  as  a  practical  matter  he  got  nothing  and  the  entire 
corpus  of  the  trust  went  to  a  religious  corporation  exempt  from 
the  tax,  still  the  life  interest  he  would  have  been  entitled  to  had 
he  been  fortunate  enough  to  live  until  the  will  was  admitted  to 
probate  was  subject  to  a  tax  of  $1,388.09. 

The  court  quote,  page  66,  that  portion  of  §  230  which  reads : 
"The  value  of  every  future  or  limited  estate,  income,  interest  or 
annuity  dependent  upon  any  life  or  lives  in  being,  shall  be  deter- 
mined by  the  rule,  method  and  standard  of  mortality  and  value 
employed  by  the  superintendent  of  insurance  in  ascertaining  the 
value  of  policies  of  life  insurance  and  annuities  for  the  determi- 
nation of  liabilities  of  life  insurance  companies,  except  that  the 
rate  of  interest  for  making  such  computation  shall  be  five  per 
centum  per  annum."  The  Appellate  Division,  149  App.  Div. 
428-431,  held  that:  "The  purpose  of  the  statute  (section  230  of 
the  Tax  Law)  was  to  afford  a  method  of  valuing  an  estate  or 
interest  not  capable  at  the  time  of  ascertainment  with  exactness 
because  of  the  uncertainty  attendant  upon  the  duration  of  an 
existing  life.  To  such  a  case  the  statute  clearly  applies,  but 
where  there  is  no  such  uncertainty  the  reason  for  the  statute  rule 
does  not  exist,  and  hence  the  statute  was  not  intended  to  apply 
in  such  a  case." 

In  reversing  the  order  of  the  Appellate  Division  the  court  say, 
page  67:  "The  tax  in  question  is  imposed  as  provided  in  the 
statute,  upon  the  transfer  of  and  not  upon  the  property.  It  is 
a  tax  upon  the  method  by  which  the  interest  of  the  life  bene- 
ficiary in  the  estate  of  the  testatrix  was  transferred  to  and 
acquired  by  him.  It  is  in  the  nature  of  an  excise  tax  on  the  right 
to  and  method  of  transfer  (Matter  of  Keeney,  194  N.  Y.  281). 
The  right  to  make  a  testamentary  disposition  of  or  the  right  to 
inherit  property  is  not  an  inherent  right;  nor  is  it  guaranteed  by 
the  fundamental  law.  Its  exercise  to  any  extent  depends  en- 
tirely upon  the  consent  of  the  Legislature  as  expressed  in  their 
enactments.  *  *  * 

"  (Page  67.)  The  true  test  by  which  the  tax  is  to  be  measured 
is  the  value  of  the  interest  or  estate  transferred  at  the  time  of 
the  transfer  thereof  (Matter  of  Sloane,  154  N.  Y.  109).  The 
interest  of  the  life  beneficiary  accrued  on  the  death  of  the  tes- 
tatrix and  its  value  as  of  the  time  of  that  occurrence  is  the  sum 
to  which  the  rate  per  centum  as  fixed  by  the  statute  sliould  be 
applied,  and  under  the  provision  within  §  222  the  tax  then  be- 
came due  and  payable.  Inasmuch  as  it  became  due  and  payable 


392  THE    COURT   OF   APPEALS   DECISIONS 

at  the  time  of  the  transfer  or  at  the  death  of  the  testatrix,  it 
would  seem  to  follow,  logically  and  necessarily,  that  the  amount 
of  it  should  b.e  determined  upon  the  conditions  then  existing. 
The  Legislature  enacted  that  such  determination  should  be 
made  through  the  use  of  the  rule  prescribed  in  and  by  the  lan- 
guage of  §  230,  already  quoted.  This  provision  is  mandatory  in 
its  language  and  the  statute  contains  no  other  applicable  or  in- 
tended to  apply  to  this  case.  *  *  * 

"  (Page  68.)  The  rule  promulgated  by  the  Legislature  effects 
certainty  and  uniformity,  which  the  principle  adopted  by  the 
Appellate  Division  would  tend  to  destroy." 

Vide  Matter  of  Jones,  28  Misc.  356-357,  affirmed,  172  N.  Y.  575;  Matter 
of  Hall,  36  Misc.  618;  Matter  of  Hutchinson,  105  App.  Div.  487;  Matter  of 
Henry  K.  Dyer,  N.  Y.  Law  Journal,  June  28,  1913;  Matter  of  Sidney, 
2  State  Department  Reports,  505;  Matter  of  Meyer,  209  N.  Y.  386- 
388. 

In  Matter  of  Curtis,  142  N.  Y.  219,  Mr.  Justice  Finch  said  at  page  223: 
"It  was  never  intended  by  the  law  to  tax  a  theory  having  no  real  substance 
behind  it.  As  was  said  in  Matter  of  Swift  (137  N.  Y.  86),  the  question  of 
taxation  is  one  of  fact  and  cannot  turn  on  theories  or  fictions.  This  case 
illustrates  one  result  of  the  contrary  doctrine.  Walter  Racey,  a  nephew 
named,  has  died  without  issue.  He  never  took  anything  beneficial  under 
the  will  and  his  estate  can  take  nothing,  and  yet  it  is  assessed  for  about  one 
thousand  dollars,  which  it  is  said  will  more  than  exhaust  all  that  he  left, 
and  in  return  for  which  he  received  actually  nothing  and  theoretically  only 
an  unsubstantial  legal  fabric.  That  is  too  unjust  to  be  borne.  *  *  * 
The  law  itself  gives  abundant  evidence  in  its  language  of  the  intent  to 
subject  only  real  and  beneficial  interests  to  taxation,  and  nothing  in  its 
policy  justifies  the  imposition  of  such  a  burden  where  no  corresponding 
benefit  has  been  received." 

Etiam  Mr.  Justice  Bartlett  in  Matter  of  Roosevelt,  143  N.  Y.  120-123: 
"It  is  not  to  be  assumed  that  the  legislature  intended  to  compel  the  citizen 
to  pay  a  tax  upon  an  interest  he  may  never  receive,  and  the  reasonable 
construction  of  this  statute  leads  to  no  such  unjust  result.'! 


1913. 

MATTER  OF  NORMAN  I.  REES,  208  N.  Y.  590,  affirms, 

without   opinion,   153   App.   Div.   900,   which   affirmed, 

without  opinion,  order  of  surrogate. 

The  testator  died  a  resident  August  3,  1910.  The  principal 
item  of  his  estate  consisted  of  8,933  shares  of  stock  in  Hans 
Rees'  Sons,  a  New  York  corporation,  engaged  in  the  tanning 
of  leather,  and  the  controversy  in  this  proceeding  turned  en- 


208  N.  Y.  590  393 

tirely  upon  the  value  to  be  placed  upon  this  stock.  The  total 
capitalization  of  the  company  was  $1,000,000,  divided  into 
10,000  shares  at  $100  each. 

The  business  of  Hans  Rees'  Sons  was  established  many  years 
ago  by  one  Hans  Rees,  father  of  the  decedent.  In  or  about  the 
year  1888,  Hans  Rees  died,  and  the  decedent,  Norman  I.  Rees, 
with  two  of  his  brothers,  succeeded  to  the  business.  The 
brothers  subsequently  dropped  out  of  the  business,  and  until 
1901  Norman  I.  Rees  conducted  the  business  individually,  and 
without  any  partners.  In  1901  the  business  was  incorporated, 
$500,000  of  stock  being  issued  to  pay  therefor.  Subsequently, 
the  stock  was  increased  to  $750,000,  and  was  paid  for  out  of 
the  accumulated  earnings  of  the  business.  A  year  before  Mr. 
Rees'  death,  1909,  the  stock  was  increased  to  $1,000,000. 

From  1885  until  the  date  of  his  death,  Norman  I.  Rees  was 
the  dominating  power  in  creating  and  erecting  the  business, 
and  in  managing  it.  He  made  all  the  purchases  of  hides,  di- 
rected the  tanning  operations  and  the  selling  policy  of  the  com- 
pany, and  its  operation  was  almost  wholly  dependent  upon  his 
personality.  Until  the  time  of  his  death,  all  commercial  paper 
issued  by  the  company  was  personally  endorsed  by  Mr.  Rees, 
and  no  money  was  borrowed  by  the  company  except  upon  his 
personal  endorsement.  None  of  the  stock  of  the  company  was 
ever  offered  for  sale  on  the  market,  and  there  had  been  no 
transactions  of  sale  in  the  stock,  with  the  exception  that  Mr. 
Rees  had  given  some  of  his  stock  to  relatives  and  old  employees, 
and  he  had  sold  certain  shares  of  stock  to  them  on  special  terms 
and  conditions. 

The  balance  sheet  of  the  company  as  of  date  of  July  31,  1910, 
which  was  substantially  unchanged  on  August  3,  1910,  the  date 
of  death,  showed  book  assets  of  $1,661,677.26,  with  liabilities, 
including  capital  stock,  of  $1,407,940.05,  and  an  apparent  sur- 
plus of  $253,737.21,  representing  a  book  value  of  $125  a  share. 
This  book  value  was  maintained  by  failing  to  make  proper 
deductions  for  depreciation  and  over-charges  on  building  and 
machinery,  and  was  based  upon  a  large  over-valuation  of  the 
stock  on  hand.  Making  these  deductions,  the  book  value  would 
be  reduced  to  $104  a  share. 

The  four  experts  of  the  executors  valued  the  stock  from  $35 
to  $70  a  share.  The  one  expert  called  on  behalf  of  the  comp- 
troller valued  the  stock  at  $90.  The  dividends  were  17%  in 
1907,  none  in  1908,  and  7%  in  each  of  the  years  1909  and  1910. 


394  THE   COURT   OF   APPEALS   DECISIONS 

The  net  earnings  averaged  7.2%  per  annum  for  the  three 
years  1908-1910. 

The  executors  claimed  that  the  tax  should  be  based  upon 
"market  value"  and  not  upon  book  value.  The  State  Comp- 
troller took  the  position  that,  inasmuch  as  there  was  no  market 
for  this  stock  and  there  had  been  no  sales,  the  proper  value  of 
the  stock  for  the  purpose  of  the  transfer  tax  was  its  book  or 
intrinsic  value,  and  not  any  speculative  or  conjectural  value 
that  so-called  experts  might  chance  to  place  on  it.  Appraiser 
Blau  in  his  report  said:  "In  the  affidavit  of  assets  submitted 
in  the  proceedings  to  fix  the  transfer  tax  upon  this  estate,  the 
value  of  the  stock  is  given  at  $70  per  share.  Expert  accountants 
employed  both  by  the  State  Comptroller  and  the  estate  made 
thorough  examinations  of  the  books  of  the  corporation,  sub- 
mitted statements  of  the  value  of  said  stock  at  the  decedent's 
death  and  testified  at  length  to  such  values.  Not  only  are 
the  statements  so  submitted  and  the  evidence  adduced  con- 
flicting, but  there  is  a  material  difference  of  opinion  as  to  the 
market  value  of  said  stock  in  the  minds  of  the  experts  produced 
by  the  estate.  The  market  value  of  said  stock  originally  fixed 
by  the  expert  accountant  for  the  State  Comptroller  is  $120 
per  share,  based  upon  the  book  value  of  the  assets  in  back  of 
such  stock.  It  would  seem  from  the  testimony  that  in  making 
said  valuation  no  sufficient  allowance  was  made  for  deprecia- 
tion, etc.,  although  consideration  was  given  to  that  feature,  as 
appears  by  the  statement  of  the  expert  employed  by  the  State 
Comptroller.  The  very  lengthy  and  exhaustive  testimony  sub- 
sequently adduced,  which  shows  that  the  depreciation  referred 
to  is  more  extensive  than  at  first  appeared,  that  the  book 
value  of  the  real  estate  constituting  part  of  the  assets  had  been 
arbitrarily  increased  by  the  officers  of  the  company,  that  no 
maintenance  account  had  been  charged  against  the  item  of 
machinery,  tools  and  fixtures,  that  no  sufficient  allowance  for 
depreciation  upon  machinery,  tools  and  fixtures  at  Asheville, 
upon  the  customary  percentages  had  been  made,  that  sums  of 
money  had  been  arbitrarily  credited  to  the  item  of  Profit  and 
Loss  and  carried  to  the  surplus  of  the  corporation  without  ex- 
planation and  which  sums  should  have  been  properly  deducted 
from  the  intrinsic  value  of  the  assets,  that  the  cost  of  the  finished 
product  contained  in  the  inventory  was  less  by  a  considerable 
amount  than  appears  in  said  inventory,  together  with  other 
evidence  all  tending  to  establish  a  material  reduction  in  the 


208  N.  Y.  590  395 

assets  of  the  corporation  than  originally  taken  into  consideration 
by  the  expert  employed  by  the  State  Comptroller,  induced  the 
latter  to  modify  his  valuation  of  this  particular  stock  by  re- 
ducing the  same  to  $90  per  share.  In  this  valuation  the  said 
expert  has  taken  into  consideration  all  elements  of  depreciation 
including  the  personal  element  of  the  elimination  from  the 
business  of  the  corporation  of  the  decedent.  After  due  delibera- 
tion and  consideration  of  all  the  testimony,  including  that  ad- 
duced subsequent  to  the  close  of  the  hearings,  for  which  latter 
purpose  said  hearings  were  reopened  at  the  request  of  the  es- 
tate's attorney,  I  am  of  the  opinion  that  the  only  additional 
reduction  in  the  value  of  this  stock  should  be  based  upon  the 
probable  insufficient  importance  attached  by  the  Comptroller's 
expert  to  the  elimination  of  the  decedent  from  the  business  of 
the  corporation,  a  feature  given  prominence  by  Mr.  Surrogate 
Fowler  in  the  matter  of  the  Estate  of  Sigmund  J.  Bach,  and  I 
therefore  place  the  market  value  of  said  stock  at  $85  per  share." 
The  Surrogate,  in  affirming  the  report,  said:  "A  careful  ex- 
amination of  the  testimony  taken  before  the  Appraiser  and  of 
the  evidence  submitted  in  regard  to  the  value  of  decedent's 
holdings  of  stock  in  the  Hans  Rees  Company  leads  me  to  be- 
lieve that  any  errors  made  by  the  Appraiser  in  the  admission 
or  rejection  of  testimony  are  not  prejudicial  to  the  appellant, 
and  that  the  value  placed  upon  the  stock  of  Hans  Rees  corpora- 
tion by  the  Appraiser  is  reasonable  and  represents  its  fair  market 
value  at  the  date  of  decedent's  death.  The  value  of  stock  in  a 
corporation,  the  shares  of  which  are  not  customarily  bought  and 
sold  in  the  open  market,  is  not  capable  of  determination  with 
mathematical  certainty;  it  can  only  be  ascertained  with  rea- 
sonable certainty,  and  I  am  inclined  to  think  that  the  Ap- 
praiser's estimate  of  the  value  of  decedent's  holdings  in  the 
Hans  Rees  Company  is  reasonable  and  is  justified  by  the  evi- 
dence taken  before  him." 

Vide  subdivision  7,  §  220.  Matter  of  Brandreth,  28  Misc.  468,  affirmed, 
169  N.  Y.  437;  Matter  of  Jones,  28  Misc.  356-358,  affirmed,  172  N.  Y.  575; 
Matter  of  Cook,  50  Misc.  487-493,  affirmed,  except  as  to  rate  of  tax,  187 
N.  Y.  253-262;  Matter  of  Smith,  71  App.  Div.  602;  Matter  of  Curtice, 
111  App.  Div.  230,  affirmed,  without  opinion,  185  N.  Y.  543;  Matter  of 
Chappell,  151  App.  Div.  774;  Matter  of  Bach,  N.  Y.  Law  Journal,  No- 
vember 21,  1911;  Matter  of  Malcolmson,  id.,  June  20,  1912;  Matter  of 
Valentine,  id.,  March  13,  1913,  and  other  cases  cited  sub  Closely  Held 
Stock. 


396  THE    COURT   OF   APPEALS   DECISIONS 

1913. 

MATTER  OF  ROBERT  SCOTT,  208  N.  Y.  602,  affirms,  with- 
out opinion,  156  App.  Div.  929,  which  affirmed,  without 
opinion  (two  Justices  dissenting),  order  of  Surrogates' 
Court. 

Intestate  died  a  resident  July  24,  1910.  Chap.  706,  Laws  of 
1910,  was  the  statute  in  force  at  that  time.  The  sole  next  of 
kin  and  heir  at  law  was  a  brother,  and  the  entire  net  estate  of 
$129,902.41  passed  to  him.  The  appraiser's  report  and  the 
order  of  the  surrogate  declared  that  of  this  amount  the  sum  of 
$500  was  exempt,  and  taxed  the  transfer  as  follows: 

$     500.00 exempt 

25,000.00  at  1% $   250.00 

75,000.00  at  2% 1,500.00 

29,402.41  at  3% 882.07 


Total  Tax $2,632.07 

The  order  of  surrogate  was  entered  on  September  21,  1911, 
and  no  appeal  was  taken  therefrom. 

The  decision  of  the  Court  of  Appeals  in  Matter  of  Jourdan, 
206  N.  Y.  653,  was  handed  down  the  following  June,  and  there- 
upon the  administrators  made  an  application  to  the  Surrogates' 
Court  of  New  York  County  for  an  order  modifying  the  said 
order  fixing  tax,  with  respect  to  the  amount  of  the  tax  assessed 
therein,  which  said  application  was  granted  and  an  order  entered 
thereon  in  the  office  of  the  Surrogates'  Court  on  August  9,  1912, 
amending  the  said  order  fixing  tax  by  reducing  the  amount  of 
transfer  tax  as  assessed  therein  from  $2,632.07  to  the  sum  of 
$2,382.07. 

Surrogate  Cohalan  said:  "*  *  *  No  appeal  was  taken 
from  the  order  fixing  tax.  As  it  is  conceded  that  the  report  of 
the  appraiser  was  correct,  the  error  made  in  calculating  the 
amount  of  tax  to  which  the  interest  of  William  Scott  was  liable 
was  a  clerical  error  committed  while  performing  the  ministerial 
act  of  assessing  the  tax. 

"  The  computation  of  the  tax  being  a  mathematical  operation, 
such  a  mistake  was  necessarily  a  mistake  of  fact.  The  surrogate 
may  correct  such  a  mistake,  although  the  time  to  appeal  from 
the  order  has  expired.  (Matter  of  Henderson,  157  N.  Y.  423; 
Matter  of  Earle,  74  App.  Div.  458;  Matter  of  Willets,  119  App. 
Div.  119;aff'dl90N.  Y.  527). 


209  N.  Y.  386  397 

"  As  the  jurisdiction  of  the  surrogate  to  assess  a  transfer  tax  is 
derived  exclusively  from  the  Transfer  Tax  Law,  the  assessment 
of  the  tax  at  a  rate  in  excess  of  that  prescribed  by  statute  was 
without  jurisdiction,  and  the  order  of  assessment  was  void  to 
that  extent.  The  surrogate  may  correct  such  an  order,  although 
no  appeal  therefrom  was  taken  within  the  time  prescribed  by 
statute.  (Matter  of  Coogan,  45  App.  Div.  628;  aff'd  162  N.  Y. 
613;  Matter  of  Scrimgeour,  175  N.  Y.  507;  Matter  of  Silliman, 
79  App.  Div.  98;  aff'd  175  N.  Y.  513.) l  Application  to  modify 
order  fixing  tax  granted." 

The  order  modifying  the  original  order  fixed  the  tax  on  the 
following  basis: 

$       500.00 exempt 

25,000.00  at  1% $    250.00 

100,000.00  at  2% 2,000.00 

4,402.41  at  3% 132.07 


Total  Tax , $2,382.07 

Vide  footnote,  supra,  page  386,  Matter  of  Jourdan,  206  N.  Y.  653. 

Matter  of  Townsend,  153  App.  Div.  85,  appeal  pending;  Matter  of 
Van  Nest,  N.  Y.  Law  Journal,  November  8,  1913,  opinion  quoted,  post, 
page  885. 

For  forms  on  application  for  modification  of  order  vide  page  881. 


1913. 

MATTER  OF  MARY  R.  MEYER,  209  N.  Y.  386. 

The  court  say,  page  387:  "The  estate  of  the  testatrix  con- 
sisted of  personal  property  of  an  inventoried  value  less  than  the 
expenses  of  administration,  namely,  $153.25,  and  an  one-half 
interest  in  the  equity  of  redemption  in  certain  mortgaged  real 
estate,  which  interest  in  the  transfer  tax  proceeding  was  on 
December  31,  1909,  appraised  at  about  $8,000.  On  July  13, 

1911,  the  Surrogate's  Court  fixed  the  transfer  tax  on  certain 
legacies  at  $297.08.     The  real  estate  was  sold  September  25, 

1912,  under  the  judgment  in  the  action  to  foreclose  the  mortgage 
upon  it,  for  the  sum  due  and  unpaid  upon  the  mortgage.    The 
executor  has  not  at  any  time,  therefore,  had  any  money  or  prop- 
erty with  or  from  which  he  could  pay  any  of  the  legacies  or  the 
transfer  tax.  The  Tax  Law  (section  236)  provides: ' No  executor, 
administrator  or  trustee  shall  be  entitled  to  a  final  accounting 
of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  provi- 


398  THE    COURT   OF   APPEALS   DECISIONS 

sions  of  this  article  unless  he  shall  produce  a  receipt,  duly 
issued  for  the  payment  of  the  tax. 

"  The  petition  alleges  as  the  sole  ground  for  vacating  the  tax 
that  the  appraisal  in  the  transfer  tax  proceeding  was  grossly 
inaccurate,  that  in  fact  there  was  at  that  time,  within  the  statu- 
tory provisions  relating  to  the  transfer  tax,  no  transferable  prop- 
erty and  consequently  no  transfer  to  be  taxed.  The  petition 
was  justly  and  properly  denied  under  the  principles  stated  in 
Matter  of  Lowry  (89  App.  Div.  226)  and  Matter  of  White 
(208  N.  Y.  64) ,  and  the  order  appealed  from  should  be  affirmed. 

"  The  provisions  of  section  236  of  the  Tax  Law  above  quoted 
is  not  applicable,  however,  to  the  final  accounting  of  the  estate 
in  question  under  the  facts  presented  in  the  present  record.  The 
situation  under  our  consideration  is:  The  appraisal  of  the  estate 
honestly  and  legally  made  and  the  nature  of  the  bequests  re- 
quired that  the  transfer  tax  be  fixed  at  $297.08.  It  came  to  pass, 
within  the  administration  of  the  estate,  without  fault  or  de- 
linquency upon  the  part  of  the  executor,  that  the  estate  yielded 
a  value  less  than  the  expenses  of  its  administration.  Therefore 
the  executor  did  not  receive  or  acquire  money  or  property  usable 
for  the  payment  of  the  transfer  tax.  If  he  is  not  entitled  to  a 
final  accounting  and  discharge  from  his  office  unless  he  shall 
produce  a  receipt  for  the  payment  of  the  transfer  tax,  he  must 
pay  it  from  his  individual  moneys  or  property,  although  he  has 
completely  and  honestly  fulfilled  the  duties  of  his  executor- 
ship.  We  think  the  Legislature  did  not  intend  or  enact  such 
result.  *  *  * 

"(Page  391.)  A  case  in  which,  after  a  hearing  upon  proper 
notice  to  all  parties  interested,  it  is  adjudged  that  an  executor, 
administrator  or  trustee  has  been  unable  to  get  or  collect  the 
moneys  for  the  payment  of  the  tax  from  the  transferred  prop- 
erty through  the  destruction  of  the  property  or  obliteration  of 
its  value  during  the  process  of  administration,  without  fault  or 
delinquency  upon  his  part,  is  excepted  from  the  general  pro- 
vision through  implication. 

"  (Page  391.)  *  *  *  In  this  case,  under  the  facts  as  presented, 
the  value  of  the  interest  or  property  the  transfer  of  which  was 
taxed  has  vanished  during  the  administration  and  the  executor 
has  been  unable  to  get  from  the  estate  moneys  for  the  payment 
of  the  tax.  The  Legislature  did  not  impose  a  personal  liability 
under  such  conditions." 

Vide  cases  cited  sub  Vacating  Decree,  post,  page  878. 


209  N.   Y.   MEM.  399 

As  to  lien  of  tax  vide  Kitching  v.  Spear,  26  Misc.  436;  Brown  v.  Law- 
rence Park  Realty  Company,  133  App.  Div.  753;  Matter  of  Bushnell, 
73  App.  Div.  325-328,  supra,  page  275,  affirmed,  without  opinion,  172  N.  Y. 
649;  Matter  of  Strail,  195  N.  Y.  575,  supra,  page  368;  Matter  of  Merritt, 
155  App.  Div.  228-232. 

Vide  §  447  of  Code  of  Civ.  Proc.  as  amended  by  Laws  of  1911,  Chap.  24. 


1913. 

MATTER  OF  HERMAN  SCHWARZ,  209  N.  Y.  mem.,  affirms, 
without  opinion,  166  App.  Div.  931,  which  affirms  order 
of  Surrogate,  on  the  dissenting  opinion  of  Jenks,  P.  J., 
in  Matter  of  Jourdan  (151  App.  Div.  8,  11-14;  adopted 
by  the  Court  of  Appeals,  206  N.  Y.  653). 

Testator  died  a  resident  on  December  27,  1911.  The  transfer 
tax  appraiser  in  his  report  found  that  the  decedent  left  a  net 
estate  of  $162,998.49.  Of  this  amount  $600  was  bequeathed  to 
his  daughters  and  sons,  and  as  the  sum  so  bequeathed  was  less 
than  the  exemption  amount  provided  for  hi  subdivision  1  of 
§  221a,  the  interest  so  passing  was  declared  to  be  exempt.  The 
balance  of  the  net  estate,  $162,398.49,  was  left  to  the  widow. 
The  appraiser,  after  deducting  the  $5,000  exemption  pro- 
vided for  hi  said  subdivision  1  of  §  221a,  reported  as  taxable 
$157,398.49. 

When  the  report  of  the  appraiser  was  filed  the  pro  forma 
order  entered  by  the  Surrogate,  under  the  provisions  of  first 
sentence  of  §  231,  taxed  the  transfer  of  the  said  $62,398.49  to  the 
widow  as  follows: 

$5,000.00 exempt 

50,000.00  at  1% $   500.00 

107,398.49  at  2% 2,147.97 


$162,398.49  $2,647.97 

From  this  pro  forma  order  the  State  Comptroller  appealed  to 
the  Surrogate  under  the  provisions  of  §  232.  The  Comptroller 
contended  that  the  tax  on  the  transfer  to  the  widow  of  the 
$162,398.49  should  have  been  taxed  on  the  following  basis: 

$  5,000.00  exempt 

45,000.00  at  1% $   450.00 

112,398.49  at  2% 2,247.97 


$162,398.49  $2,697.97 


400  THE   COURT   OF   APPEALS   DECISIONS 

Surrogate  Fowler  on  this  appeal  under  §  232  affirmed  the 
pro  forma  order  entered  by  him  under  §  231.  His  opinion  is 
reported  in  the  New  York  Law  Journal  of  September  19,  1912, 
and  is  as  follows: 

"The  decision  of  the  Court  of  Appeals  in  the  Matter  of 
Jourdan  (206  N.  Y.  653),  would  seem  to  authorize  the  computa- 
tion of  tax  assessable  under  chapter  732  of  the  Laws  of  1911,  as 
follows:  One  per  cent,  on  the  first  $50,000  of  taxable  interest,1 
2  per  cent,  on  the  next  $250,000,  3  per  cent,  on  $1,000,000,  and 
4  per  cent,  on  any  amount  in  excess  of  $1,000,000.  The  decision 
of  this  court  in  the  Matter  of  Lewis  (Surr.  Decs.,  1912,  p.  573), 
adopting  a  different  method  of  computation,  was  made  after  the 
Appellate  Division  of  the  Second  Department  had  reversed  the 
order  of  the  Surrogate  in  the  Matter  of  Jourdan  (70  Misc.  59), 
and  before  the  Court  of  Appeals  had  reversed  the  order  of  the 
Appellate  Division  and  affirmed  the  order  of  the  Surrogate. 
While  the  language  of  §  221a  of  chapter  732  of  the  Laws  of  1911 
is  not  exactly  similar  to  that  employed  in  §  221  of  chapter  706 
of  the  Laws  of  1910  (under  which  the  decision  of  the  Court  of 
Appeals  in  the  Matter  of  Jourdan  was  made),  it  is  sufficiently 
so  to  make  that  decision  controlling  in  regard  to  the  computation 
of  tax  under  the  law  of  1911.  Besides,  any  doubt  as  to  the 
meaning  of  a  statute  imposing  a  tax  should  be  resolved  in  favor 
of  the  citizen." 

This  decision  of  the  Surrogate  was  affirmed  by  the  Appellate 
Division  and  the  Court  of  Appeals,  Justice  Laughlin  dissenting 
with  an  opinion,  156  App.  Div.  931-932. 

Vide  Matter  of  Scott,  208  N.  Y.  602  as  to  recovery  of  over-payment  of 
tax,  §  225;  Matter  of  Hoople,  179  N.  Y.  308,  and  cases  cited  sub  Vacating 
Decree.  For  forms  vide  page  881. 

1  The  case  of  Matter  of  Kip,  N.  Y.  Law  Journal,  March  28,  1912,  estab- 
lished the  practice  as  to  the  exemptions  under  §  221a,  the  state  comptroller 
not  appealing  from  the  decision  of  the  surrogate  overruling  the  appraiser. 
Surrogate  Fowler  in  his  opinion  said:  "The  executors  of  the  estate  of 
decedent  appeal  from  the  order  assessing  a  tax  upon  his  estate. 

"  The  decedent,  who  was  a  resident  of  New  York,  died  on  the  6th  of  Octo- 
ber, 1911.  He  bequeathed  his  entire  estate  to  his  two  children,  and  the 
transfer  tax  appraiser  reported  that  the  taxable  value  of  the  share  of  each 
legatee  was  the  sum  of  $96,490.42.  The  executors  contend  that  under  the 
provisions  of  chapter  732  of  the  Laws  of  1911,  $5,000  of  the  amount  be- 
queathed to  each  of  decedent's  children  is  exempt  from  taxation,  and  that 
the  appraiser  should  have  ascertained  the  taxable  interest  of  each  of  the 
legatees  by  deducting  the  sum  of  $5,000  from  the  entire  amount  of  each 
legacy. 


209   N.    Y.    MEM.  401 

Chapter  732  of  the  Laws  of  1911,  amending  the  Transfer  Tax  Law  of 
1910,  became  a  law  on  the  21st  day  of  July,  1911,  and  as  the  decedent  died 
on  the  6th  of  October,  1911,  the  transfer  tax  upon  his  estate  is  governed  by 
the  law  as  amended  in  1911.  Sections  220  and  221a  of  chapter  732  of  the 
Laws  of  1911  read  as  follows: 'A  tax  shall  be  and  is  hereby  imposed  *  *  * 
upon  a  transfer  taxable  under  this  article  of  property  *  *  *  of  an 
amount  in  excess  of  the  value  of  five  thousand  dollars  to  any  father,  eon, 
etc.'  The  word  'excess'  when  applied  to  things  that  are  capable  of 
mathematical  definition  or  expression  is  usually  understood  to  mean  that 
amount  by  which  one  number  or  quantity  exceeds  another.  With  this 
understanding  of  the  word  'excess,'  the  language  above  quoted  clearly 
indicates  that  if  the  value  of  the  property  transferred  is  not  in  excess  of 
$5,000  no  part  of  it  is  taxable.  After  thus  specifying  the  minimum  amount 
that  must  be  transferred  before  any  part  of  it  is  subject  to  taxation,  the 
Legislature  proceeded  to  prescribe  the  rate  at  which  the  property  trans- 
ferred should  be  taxed:  'One  per  centum  on  any  amount  in  excess  of  five 
thousand  dollars  up  to  the  sum  of  fifty  thousand  dollars.'  Having  pro- 
vided in  the  first  part  of  the  paragraph  for  an  absolute  exemption  from 
taxation  if  the  amount  transferred  did  not  exceed  $5,000,  it  would  not  be 
necessary  to  repeat  the  words  'in  excess  of  in  the  clause  prescribing  the 
rate  of  taxation  if  it  was  not  intended  that  this  amount  should  be  exempt 
from  the  application  of  such  rates  even  when  the  total  amount  transferred 
was  more  than  $5,000.  In  other  words,  if  the  Legislature  had  intended  to 
limit  the  exemption  to  those  cases  where  the  entire  amount  transferred  did 
not  exceed  $5,000,  the  subsequent  use  of  the  words  'in  excess  of  would 
be  a  needless  repetition,  and  the  words  would  be  entirely  superfluous. 
In  order  to  express  that  meaning  the  clause  should  read:  'One  per  centum 
on  any  amount  up  to  the  sum  of  fifty  thousand  dollars.'  But  when  the 
language  of  the  act,  construed  literally  and  in  accordance  with  the  ordinary 
signification  of  the  words  employed,  expresses  a  definite  idea  in  conformity 
with  the  object  sought  to  be  accomplished  by  the  Legislature,  it  will  not, 
for  the  purpose  of  imputing  a  different  intent  to  the  Legislature  or  placing 
a  different  construction  upon  the  act,  be  presumed  that  there  is  in  the  act 
any  needless  repetition  of  words.  If  all  the  words  used  express  a  definite 
meaning,  it  will  not  be  presumed,  for  the  purpose  of  giving  the  words 
another  meaning,  that  any  of  them  are  superfluous. 

"  The  Act  of  1910,  which  is  amended  by  the  Act  of  1911,  provided:  'No 
such  tax  shall  be  imposed  upon  property  transferred  to  a  father,  etc.  *  *  * 
if  the  amount  so  transferred  is  the  sum  of  five  thousand  dollars  or  less; 
but  if  the  amount  so  transferred  to  a  father,  etc.,  is  over  five  thousand 
dollars,  the  excess  shall  be  taxable  at  the  rate  of  one  per  centum  *  *  * 
Prior  to  the  enactment  of  the  amendment  of  1911  the  Surrogates'  Courts 
of  the  various  counties  of  this  State  were  entering  orders  under  the  Act  of 
1910  exempting  from  taxation  all  transfers  to  a  father,  etc.,  when  the 
amount  transferred  did  not  exceed  $5,000,  and  were  assessing  a  tax  only 
upon  the  amount  transferred  in  excess  of  $5,000.  The  Legislature  of  1911 
must  be  deemed  to  have  had  knowledge  of  the  construction  which  the 
courts  had  placed  upon  the  Act  of  1910,  and  if  they  had  intended  to  change 
its  provisions  so  as  to  limit  the  exemption  to  cases  where  the  entire  amount 
transferred  was  less  than  $5,000,  it  is  reasonable  to  suppose  that  they  would 

26 


402  THE    COURT   OF   APPEALS   DECISIONS 

have  expressed  their  intention  in  clear  and  unmistakable  terms.  The  fact, 
that  the  words  used  in  regard  to  exemptions  are  practically  similar  to  those 
used  in  the  Act  of  1910,  indicates  that  the  Legislature  did  not  intend  to 
limit  the  exemption  of  $5,000  to  those  cases  where  the  entire  amount 
transferred  to  the  legatee  was  less  than  $5,000,  but  that  they  intended 
that  it  should  apply  to  a  transfer  made  to  a  father,  son,  etc.,  irrespective  of 
the  amount  transferred,  and  that  the  rates  of  taxation  prescribed  by  the 
statute  should  apply  only  to  the  amount  transferred  in  excess  of  the  sum  of 
$5,000.  It  would  therefore  appear  that  the  order  fixing  tax  should  be 
modified  by  deducting  the  sum  of  $5,000  from  the  amount  transferred  to 
each  of  decedent's  children." 

Vide  etiam  Matter  of  Eaton,  79  Misc.  69. 


1913. 

People  ex  rel.  Lown  v.  Cook,  209  N.  Y.  mem.,  affirms,  with- 
out opinion,  158  App.  Div.  74. 

The  tax  must  be  paid  to  the  state  comptroller  in  a  county  in 
which  the  office  is  salaried,  and  in  other  counties,  to  the  county 
treasurer.  Vide  last  sentence  of  §  222,  supra,  page  7,  and  first 
sentence  of  §  229,  supra,  page  13;  etiam  post,  page  757. 

If  the  tax  is  not  paid  to  the  proper  official  within  eighteen 
months  from  the  accrual  thereof,  interest  will  be  charged  at 
the  rate  of  ten  per  centum  per  annum  from  the  time  the  tax 
accrued  (§  223,  supra,  page  7),  even  though  payment  has  been 
sent  to  the  wrong  official  before  the  expiration  of  the  eighteen 
months. 

As  to  reduction  of  penalty,  vide  post,  page  722.  For  form  of  application 
under  §  223  for  reduction  of  penalty  vide  post,  page  723. 


PRIOR  STATUTES 

The  present  statute  is  set  forth  at  page  3. 

In  applying  the  principles  of  the  decisions  it  frequently 
becomes  necessary  to  know  the  exact  phraseology  of  the 
statute  under  which  the  particular  decision  in  question 
was  rendered.  The  transfer  tax  practitioner  has  to  consult 
the  statute  not  only  for  this  reason  but  also  in  matters 
involving  the  postponed  taxation  of  remainders,  and  in 
transfers  intended  to  take  effect  at  or  after  death  under 
subdivision  4  of  §  220.  Where  the  taxation  of  a  remainder 
has  been  postponed  until  the  death  of  the  life  tenant 
(Matter  of  Roosevelt,  143  N.  Y.  120;  Matter  of  Seaman, 
147  N.  Y.  69-75;  Matter  of  Howe,  86  App.  Div.  286, 
affirmed,  without  opinion,  176  N.  Y.  570;  Matter  of 
Babcock,  37  Misc.  445,  affirmed,  without  opinion,  81 
App.  Div.  645;  Matter  of  Granfield,  79  Misc.  374;  Matter 
of  Ely,  157  App.  Div.  658),  it  is  necessary  to  refer  to  the 
statute  hi  force  at  the  date  of  the  death  of  the  testator 
who  created  the  life  estate.  Matter  of  Davis,  149  N.  Y. 
539;  Matter  of  Sloane,  154  N.  Y.  109-113;  Matter  of 
Meyer,  83  App.  Div.  381 ;  Matter  of  Gibbes,  84  App.  Div. 
510,  affirmed,  without  opinion,  176  N.  Y.  565;  Matter  of 
Mason,  120  App.  Div.  738,  affirmed,  without  opinion, 
sub  nom.  Matter  of  Naylor,  189  N.  Y.  556;  People  ex  rel. 
Ripley  v.  Williams,  69  Misc.  402.  Again  where,  within 
the  meaning  of  the  provisions  of  subdivision  4  of  §  220, 
there  has  been  a  transfer  intended  to  take  effect  in  posses- 
sion and  enjoyment  at  or  after  the  death  of  the  transferee, 
the  statute  hi  force  at  the  tune  such  transfer  was  made 
should  be  consulted.  Matter  of  Keeney,  194  N.  Y.  281- 
287,  sustained  in  222  U.  S.  525  sub  nom.  Keeney  v.  New 
York;  Matter  of  Webber,  151  App.  Div.  539;  Matter  of 
Dwight,  N.  Y.  Law  Journal,  October  8,  1911,  affirmed, 
without  opinion,  149  App.  Div.  912,  opinion  quoted  post, 

403 


404 


PRIOR   STATUTES 


page  872;  Matter  of  Atterbury,  N.  Y.  Law  Journal, 
March  25,  1913,  opinion  quoted  post,  page  871. 

There  have  been  six  occasions  upon  which  the  legisla- 
ture has  enacted  a  complete  statute.  These  six  complete 
statutes  are  given  exactly  reproduced  from  the  Session 
Laws.  They  are:  Laws  of  1885,  chapter  483,  in  effect 
June  30, 1885;  Laws  of  1887,  chapter  713,  in  effect  June  25, 
1887;  Laws  of  1892,  chapter  399,  in  effect  May  1,  1892; 
Laws  of  1896,  chapter  908,  in  effect  June  15,  1896;  Laws 
of  1905,  chapter  368,  in  effect  June  1,  1905;  Laws  of  1909, 
chapter  62,  article  X  (Consolidated  Laws,  vol.  V,  pages 
4118  to  4135)  in  effect  February  17,  1909.  The  impor- 
tant amendments  to  these  six  acts  follow  the  act  to  which 
the  amendment  refers. 


Property 


by  will, 
etc.,  to 
other  than 
to  father, 
mother 
and  others 
named, 
liable  to 
tax  of 
five  dollars 
on  every 
hundred 
dollars. 


Laws  of  1885,  Chap.  483,  in  effect  June  30, 1885 

AN  ACT  to  tax  gifts,  legacies  and  collateral  in- 
heritances in  certain  cases. 

PASSED  June  10, 1885;  three-fifths  being  present. 

The  People  of  the  State  of  New  York,  represented  in 
Senate  and  Assembly,  do  enact  as  follows: 

SECTION  1.  After  the  passage  of  this  act,  all  prop- 
erty which  shall  pass  by  will  or  by  the  intestate  laws 
of  this  state  from  any  person  who  may  die  seized 
or  possessed  of  the  same  while  being  a  resident  of 
the  state,  or  which  property  shall  be  within  this 
state,  or  any  part  of  such  property,  or  any  interest 
therein,  or  income  therefrom,  transferred  by  deed, 
grant,  sale  or  gift  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the 
grantor  or  bargainer,  to  any  person  or  persons,  or 
to  a  body  politic  or  corporate,  in  trust  or  otherwise, 
or  by  reason  whereof  any  person,  or  body  politic  or 
corporate  shall  become  beneficially  entitled,  in  pos- 
session or  expectancy,  to  any  property,  or  to  the 
income  thereof,  other  than  to  or  for  the  use  of  father, 
mother,  husband,  wife,  children,  brother  and  sister 


LAWS  OP  1885,  CHAP.  483  405 

and  lineal  descendants  born  in  lawful  wedlock,  and 
the  wife  or  widow  of  a  son  and  the  husband  of  a 
daughter,  and  the  societies,  corporations  and  institu- 
tions now  exempted  by  law  from  taxation,  shall  be 
and  is  subject  to  a  tax  of  five  dollars  on  every  hun- 
dred dollars  of  the  clear  market  value  of  such  prop- 
erty, and  at  and  after  the  same  rate  for  any  less 
amount,  to  be  paid  to  the  treasurer  of  the  proper 
county,  and  in  the  city  and  county  of  New  York 
to  the  comptroller  thereof,  for  the  use  of  the  state, 
and  all  administrators,  executors  and  trustees  shall 
be  liable  for  any  and  all  such  taxes  until  the  same 
shall  have  been  paid,  as  hereinafter  directed;  pro- 
vided that  an  estate  which  may  be  valued  at  a  less 
sum  than  five  hundred  dollars  shall  not  be  subject 
to  said  duty  or  tax. 

§  2.  When  any  person  shall  bequeath  or  devise  proviso  as 
any  property,  or  interest  therein,  or  income  there-  of 
from,  to  a  father,  mother,  husband,  wife,  children, 
brother  and  sister,  the  widow  of  a  son,  or  a  lineal  p°alSedp~ 
descendant,  during  life  or  for  a  term  of  years,  and  LTe™eaiter 
the  remainder  to  a  collateral  heir  of  the  decedent,  decedent. 
or  to  a  stranger  in  blood,  or  to  a  body  politic  or 
corporate  at  their  decease,  or  on  the  expiration  of 
such  term,  the  property  so  passing  shall  be  ap- 
praised immediately  after  the  death  of  the  decedent, 
at  what  was  the  fair  market  value  thereof  at  the 
time  of  the  death  of  the  decedent,  in  the  manner 
hereinafter   provided,   and  after   deducting  there- 
from the  value  of  said  life  estate,  or  term  of  years,  Tax  im- 
the  tax  prescribed  by  this  act  on  the  remainder  shall  ^f^y 
be  immediately  due  and  payable  to  the  treasurer  payable- 
of  the  proper  county,  and  in  the  city  and  county 
of  New  York  to  the  comptroller  thereof,  and,  to- 
gether with  the  interest  thereon,  shall  be  and  re- 
main a  lien  on  said  property  until  the  same  is  paid; 
provided  that  the  person  or  persons,  or  body  politic 
or  corporate  beneficially  interested  in  the  property  proviso  aa 
chargeable  with  said  tax  may  elect  not  to  pay  the  boS^nci 
same  until  they  shall  come  into  the  actual  posses- 
sion  or  enjoyment  of  such  property,  or,  and  in  that 
case,  such  person  or  persons,  or  body  politic  or  cor- 


406 


PRIOR   STATUTES 


Ibid,  aa  to 

verified 

return. 


Excess 
over  com- 
missions 
or  reason- 
able com- 
pensation 
given  to 
executor 
liable  to 
tax. 


Tax  due 
and  pay- 
able at 
death  of 
decedent, 
etc. 


porate,  shall  give  a  bond  to  the  people  of  the  state 
of  New  York  in  a  penalty  three  times  the  amount 
of  the  tax  arising  upon  personal  estate,  with  such 
sureties  as  the  said  surrogate  may  approve,  condi- 
tioned for  the  payment  of  said  tax  and  interest 
thereon,  at  such  time  or  period  as  they  or  their 
representatives  may  come  into  the  actual  possession 
or  enjoyment  of  such  property,  which  bond  shall 
be  filed  in  the  office  of  the  surrogate  of  the  proper 
county;  provided,  further,  that  such  person  shall 
make  a  full  verified  return  of  such  property  to  said 
surrogate,  and  file  the  same  in  his  office  within  one 
year  from  the  death  of  the  decedent  and  within  that 
period  enter  into  such  security  and  renew  the  same 
every  five  years. 

§  3.  Whenever  a  decedent  appoints  or  names 
one  or  more  executors  or  trustees  and  makes  a  be- 
quest or  devise  of  property  to  them  in  lieu  of  their 
commissions  or  allowances  which  otherwise  would 
be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequest,  devises  or  residuary 
legacies  exceed  what  would  be  a  reasonable  com- 
pensation for  their  services,  such  excess  shall  be 
liable  to  said  tax,  and  the  surrogate's  court  having 
jurisdiction  in  the  case  shall  fix  such  compensa- 
tion. 

§  4.  All  taxes  imposed  by  this  act,  unless  other- 
wise herein  provided  for,  shall  be  due  and  payable 
at  the  death  of  the  decedent,  and  if  the  same  are 
paid  within  one  year,  interest  at  the  rate  of  six  per 
cent  per  annum  shall  be  charged  and  collected 
thereon,  but  if  not  so  paid  interest  at  the  rate  of 
ten  per  cent  per  annum  shall  be  charged  and  col- 
lected from  the  tune  said  tax  accrued;  provided,  that 
if  said  tax  is  paid  within  six  months  from  the  ac- 
cruing thereof,  interest  shall  not  be  charged  or  col- 
lected thereon,  but  a  discount  of  five  per  cent  shall 
be  allowed  and  deducted  from  said  tax,  and  in  all 
cases  where  the  executors,  administrators  or  trus- 
tees do  not  pay  such  tax  within  one  year  from  the 
death  of  the  decedent,  they  shall  be  required  to  give 
a  bond  in  the  form  and  to  the  effect  prescribed  in 


LAWS   OF    1885,   CHAP.    483  407 

section  two  of  this  act  for  the  payment  of  said  tax, 
together  with  interest. 

§  5.  The  penalty  of  ten  per  cent  per  annum,  im-  Penalty 
posed  by  section  four  hereof  for  the  non-payment  payment 
of  said  tax,  shall  not  be  charged  where  in  cases  by  chargeable 
reason  of  claims  made  upon  the  estate,  necessary  tate  can- 
litigation  or  other  unavoidable  cause  of  delay,  the  tied, 
estate  of  any  decedent,  or  a  part  thereof,  cannot 
be  settled  at  the  end  of  a  year  from  the  death  of  the 
decedent,  and  in  such  cases  only  six  per  cent  per 
annum  shall  be  charged  upon  the  said  tax  from  the 
expiration  of  such  year  until  the  cause  of  such  delay 
is  removed. 

§  6.  Any  administrator,  executor  or  trustee  hav-  Adminis- 
ing  in  charge  or  trust  any  legacy  or  property  for  executor 
distribution  subject  to  the  said  tax  shall  deduct  the  tax.6 
tax  therefrom,  or  if  the  legacy  or  property  be  not 
money,  he  shall  collect  the  tax  thereon  upon  the 
appraised  value  thereof  from  the  legatee  or  person 
entitled  to  such  property,  and  he  shall  not  deliver 
or  be  compelled  to  deliver  any  specific  legacy  or 
property  subject  to  tax  to  any  person,  until  he  shall 
have  collected  the  tax  thereon;  and  whenever  any 
such  legacy  shall  be  charged  upon  or  payable  out  of 
real  estate,  the  heir  or  devisee,  before  paying  the 
same,  shall  deduct  said  tax  therefrom,  and  pay  the 
same  to  the  executor,  administrator  or  trustee,  and 
the  same  shall  remain  a  charge  on  such  real  estate 
until  paid,  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the 
same  manner  that  the  payment  of  such  legacy  might 
be  enforced;  if,  however,  such  legacy  be  given  in 
money  to  any  person  for  a  limited  period,  he  shall 
retain  the  tax  upon  the  whole  amount,  but  if  it 
be  not  in  money,  he  shall  make  application  to  the 
court  having  jurisdiction  of  his  accounts,  to  make 
an  apportionment,  if  the  case  require  it,  of  the  sum 
to  be  paid  into  his  hands  by  such  legatees,  and  for 
such  further  order  relative  thereto  as  the  case  may 
require. 

§  7.  All  executors,   administrators  and  trustees 
shall  have  full  power  to  sell  so  much  of  the  property 


408 


PRIOR   STATUTES 


Payment 
of  tax  to 
be  made 
to  county 
treasurer, 
etc. 


Executors, 
etc.,  to 
give   notice 
to    treasurer 
or  comp- 
troller of 
county. 


of  the  decedent  as  will  enable  them  to  pay  said 
tax,  in  the  same  manner  as  they  may  be  enabled  by 
law  to  do  for  the  payment  of  debts  of  their  testators 
and  intestates,  and  the  amount  of  said  tax  shall  be 
paid  as  hereinafter  directed. 

§  8.  Every  sum  of  money  retained  by  any  execu- 
tor, administrator  or  trustee,  or  paid  into  his  hands 
for  any  tax  on  any  property,  shall  be  paid  by  him, 
within  thirty  days  thereafter,  to  the  treasurer  of 
the  proper  county,  or  in  the  city  and  county  of  New 
York,  to  the  comptroller  thereof,  and  the  said  treas- 
urer or  comptroller  shall  give,  and  every  executor, 
administrator  or  trustee  shall  take,  duplicate  re- 
ceipts from  him  of  such  payment,  one  of  which  re- 
ceipts he  shall  immediately  send  to  the  comptroller 
of  the  state,  whose  duty  it  shall  be  to  charge  the 
treasurer  or  comptroller  so  receiving  the  tax  with 
the  amount  thereof,  and  shall  seal  said  receipt  with 
the  seal  of  his  office,  and  countersign  the  same  and 
return  it  to  the  executor,  administrator  or  trustee, 
whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment of  his  accounts;  but  an  executor,  administrator 
or  trustee  shall  not  be  entitled  to  credit  in  his  ac- 
counts nor  be  discharged  from  liability  for  such  tax 
unless  he  shall  produce  a  receipt  so  sealed  and  coun- 
tersigned by  the  comptroller,  or  a  copy  thereof 
certified  by  him. 

§  9.  Whenever  any  of  the  real  estate  of  which 
any  decedent  may  die  seized  shall  pass  to  any  body 
politic  or  corporate,  or  to  any  person  or  persons, 
other  than  the  father,  mother,  husband,  wife,  lawful 
issue,  wife  or  widow  of  a  son,  or  husband  of  a  daugh- 
ter, or  in  trust  for  them,  or  some  of  them,  it  shall  be 
the  duty  of  the  executors,  administrators  or  trustees 
of  such  decedent  to  give  information  thereof  in 
writing  to  the  treasurer  or  comptroller  of  the  county 
where  such  real  estate  is  situate,  within  six  months 
after  they  undertake  the  execution  of  their  respec- 
tive duties,  or,  if  the  fact  be  not  known  to  them 
within  that  period,  then  within  one  month  after 
the  same  shall  have  come  to  their  knowledge. 

§  10.  Whenever  any  debts  shall  be  proven  against 


LAWS   OF    1885,    CHAP.    483  409 


the  estate  of  a  decedent,  after  the  payment  of  legacies 
or  distribution  of  property,  from  which  the  said 
tax  has  been  deducted,  or  upon  which  it  has  been 
paid,  and  a  refund  is  made  by  the  legatee,  devisee, 
heir  or  next  of  kin,  a  proportion  of  the  tax  so  paid 
shall  be  repaid  to  him  by  the  executor,  administrator 
or  trustee,  if  the  said  tax  has  not  been  paid  to  the 
county  treasurer,  comptroller,  or  to  the  state  treas- 
urer, or  by  them  if  it  has  been  so  paid. 

§  11.  Whenever  any  foreign  executor  or  adminis- 
trator  shall  assign  or  transfer  any  stocks  or  loans  3™  of 
in  this  state,  standing  hi  the  name  of  a  decedent, 
or  in  trust  for  a  decedent,  which  shall  be  liable  to 
the  said  tax,  such  tax  shall  be  paid  to  the  treasurer 
or  comptroller  of  the  proper  county  on  the  transfer 
thereof,  otherwise  the  corporation  permitting  such 
transfer  shall  become  liable  to  pay  such  tax,  pro- 
vided that  such  corporation  has  knowledge  before 
such  transfer  that  said  stocks  or  loans  are  liable  to 
said  tax. 

§  12.  When  any  amount  of  said  tax  shall  have 
been  paid  erroneously  to  the  state  treasurer,  it  shall 
be  lawful  for  him,  on  satisfactory  proof  rendered 
to  the  comptroller  by  said  county  treasurer  or  comp- 
troller of  such  erroneous  payment,  to  refund  and 
pay  to  the  executor,  administrator,  person  or  per- 
sons who  have  paid  any  such  tax  in  error,  the  amount 
of  such  tax  so  paid,  provided  that  all  such  applica- 
tions for  the  repayment  of  such  tax  shall  be  made 
within  two  years  from  the  date  of  such  payment. 

§  13.  In  order  to  fix  the  value  of  property  of  per- 
sons  whose  estates  shall  be  subject  to  the  payment 
of  said  tax,  the  surrogate,  on  the  application  of  any 
interested  party,  or  upon  his  own  motion  shall  ap- 
point  some  competent  person  as  appraiser  as  often 
as,  and  whenever  occasion  may  require,  whose  duty 
it  shall  be  forthwith  to  give  such  notice  by  mail, 
and  to  such  persons  as  the  surrogate  may  by  order 
direct,  of  the  tune  and  place  he  will  appraise  such 
property;  and  at  such  time  and  place  to  appraise 
the  same  at  its  fair  market  value,  and  make  a  report 
thereof  hi  writing  to  said  surrogate,  together  with 


410 


PRIOR   STATUTES 


Appraiser 
taking  fee 
or  reward 
from  per- 
son liable 
to  pay  tax 
guilty  of  a 
misde- 
meanor. 


Jurisdiction 
of  surro- 
gate's court. 


such  other  facts  in  relation  thereto  as  said  surrogate 
may  by  order  require,  to  be  filed  in  the  office  of  such 
surrogate;  and  from  this  report  the  said  surrogate 
shall  forthwith  assess  and  fix  the  then  cash  value 
of  all  estates,  annuities  and  life  estates,  or  term  of 
years  growing  out  of  said  estate,  and  the  tax  to 
which  the  same  is  liable,  and  shall  immediately  give 
notice  thereof  by  mail  to  all  parties  known  to  be 
interested  therein.  Any  person  or  persons  dissatis- 
fied with  said  appraisement  or  assessment  may 
appeal  therefrom  to  the  surrogate  of  the  proper 
county  within  sixty  days  after  the  making  and  filing 
of  such  assessment,  on  paying,  or  giving  security 
approved  by  the  surrogate  to  pay  all  costs,  together 
with  whatever  tax  shall  be  fixed  by  said  court.  The 
said  appraiser  shall  be  paid  by  the  county  treasurer 
or  comptroller  out  of  any  funds  he  may  have  in  his 
hands  on  account  of  said  tax,  on  the  certificate  of 
the  surrogate,  at  the  rate  of  three  dollars  per  day 
for  every  day  actually  and  necessarily  employed  in 
said  appraisement,  together  with  his  actual  and 
necessary  traveling  expenses. 

§  14.  Any  appraiser  appointed  by  virtue  of  this 
act  who  shall  take  any  fee  or  reward  from  any  execu- 
tor, administrator,  trustee,  legatee,  next  of  kin  or 
heir  of  any  decedent,  or  from  any  other  person  liable 
to  pay  said  tax  or  any  portion  thereof,  shall  be  guilty 
of  a  misdemeanor,  and  upon  conviction  in  any  court 
having  jurisdiction  of  misdemeanors  he  shall  be 
fined  not  less  than  two  hundred  and  fifty  dollars  nor 
more  than  five  hundred  dollars,  and  imprisoned 
not  exceeding  ninety  days;  and  in  addition  thereto 
the  surrogate  shall  dismiss  him  from  such  service. 

§  15.  The  surrogate's  court  in  the  county  in 
which  the  real  property  is  situate  of  a  decedent 
who  was  not  a  resident  of  the  state,  or  in  the  county 
of  which  the  decedent  was  a  resident  at  the  time  of 
his  death,  shall  have  jurisdiction  to  hear  and  deter- 
mine all  questions  in  relation  to  the  tax  arising  under 
the  provisions  of  this  act,  and  the  surrogate  first 
acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other. 


LAWS  OF   1885,    CHAP.   483  411 

§  16.  If  it  shall  appear  to  the  surrogate's  court  ^SwSe  if 
that  any  tax  accruing  under  this  act  has  not  been  ***b^n 
paid  according  to  law,  it  shall  issue  a  citation  citing  j^^0' 
the  persons  interested  in  the  property  liable  to  the  thereon-  etc. 
tax  to  appear  before  the  court  on  a  day  certain, 
not  more  than  three  months  after  the  date  of  such 
citation,  and  show  cause  why  said  tax  should  not  be 
paid.  The  service  of  such  citation  and  the  time, 
manner  and  proof  thereof  and  fees  therefor,  and 
the  hearing  and  determination  thereon,  and  the 
enforcement  of  the  determination  or  decree  shall 
conform  to  the  provisions  of  the  Code  of  Civil  Pro- 
cedure for  the  service  of  citations  now  issuing  out  of 
surrogates'  courts,  and  the  hearing  and  determina- 
tion thereon  and  its  enforcement.  And  the  surro- 
gate or  clerk  of  the  surrogate's  court  shall,  upon  the 
request  of  the  district  attorney,  treasurer  of  the 
county  or  comptroller  of  the  county  of  New  York, 
furnish,  without  fee,  one  or  more  transcripts  of  such 
decree,  as  provided  in  section  twenty-five  hundred 
and  fifty-three  of  the  Code  of  Civil  Procedure,  and 
the  same  shall  be  docketed  and  filed  by  the  county 
clerk  of  any  county  in  the  state  without  fee  in  the 
same  manner  and  with  the  same  effect  as  provided 
by  said  section  for  filing  and  docketing  transcripts 
of  decrees  of  such  courts. 

§  17.  Whenever  the  treasurer  or  comptroller  of 
any  county  shall  have  reason  to  believe  that  any 
tax  is  due  and  unpaid  under  this  act,  after  the  re- 
f usal  or  neglect  of  the  persons  interested  in  the  prop- 
erty  liable  to  said  tax  to  pay  the  same,  he  shall 
notify  the  district  attorney  of  the  proper  county, 
in  writing,  of  such  failure  to  pay  such  tax,  and  the 
district  attorney  so  notified,  if  he  have  probable 
cause  to  believe  a  tax  is  due  and  unpaid,  shall  pros- 
ecute the  proceeding  in  the  surrogate's  court  in 
the  proper  county,  as  provided  in  section  sixteen 
of  this  act,  for  the  enforcement  and  collection  of 
such  tax.  All  costs  awarded  by  such  decree  that 
may  be  collected  after  the  collection  and  payment 
of  the  tax  to  the  treasurer  or  comptroller  of  the 
proper  county  may  be  retained  by  the  district  at- 


412 


PRIOR   STATUTES 


Quarter- 
yearly 
statement 
to  be  made 
by  county 
clerk  and 
surrogate. 


Allowance 
to  county 
treasurer 
or  comp- 
troller of 
expenses. 


Book  to  be 
furnished  by 
state    comp- 
troller and 
returns 
made  by 
appraisers 
to  DC  entered. 


Taxes  to  be 
paid  to 
state  treas- 
urer and 
report  made 
to  state 
comptroller. 


County 
treasurers 
and  city 
comptroller 
may  retain 
five  per  cent 
for  services. 


torney  hereafter  elected  or  appointed  for  his  own 
use. 

§  18.  The  surrogate  and  county  clerk  of  each 
county  shall,  every  three  months,  make  a  state- 
ment in  writing  to  the  county  treasurer  or  comp- 
troller of  his  county  of  the  property  from  which  or 
the  party  from  whom  he  has  reason  to  believe  a  tax 
under  this  act  is  due  and  unpaid. 

§  19.  Whenever  the  surrogate  of  any  county  shall 
certify  that  there  was  probable  cause  for  issuing  a 
citation  and  taking  the  proceedings  specified  in  sec- 
tion sixteen  of  this  act,  the  state  treasurer  shall  pay 
or  allow  to  the  treasurer  or  comptroller  of  any 
county  all  expenses  incurred  for  services  of  citation 
and  his  other  lawful  disbursements  that  have  not 
otherwise  been  paid. 

§  20.  The  comptroller  of  the  state  shall  furnish 
to  each  surrogate  a  book  hi  which  he  shall  enter 
the  returns  made  by  appraisers,  the  cash  value  of 
annuities,  life  estates  and  terms  of  years  and  other 
property  fixed  by  him,  and  the  tax  assessed  thereon 
and  the  amounts  of  any  receipts  for  payments 
thereon  filed  with  him,  which  books  shall  be  kept 
in  the  office  of  the  surrogate  as  a  public  record. 

§  21.  The  treasurer  of  each  county  and  the  comp- 
troller of  the  county  of  New  York  shall  collect  and 
pay  the  state  treasurer  all  taxes  that  may  be  due 
and  payable  under  this  act  who  shall  give  him  a 
receipt  therefor,  of  which  collection  and  payment 
he  shall  make  a  report  under  oath  to  the  comptroller 
on  the  first  Monday  in  March  and  September  of 
each  year,  stating  for  what  estate  paid,  and  in  such 
form  and  containing  such  particulars  as  the  comp- 
troller may  prescribe;  and  for  all  such  taxes  collected 
by  him  and  not  paid  to  the  state  treasurer  by  the 
first  day  of  October  and  April  of  each  year,  he  shall 
pay  interest  at  the  rate  of  ten  per  cent  per  annum. 

§  22.  The  treasurer  of  each  county  and  the  comp- 
troller of  the  county  of  New  York  hereafter  elected 
or  appointed  shall  be  allowed  to  retain  five  per  cent 
on  all  taxes  paid  and  accounted  for  by  him  under 
this  act  in  full  for  his  services  in  collecting  and  pay- 


LAWS   OF    1887,   CHAP.   713  413 

ing  the  same,  in  addition  to  his  salary  or  fees  now 
allowed  by  law. 

§  23.  Any  person,  or  body  politic  or  corporate,  ^f^n*0 
shall,  upon  payment  of  the  sum  of  fifty  cents,  be  °P 
entitled  to  a  receipt  from  the  county  treasurer  of  fee- 
any  county  or  comptroller  of  the  county  of  New 
York,  or  a  copy  of  the  receipt  at  his  option,  that  may 
have  been  given  by  said  treasurer  or  comptroller, 
for  the  payment  of  any  tax  under  this  act,  to  be 
sealed  with  the  seal  of  his  office,  which  receipt  shall 
designate  on  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  said  tax  has 
been  paid,  and  by  whom  paid,  and  whether  or  not 
it  is  in  full  of  said  tax,  and  said  receipt  may  be  re-  co^ 
corded  in  the  clerk's  office  of  the  county  in  which  tax"  boo™, 
said  property  is  situate,  in  a  book  to  be  kept  by 
said  clerk  for  such  purpose,  which  shall  be  labeled 
"  Collateral  tax." 


Laws  of  1887,  Chap.  713,  in  effect  June  25, 1887 

AN  ACT  to  amend  chapter  four  hundred  and  eighty- 
three  of  the  laws  of  eighteen  hundred  and  eighty- 
five,  entitled  "An  act  to  tax  gifts,  legacies  and 
collateral  inheritances  in  certain  cases." 

PASSED  June  25, 1887;  three-fifths  being  present. 

The  People  of  the  State  of  New  York,  represented  in 
Senate  and  Assembly,  do  enact  as  follows: 

SECTION  1.  Chapter  four  hundred  and  eighty- 
three  of  the  laws  of  eighteen  hundred  and  eighty- 
five,  entitled  "An  act  to  tax  gifts,  legacies  and  col- 
lateral inheritances  in  certain  cases,"  is  hereby 
amended  so  as  to  read  as  follows: 

§  1.  After  the  passage  of  this  act  all  property  state  tax 
which  shall  pass  by  will  or  by  the  intestate  laws  of 
this  State,  from  any  person  who  may  die  seized  or 
possessed  of  the  same  while  a  resident  of  this  State, 
or  if  such  decedent  was  not  a  resident  of  this  State 


414 


PRIOR   STATUTES 


Rate  of 
tax,  and 
to  whom 
payable. 


Estates 
under  $500 
exempt. 


Appraisal 
of  prop- 
frty,  after 
death  of 
decedent, 
in  certain 
cases. 


at  the  time  of  death,  which  property,  or  any  part 
thereof,  shall  be  within  this  State,  or  any  interest 
therein,  or  income  therefrom  which  shall  be  trans- 
ferred by  deed,  grant,  sale  or  gift,  made  or  intended 
to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor  or  bargainer,  to  any  person 
or  persons,  or  to  any  body  politic  or  corporate,  in 
trust  or  otherwise,  or  by  reason  whereof  any  person 
or  body  politic  or  corporate  shall  become  beneficially 
entitled  in  possession  or  expectancy,  to  any  property 
or  to  the  income  thereof,  other  than  to  or  for  the 
use  of  his  or  her  father,  mother,  husband,  wife,  child, 
brother,  sister,  the  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  or  any  child  or  children 
adopted  as  such  in  conformity  with  the  laws  of  the 
State  of  New  York,  or  any  person  to  whom  the 
deceased  for  not  less  than  ten  years  prior  to  his  or 
her  death  stood  in  the  mutually  acknowledged  rela- 
tion of  a  parent,  and  any  lineal  descendant  of  such 
decedent  born  in  lawful  wedlock,  or  the  societies, 
corporations  and  institutions  now  exempted  by  law 
from  taxation  by  reason  whereof  any  such  person 
or  corporation  shall  become  beneficially  entitled, 
in  possession  or  expectancy,  to  any  such  property 
or  to  the  income  thereof,  shall  be  and  is  subject  to 
a  tax  of  five  dollars  on  every  hundred  dollars  of  the 
clear  market  value  of  such  property,  and  at  and 
after  the  same  rate  for  any  less  amount,  to  be  paid 
to  the  treasurer  of  the  proper  county,  and  in  the 
city  and  county  of  New  York  to  the  comptroller 
thereof,  for  the  use  of  the  State,  and  all  adminis- 
trators, executors  and  trustees  shall  be  liable  for 
any  and  all  such  taxes  until  the  same  shall  have 
been  paid  as  hereinafter  directed,  provided  that  an 
estate  which  may  be  valued  at  a  less  sum  than  five 
hundred  dollars  shall  not  be  subject  to  such  duty  or 
tax. 

§  2.  When  any  grant,  gift,  legacy  or  succession 
upon  which  a  tax  is  imposed  by  section  first  of  this 
act,  shall  be  an  estate,  income  or  interest  for  a  term 
of  years  or  for  life,  or  determinable  upon  any  future 
or  contingent  event,  or  shall  be  a  remainder,  rever- 


LAWS   OF   1887,   CHAP.   713  415 

sion  or  other  expectancy,  real  or  personal,  the  en-< 
tire  property  or  fund  by  which  such  estate,  income 
or  interest  is  supported,  or  of  which  it  is  a  part, 
shall  be  appraised  immediately  after  the  death  of 
the  decedent,  at  what  was  the  fair  and  clear  market 
value  thereof  at  the  time  of  the  death  of  the  de- 
cedent, in  the  manner  hereinafter  provided,  and  the 
surrogate  shall  thereupon  assess  and  determine  the  Duty  of 
value  of  the  estate,  income  or  interest  subject  to  said  as'fc^vahi- 
tax,  in  the  manner  recorded  in  section  thirteen  of  this 
act,  and  the  tax  prescribed  by  this  act  shall  be  im-  Tax  to  be 

immedi- 

mediately  due  and  payable  to  the  treasurer  of  the  ateiypay- 

.    .         ,          .  ,  able  thereon. 

proper  county,  and  in  the  city  or  county  of  New 
York  to  the  comptroller  thereof,  and,  together  with 
the  interest  thereon,  shall  be  and  remain  a  lien  on 
said  property  until  the  same  is  paid;  provided  that  ^.ecrsoibene_ 
the  person  or  persons,  or  body  politic  or  corporate  {jfkiiyui- 
beneficially  interested  in  the  property  chargeable  gj,1^  tfjj£_ 
with  said  tax,  may  elect  not  to  pay  the  same  until  for>  etc- 
they  shall  come  into  the  actual  possession  or  enjoy- 
ment of  such  property,  and  in  that  case  such  person 
or  persons  or  body  politic  or  corporate,  shall  give  a 
bond,  to  the  people  of  the  State  of  New  York  in  a 
penalty  of  three  times  the  amount  of  the  tax  arising 
upon  personal  estate,  with  such  sureties  as  the  surro- 
gate of  the  proper  county  may  approve  conditioned 
for  the  payment  of  said  tax  and  interest  thereon  at 
such  time  or  period  as  they  or  their  representatives 
may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  which  bond  shall  be  filed  in  the 
office  of  the  surrogate  of  the  proper  county;  provided  verified 
further,  that  such  person  shall  make  a  full  verified 
return  of  such  property  to  said  surrogate,  and  file 
the  same  in  his  office  within  one  year  from  the  death 
of  the  decedent,  and  within  that  period  enter  into 
such  security  and  renew  the  same  every  five  years. 
§  3.  Whenever  a  decedent  appoints  or  names  one  r 

Executors 

or  more  executors  or  trustees  and  makes  a  bequest  «r  trustees, 

.  .  commissions 

or  devise  of  property  to  them  in  lieu  of  their  com-  of.  when 

liable  to  tax. 

missions  or  allowances,  which  otherwise  would  be 
liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequest,  devises  or  residuary  leg- 


416 


PRIOR   STATUTES 


Taxes,  when 
due  and 
payable. 


Interest 
thereon. 


Penalty  for 
non-payment 
of  tax. 


When  and 
how  charge- 
able. 


Deductions 
of  tax  from 
legacies,  by 
trustees,  etc. 


acies  exceed  what  would  be  a  reasonable  compensa- 
tion for  their  services,  such  excess  shall  be  liable  to 
said  tax,  and  the  surrogate's  court  having  jurisdic- 
tion in  the  case  shall  fix  such  compensation. 

§  4.  All  taxes  imposed  by  this  act  unless  other- 
wise herein  provided  for,  shall  be  due  and  payable 
at  the  death  of  the  decedent,  and  if  the  same  are 
paid  within  eighteen  months,  no  interest  shall  be 
charged  and  collected  thereon,  but  if  not  so  paid, 
interest  at  the  rate  of  ten  per  cent,  per  annum  shall 
be  charged  and  collected  from  the  time  said  tax  ac- 
crued; provided,  that  if  said  tax  is  paid  within  six 
months  from  the  accruing  thereof,  a  discount  of 
five  per  cent  shall  be  allowed  and  deducted  from 
said  tax,  and  in  all  cases  where  the  executors,  ad- 
ministrators or  trustees  do  not  pay  such  tax  within 
eighteen  months  from  the  death  of  the  decedent, 
they  shall  be  required  to  give  a  bond  in  the  form 
and  to  the  effect  prescribed  in  section  two  of  this 
act  for  the  payment  of  said  tax,  together  with  in- 
terest. 

§  5.  The  penalty  of  ten  per  cent  per  annum  im- 
posed by  section  four  hereof,  for  the  non-payment 
of  said  tax,  shall  not  be  charged  where  in  cases  by 
reason  of  claims  made  upon  the  estate,  necessary 
litigation  or  other  unavoidable  cause  of  delay,  the 
estate  of  any  decedent,  or  a  part  thereof,  cannot  be 
settled  at  the  end  of  eighteen  months  from  the  death 
of  the  decedent,  and  in  such  cases  only  six  per  cent 
per  annum  shall  be  charged  upon  the  said  tax,  from 
the  expiration  of  said  eighteen  months  until  the 
cause  of  such  delay  is  removed. 

§  6.  Any  administrator,  executor  or  trustee  hav- 
ing in  charge,  or  trust,  any  legacy  or  property  for 
distribution,  subject  to  the  said  tax,  shall  deduct 
the  tax  therefrom,  or  if  the  legacy  or  property  be 
not  money,  he  shall  collect  the  tax  thereon  upon 
the  appraised  value  thereof  from  the  legatee  or  per- 
son entitled  to  such  property,  and  he  shall  not  de- 
liver, or  be  compelled  to  deliver,  any  specific  legacy 
or  property  subject  to  tax  to  any  person  until  he 
shall  have  collected  the  tax  thereon;  and  whenever 


LAWS   OF    1887,   CHAP.    713  417 


any  such  legacy  shall  be  charged  upon  or  payable 
out  of  real  estate,  the  heir  or  devisee  before  paying 

r    J        *    is  not  in 

the  same,  shall  deduct  said  tax  therefrom,  and  pay  money. 
the  same  to  the  executor,  administrator  or  trustee, 
and  the  same  shall  remain  a  charge  on  such  real 
estate  until  paid,  and  the  payment  thereof  shall  be 
enforced  by  the  executor,  administrator  or  trustee  Tax  how 
in  the  same  manner  that  the  payment  of  such  legacy 
might  be  enforced;  if  however,  such  legacy  be  given  other  pro- 

...  .      ,  ,  visions,    as 

m  money  to  any  person  for  a  limited  period,  he  shall  to  limited 

•  f  •  bequests, 

retain  the  tax  upon  the  whole  amount,  but  if  it  be  etc. 
not  in  money,  he  shall  make  application  to  the  court 
having  jurisdiction  of  his  accounts,  to  make  an 
apportionment,  if  the  case  require  it,  of  the  sum  to 
be  paid  into  his  hands  by  such  legatees,  and  for  such 
further  order  relative  thereto  as  the  case  may  re- 
quire. 

§  7.  All  executors,   administrators  and  trustees  Saieof 

property 

shall  have  full  power  to  sell  so  much  of  the  property  ?f  decedent, 

.  •'to  pay  tax. 

of  the  decedent  as  will  enable  them  to  pay  said  tax, 
in  the  same  manner  as  they  may  be  enabled  by  law 
to  do  for  the  payment  of  debts  of  their  testators 
and  intestates,  and  the  amount  of  said  tax  shall  be 
paid  as  hereinafter  directed. 

§  8.  Every  sum  of  money  retained  by  an  executor, 
administrator  or  trustee,  or  paid  into  his  hands,  when  to 

7    be  made 

for  any  tax  on  any  property,  shall  be  paid  by  him 


within  thirty  days  thereafter,  to  the  treasurer  of  «tc 
the  proper  county,  or  in  the  city  and  county  of  New 
York,  to  the  comptroller  thereof,  and  the  said  treas- 
urer or  comptroller  shall  give,  and  every  executor, 
administrator  or  trustee  shall  take  duplicate  re- 
ceipts from  him  of  such  payment,  one  of  which  re- 

ceipts he  shall  immediately  send  to  the  Comptroller  Transmis- 

sion of  re- 

of  the  State,  whose  duty  it  shall  be  to  charge  the 
treasurer  or  comptroller  so  receiving  the  tax,  with  Comptroller 
the  amount  thereof,  and  shall  seal  said  receipt  with 
the  seal  of  his  office,  and  countersign  the  same  and 
return  it  to  the  executor,  administrator  or  trustee,  Return  of 
whereupon  it  shall  be  a  proper  voucher  in  the  settle-  ^fnter- 
ment  of  his  accounts,  but  an  executor,  administrator  voucher? 
or  trustee  shall  be  not  entitled  to  credits  in  his  ac-  tor!etc?" 
27 


PRIOR   STATUTES 


Executor, 
etc.,  to  no- 
tify county 
t  reasurer, 
rtc.,    as    to 
passing  of 
real  estate. 


Repayment 
of  propor- 
tion of  tax 
paid,  in 
cases  of 
debts  proven 
afterward. 


Tax  upon 
transfer  of 
stocks,  by 
foreign 
oxecutor, 
etc. 


counts,  nor  be  discharged  from  liability  for  such  tax, 
unless  he  shall  produce  a  receipt  so  sealed  and  coun- 
tersigned by  the  comptroller,  or  a  copy  thereof  cer- 
tified by  him. 

§  9.  Whenever  any  of  the  real  estate  of  which  any 
decedent  may  die  seized  shall  pass  to  any  body  politic 
or  corporate,  or  to  any  person  or  persons  other  than 
his  or  her  father,  mother,  husband,  wife,  lawful 
issue,  brother,  sister,  wife  or  widow  of  a  son,  or  hus- 
band of  a  daughter,  or  child  or  children  adopted  by 
such  decedent  according  to  law,  or  any  person  to 
whom  the  deceased  for  not  less  than  ten  years  prior 
to  his  or  her  death,  stood  in  the  mutually  acknowl- 
edged relation  of  a  parent,  or  in  trust  for  them,  or 
some  of  them,  it  shall  be  the  duty  of  the  executors, 
administrators  or  trustees  of  such  decedent,  to  give 
information  thereof  in  writing  to  the  treasurer  or 
comptroller  of  the  county  where  such  real  estate  is 
situate,  within  six  months  after  they  undertake  the 
execution  of  their  respective  duties,  or  if  the  fact 
be  not  known  to  them  within  that  period,  then 
within  one  month  after  the  same  shall  have  come  to 
their  knowledge. 

§  10.  Whenever  any  debts  shall  be  proven  against 
the  estate  of  a  decedent,  after  the  payment  of  leg- 
acies or  distribution  of  property  from  which  the 
said  tax  has  been  deducted,  or  upon  which  it  has 
been. paid,  and  a  refund  is  made  by  the  legatee, 
devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax 
so  paid  shall  be  repaid  to  him  by  the  executor,  ad- 
ministrator or  trustee,  if  the  said  tax  has  not  been 
paid  to  the  county  treasurer,  comptroller,  or  to  the 
State  Treasurer,  or  by  them  if  it  has  been  so  paid. 

§  11.  Whenever  any  foreign  executor  or  adminis- 
trator shall  assign  or  transfer  any  stocks  or  loans 
in  this  State,  standing  in  the  name  of  a  decedent, 
or  in  trust  for  a  decedent,  which  shall  be  liable  to 
the  said  tax,  such  tax  shall  be  paid  to  the  treasurer 
or  comptroller  of  the  proper  county  on  the  transfer 
thereof,  otherwise  the  corporation  permitting  such 
transfer  shall  become  liable  to  pay  such  tax,  provided 
that  such  corporation  had  knowledge  before  such 


LAWS   OF   1887,   CHAP.   713  419 

transfer  that  said  stocks  or  loans  are  liable  to  said 
tax. 

§  12.  When  any  amount  of  said  tax  shall  have  Tax  erro- 
been  paid  erroneously  to  the  State  Treasurer,  it 
shall  be  lawful  for  him,  on  satisfactory  proof  ren- 
dered to  the  Comptroller  by  said  county  treasurer 
or  comptroller  of  such  erroneous  payment,  to  refund 
and  pay  to  the  executor,  administrator,  person  or 
persons  who  have  paid  any  such  tax  in  error,  the 
amount  of  such  tax  so  paid,  provided  that  all  such 
applications  for  the  payment  of  such  tax  shall  be 
made  within  five  years  from  the  date  of  such  pay- 
ment. 

§  13.  In  order  to  fix  the  value  of  property  of 
persons  whose  estates  shall  be  subject  to  the  pay-  oFc^tltn 
ment  of  said  tax,  the  surrogate,  on  the  application  estates- 
of  any  interested  party,  or  upon  his  own  motion,  shall 
appoint   some   competent  person   as   appraiser   as 
often  as,  and  whenever  occasion  may  require,  whose 
duty  it  shall  be  forthwith  to  give  such  notice  by  Duty  of 

appraiser. 

mail  to  all  persons  known  to  have  or  claim  an  interest 
in  such  property,  and  to  such  persons  as  the  surro- 
gate may  by  order  direct,  of  the  time  and  place  he 
will  appraise  such  property;  and,  at  such  time  and 
place,  to  appraise  the  same  at  its  fair  market  value, 
and  make  a  report  thereof  in  writing  to  said  surro- 

.  To  report  to 

gate,  together  with  such  other  facts  in  relation  surrogate. 
thereto  as  said  surrogate  may  by  order  require,  to 
be  filed  in  the  office  of  such  surrogate;  and  from  this 
report  the  said  surrogate  shall  forthwith  assess  and  surrogate 
fix  the  then  cash  value  of  all  estates,  annuities  and 
life  estates  or  terms  of  years  growing  out  of  said 
estate,  and  the  tax  to  which  the  same  is  liable,  and  thereon- 
shall  immediately  give  notice  thereof  by  mail  to 
all  parties  known  to  be  interested  therein,  and  the 
value  of  every  future  or  contingent  or  limited  estate, 
income  or  interest  shall,  for  the  purposes  of  this  act, 
be  determined  by  the  rule,  method  and  standards  of 
mortality  and  of  value,  which  are  employed  by  the 
superintendent  of  the  insurance  department  in  as- 
certaining the  value  of  policies  of  life  insurance  and 
annuities,  for  the  determination  of  the  liabilities  of 


420 


PRIOR   STATUTES 


Appeals 
from  ap- 
praisements. 


Compensa- 
tion of 
appraiser. 


Appraiser 
accepting 
bribe  or 
reward,  hot 
punished. 


Jurisdiction 
of  surro- 
gate's court. 


life  insurance  companies,  save  that  the  rate  of  in- 
terest to  be  assessed  in  computing  the  present  value 
of  all  future  interests  and  contingencies  shall  be  five 
per  cent  per  annum;  and  the  superintendent  of  the 
insurance  department  shall,  on  the  application  of 
any  surrogate,  determine  the  value  of  such  future  or 
contingent  or  limited  estate,  income  or  interest, 
upon  the  facts  contained  in  such  report,  and  certify 
the  same  to  the  surrogate,  and  his  certificate  shall 
be  conclusive  evidence  that  the  method  of  compu- 
tations adopted  therein  is  correct.  Any  person  or 
persons  dissatisfied  with  appraisement  or  assess- 
ment may  appeal  therefrom  to  the  surrogate  of  the 
proper  county  within  sixty  days  after  the  making 
and  filing  of  such  assessment,  on  paying  or  giving 
security  approved  by  the  surrogate  to  pay  all  costs, 
together  with  whatever  tax  shall  be  fixed  by  said 
court.  The  said  appraiser  shall  be  paid  by  the  county 
treasurer  or  comptroller  out  of  any  funds  he  may 
have  in  his  hands  on  account  of  said  tax,  on  the 
certificate  of  the  surrogate,  at  the  rate  of  three 
dollars  per  day  for  every  day  actually  and  neces- 
sarily employed  in  said  appraisement,  together  with 
his  actual  and  necessary  traveling  expenses. 

§  14.  Any  appraiser  appointed  by  virtue  of  this 
act  who  shall  take  any  fee  or  reward  from  any  execu- 
tor, administrator,  trustee,  legatee,  next  of  kin  or 
heir  of  any  decedent,  or  from  any  other  person  liable 
to  pay  said  tax,  or  any  portion  thereof,  shall  be 
guilty  of  a  misdemeanor,  and  upon  conviction  in 
any  court  having  jurisdiction  of  misdemeanors,  he 
shall  be  fined  not  less  than  two  hundred  and  fifty 
dollars  nor  more  than  five  hundred  dollars,  and  im- 
prisoned not  exceeding  ninety  days,  and  in  addition 
thereto  the  surrogate  shall  dismiss  him  from  such 
service. 

§  15.  The  surrogate's  court  in  the  county  in 
which  the  real  property  is  situate  of  a  decedent  who 
was  not  a  resident  of  the  State,  or  in  the  county  of 
which  the  decedent  was  a  resident  at  the  time  of 
his  death,  shall  have  jurisdiction  to  hear  and  deter- 
mine all  questions  in  relation  to  the  tax  arising  under 


LAWS  OF   1887,   CHAP.   713  421 

the  provisions  of  this  act,  and  the  surrogate  first 
acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other. 

§  16.  If  it  shall  appear  to  the  surrogate's  court  Citation 

.  r  to  issue,  to 

that  any  tax  accruing  under  this  act  has  not  been  p«r»°ns 

.  .          table  for 

paid  according  to  law,  it  shall  issue  a  citation,  citing  tax,  if  re- 
the  persons  interested  in  the  property  liable  to  the  unpaid, 
tax  to  appear  before  the  court  on  a  day  certain, 
not  more  than  three  months  after  the  date  of  such 
citation,  and  show  cause  why  said  tax  should  not 
be  paid.    The  service  of  such  citation  and  the  time, 
manner  and  proof  thereof,  and  fees  therefor,  and 
the  hearing  and  determination  thereon,   and  the 
enforcement  of  the  determination  or  decree  shall 
conform  to  the  provisions  of  the  Code  of  Civil  Pro-  proceedings 
cedure,  for  the  service  of  citations  now  issuing  out  of  thereuP°n- 
surrogates'  courts,  and  the  hearing  and  determina- 
tion thereon  and  its  enforcement.    And  the  surrogate,  Decree,  how 
or  clerk  of  the  surrogate's  court,  shall,  upon  the  fifed.6 
request  of  the  district-attorney,   treasurer  of  the 
county,  or  comptroller  of  the  county  of  New  York, 
furnish,  without  fee,  one  or  more  transcripts  of  such  Tran8cript8 
decree  as  provided  hi  section  twenty-five  hundred  ^en°fo  be 
and  fifty-three  of  the  Code  of  Civil  Procedure,  and  furnished, 
the  same  shall  be  docketed  and  filed  by  the  county 
clerk  of  any  county  in  the  State  without  fee,  in 
the  same  manner,  and  with  the  same  effect  as  pro- 
vided by  said  section  for  filing  and  docketing  tran- 
scripts of  decrees  of  such  courts. 

§  17.  Whenever  the  treasurer  or  comptroller  of 
any  county  shall  have  reason  to  believe  that  any 
tax  is  due  and  unpaid  under  this  act,  after  the  refusal 
or  neglect  of  the  persons  interested  hi  the  property  P*^  tax- 
liable  to  said  tax,  to  pay  the  same,  he  shall  notify 
the  district  attorney  of  the  proper  county,  in  writing, 
of  such  failure  to  pay  such  tax,  and  the  district  at- 
torney so  notified,  if  he  have  probable  cause  to  be-  Duty  Of 
lieve  a  tax  is  due  and  unpaid,  shall  prosecute  the  attorney, 
proceeding  in  the  surrogate's  court  in  the  proper 
county,  as  provided  in  section  sixteen  of  this  act 
for  the  enforcement  and  collection  of  such  tax.    All 
costs  awarded  by  such  decree,  that  may  be  collected  His  costa. 


422 


PRIOR   STATUTES 


Quarterly 
statements, 
of  surrogate 
and  county 
clerk. 


Payment 
of  certain 
expenses 
of  county 
treasurer, 
etc. 


Surrogate's 
record,  what 
to  contain. 


Payments 
of  tax  to 
State 
treasurer. 


Reports 
thereon  to 
Comptroller. 


Interest 
upon  un- 
paid amounts. 


after  the  collection  and  payment  of  the  tax,  to  the 
treasurer  or  comptroller  of  the  proper  county,  may 
be  retained  by  the  district  attorney,  hereafter  elected 
or  appointed,  for  his  own  use. 

§  18.  The  surrogate  and  county  clerk  of  each 
county  shall,  every  three  months,  make  a  statement 
in  writing  to  the  county  treasurer  or  comptroller  of 
his  county  of  the  property  from  which,  or  the  party 
from  which,  he  has  reason  to  believe  a  tax  under 
this  act  is  due  and  unpaid. 

§  19.  Whenever  the  surrogate  of  any  county  shall 
certify  that  there  was  probable  cause  for  issuing  a 
citation  and  taking  the  proceedings  specified  in  sec- 
tion seventeen  of  this  act,  the  State  Treasurer  shall 
pay  or  allow  to  the  treasurer  or  comptroller  of  any 
county  all  expenses  incurred  for  services  of  citation 
and  his  other  lawful  disbursements  that  have  not 
otherwise  been  paid. 

§  20.  The  Comptroller  of  the  State  shall  furnish 
to  each  surrogate  a  book  in  which  he  shall  enter  the 
returns  made  by  appraisers,  the  cash  value  of  an- 
nuities, life  estates  and  terms  of  years  and  other 
property  fixed  by  him,  and  the  tax  assessed  thereon, 
and  the  amounts  of  any  receipts  for  payments 
thereon  filed  with  him,  which  books  shall  be  kept 
in  the  office  of  the  surrogate  as  a  public  record. 

§  21.  The  treasurer  of  each  county  and  the  comp- 
troller of  the  county  of  New  York  shall  collect  and 
pay  the  State  Treasurer  all  taxes  that  may  be  due 
and  payable  under  this  act,  who  shall  give  him  a 
receipt  therefor,  of  which  collection  and  payment 
he  shall  make  a  report  under  oath  to  the  Comp- 
troller on  the  first  Monday  in  March  and  September 
of  each  year,  stating  for  what  estate  paid,  and  in 
such  form  and  containing  such  particulars  as  the 
Comptroller  may  prescribe;  and  for  all  such  taxes 
collected  by  him  and  not  paid  to  the  State  Treasurer 
by  the  first  day  of  October  and  April  of  each  year 
he  shall  pay  interest  at  the  rate  of  ten  per  cent  per 
annum. 

§  22.  The  treasurer  of  each  county  and  the  comp- 
troller of  the  city  and  county  of  New  York,  shall  be 


LAWS   OF   1889,    CHAP.    479  423 

allowed  to  retain,  on  all  taxes  paid  and  accounted 
for  by  him  each  year,  under  this  act,  in  addition  to 
his  salary  or  fees  now  allowed  by  law,  five  per  cent  £j$jecromp~ 
on  the  first  fifty  thousand  dollars  so  paid  and  ac- 
counted for  by  him,  three  per  cent  on  the  next  fifty 
thousand  dollars  so  paid  and  accounted  for  by  him, 
and  one  per  cent  on  all  additional  sums  so  paid  and 
accounted  for  by  him. 

§  23.  Any  person  or  body  politic  or  corporate 
shall,  upon  payment  of  the  sum  of  fifty  cents,  be  Rece;pt 
entitled  to  a  receipt  from  the  county  treasurer  of  co°u™ty 
any  county  or  comptroller  of  the  county  of  New 
York,  or  a  copy  of  the  receipt,  at  his  option,  that 
may  have  been  given  by  said  treasurer  or  comptroller  recorded- 
for  the  payment  of  any  tax  under  this  act,  to  be 
sealed  with  the  seal  of  his  office,  which  receipt  shall 
designate  on  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  said  tax  has 
been  paid,  and  by  whom  paid,  and  whether  or  not 
it  is  in  full  of  said  tax,  and  said  receipt  may  be  re-  ^""relwrd 
corded  in  the  clerk's  office  of  the  county  in  which 
said  property  is  situate,  in  a  book  to  be  kept  by  said 
clerk  for  such  purpose,  which  shall  be  labeled  "col- 
lateral tax." 

§  24.  All  taxes  levied  and  collected  under  this 
act,  shall  be  paid  into  the  treasury  of  the  State,  for  U8e8o{taiea 
the  uses  of  the  State,  and  shall  be  applicable  to  the 
payment  of  the  general  expenses  of  the  State  govern- 
ment and,  to  such  other  purposes  as  the  Legislature 
may  by  law  direct. 

§  25.  All  acts  or  parts  of  acts  inconsistent  with 
the  provisions  of  this  act  are  hereby  repealed. 

§  2.  This  act  shall  take  effect  immediately. 

Amendment  by  Laws  1889,  Chap.  479, 

In  effect  June  14,  1899,  amended  section  25  so  as  to  read  as  follows: 

§  25.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of 
this  act  are  hereby  repealed,  but  this  act  shall  apply  to  all  estates  of 
deceased  persons  where  no  assessment  of  the  tax  has  been  made  to 
which  such  estate  or  estates  are  liable  under  the  provisions  of  the  fore- 
going act. 


424  PRIOR   STATUTES 

Laws  of  1892,  Chap.  399,  in  effect  May  1,  1892. 

AN  ACT  in  relation  to  taxable  transfers  of  property. 

APPROVED  by  the  Governor  April  30,  1892.    Passed,  three-fifths 
being  present. 

The  People  of  the  State  of  New  York,  represented  in  Senate  and 
Assembly,  do  enact  as  follows: 

TAXABLE  TRANSFERS  OF  PROPERTY. 

SECTION  1.  Taxable  transfers. 

2.  Exceptions  and  limitations. 

3.  Lien  of  tax  and  payment  thereof. 

4.  Discount,  interest  and  penalty. 

5.  Collection  of  tax  by  executor,  administrators  and 

trustees. 

6.  Refund  of  tax  erroneously  paid. 

7.  Deferred  payments. 

8.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 

missions. 

9.  Liability  of  certain  corporations  to  tax. 

10.  Jurisdiction  of  the  surrogate. 

11.  Appointment  of  appraisers. 

12.  Proceedings  by  appraisers. 

13.  Determination  by  surrogate. 

14.  Surrogate's  assistants  in  New  York  City. 

15.  Proceedings  for  the  collection  of  taxes. 

16.  Receipt  from  the  county  treasurer  and  comp- 

troller. 

17.  Fees  of  county  treasurer  and  comptroller. 

18.  Books  and  forms  to  be  furnished  by  the  state 

comptroller. 

19.  Reports  of  surrogate  and  county  clerk. 

20.  Reports  of  county  treasurers  and  comptrollers  of 

the  city  of  New  York. 

21.  Application  of  taxes. 

22.  Definitions. 

23.  Laws  repealed. 

24.  Saving  clause. 

25.  Construction. 

26.  When  to  take  effect. 


LAWS   OF    1892,    CHAP.    399  425 

§  1.  Taxable  transfers. — A  tax  shall  be  and  is  hereby  im- 
posed upon  the  transfer  of  any  property,  real  or  personal,  of 
the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons 
or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of 
this  state  from  any  person  dying  seized  or  possessed  of  the  prop- 
erty while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property 
within  the  state,  and  the  decedent  was  a  non-resident  of  the 
state  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or 
by  a  non-resident,  when  such  non-resident's  property  is  within 
this  state,  by  deed,  grant,  bargain,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after 
such  death.     Such  tax  shall  also  be  imposed  when  any  such 
person  or  corporation  becomes  beneficially  entitled,  in  posses- 
sion or  expectancy,  to  any  property  or  the  income  thereof  by 
any  such  transfer,  whether  made  before  or  after  the  passage 
of  this  act.    Such  tax  shall  be  at  the  rate  of  five  per  cent  upon 
the  clear  market  value  of  such  property,  except  as  otherwise 
prescribed  in  the  next  section. 

§  2.  Exceptions  and  limitations. — When  the  property  or 
any  beneficial  interest  therein  passes  by  any  such  transfer 
to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a 
daughter,  or  any  child  or  children  adopted  as  such  in  conformity 
with  the  laws  of  this  state,  of  the  decedent,  grantor,  donor  or 
vendor,  or  to  any  person  to  whom  any  such  decedent,  grantor, 
donor  or  vendor  for  not  less  than  ten  years  prior  to  such  transfer 
stood  in  the  mutually  acknowledged  relation  of  a  parent  or  to 
any  lineal  descendant  of  such  decedent,  grantor,  donor  or  vendor 
born  in  lawful  wedlock,  such  transfer  of  property  shall  not  be 
taxable  under  this  act,  unless  it  is  personal  property  of  the  value 
of  ten  thousand  dollars  or  more,  in  which  case  it  shall  be  tax- 
able under  this  act  at  the  rate  of  one  per  centum  upon  the  clear 
market  value  of  such  property.  But  any  property  heretofore 
or  hereafter  devised  or  bequeathed  to  any  person  who  is  a  bishop 
or  to  any  religious  corporation  shall  be  exempted  from  and  not 
subject  to  the  provisions  of  this  act. 


426  PRIOR   STATUTES 

§  3.  Lien  of  tax  and  payment  thereof. — Every  such  tax 
shall  be  and  remain  a  lien  upon  the  property  transferred  until 
paid  and  the  person  to  whom  the  property  is  so  transferred, 
and  the  administrators,  executors  and  trustees  of  every  estate 
so  transferred  shall  be  personally  liable  for  such  tax  until  its 
payment.  The  tax  shall  be  paid  to  the  treasurer  or  comp- 
troller of  the  county  of  the  surrogate  having  jurisdiction  as 
herein  provided;  and  said  treasurer  or  comptroller  shall  give, 
and  every  executor,  administrator  or  trustee  shall  take,  dupli- 
cate receipts  from  him  of  such  payment,  one  of  which  he 
shall  immediately  send  to  the  comptroller  of  the  state,  whose 
duty  it  shall  be  to  charge  the  treasurer  or  comptroller  so  receiv- 
ing the  tax  with  the  amount  thereof  and  to  seal  said  receipt  with 
the  seal  of  his  office  and  countersign  the  same  and  return  it  to 
the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a 
proper  voucher  in  the  settlement  of  his  accounts;  but  no  execu- 
tor, administrator  or  trustee  shall  be  entitled  to  a  final  account- 
ing of  an  estate  in  settlement  of  which  a  tax  is  due  under  the 
provisions  of  this  act  unless  he  shall  produce  a  receipt  so  sealed 
and  countersigned  by  the  comptroller  or  a  copy  thereof  certified 
by  him,  or  unless  a  bond  shall  have  been  filed  as  prescribed 
by  section  seven  of  this  act.  All  taxes  imposed  by  this  act  shall 
be  due  and  payable  at  the  time  of  the  transfer,  provided,  how- 
ever, that  taxes  upon  the  transfer  of  any  estate,  property  or 
interest  therein  limited,  conditioned,  dependent  or  determinable 
upon  the  happening  of  any  contingency  or  future  event  by 
reason  of  which  the  fair  market  value  thereof  can  not  be  ascer- 
tained at  the  time  of  the  transfer  as  herein  provided  shall 
accrue  and  become  due  and  payable  when  the  persons  or  cor- 
porations beneficially  entitled  thereto  shall  come  into  actual 
possession  or  enjoyment  thereof. 

§  4.  Discount,  interest  and  penalty. — If  such  tax  is  paid 
within  six  months  from  the  accruing  thereof,  a  discount  of  five 
per  centum  shall  be  allowed  and  deducted  therefrom.  If  such 
tax  is  not  paid  within  eighteen  months  from  the  accruing  thereof, 
interest  shall  be  charged  and  collected  thereon  at  the  rate  of 
ten  per  centum  per  annum  from  the  time  the  tax  accrued;  un- 
less by  reason  of  claims  made  upon  the  estate  necessary  litigation 
or  other  unavoidable  cause  of  delay,  such  tax  can  not  be  de- 
termined and  paid  as  herein  provided,  in  which  case  interest 
at  the  rate  of  six  per  centum  per  annum  shall  be  charged  upon 
such  tax  from  the  accrual  thereof  until  the  cause  of  such  delay 


LAWS  OP   1892,   CHAt>.   399  427 

is  removed,  after  which  ten  per  centum  shall  be  charged.  In 
all  cases  when  a  bond  shall  be  given  under  the  provisions  of 
section  seven  of  this  act  interest  shall  be  charged  at  the  rate  of 
six  per  cent  from  the  accrual  of  the  tax  until  the  date  of  pay- 
ment thereof. 

§  5.  Collection  of  tax  by  executors,  administrators  and 
trustees. — Every  executor,  administrator,  or  trustee  shall 
have  full  power  to  sell  so  much  of  the  property  of  the  decedent 
as  will  enable  him  to  pay  such  tax  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts 
of  the  testator  or  intestate.  Any  such  administrator,  executor 
or  trustee  having  in  charge  or  in  trust  any  legacy  or  property 
for  distribution  subject  to  such  tax  shall  deduct  the  tax  there- 
from; and  within  thirty  days  therefrom  shall  pay  over  the  same 
to  the  county  treasurer  or  comptroller,  as  herein  provided.  If 
such  legacy  or  property  be  not  in  money,  he  shall  collect  the 
tax  thereon  upon  the  appraised  value  thereof  from  the  person 
entitled  thereto.  He  shall  not  deliver  or  be  compelled  to  deliver 
any  specific  legacy  or  property  subject  to  tax  under  this  act, 
to  any  person  until  he  shall  have  collected  the  tax  thereon. 
If  any  such  legacy  shall  be  charged  upon  or  payable  out  of 
real  property,  the  heir  or  devisee  shall  deduct  such  tax  there- 
from and  pay  it  to  the  administrator,  executor  or  trustee,  and 
the  tax  shall  remain  a  lien  or  charge  on  such  real  property  until 
paid,  and  the  payment  thereof  shall  be  enforced  by  the  execu- 
tor, administrator  or  trustee  in  the  same  manner  that  pay- 
ment of  the  legacy  might  be  enforced,  or  by  the  district  attorney 
under  section  fifteen  of  this  act.  If  any  such  legacy  shall  be 
given  in  money  to  any  such  person  for  a  limited  period,  the 
administrator,  executor  or  trustee  shall  retain  the  tax  upon 
the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make 
application  to  the  court  having  jurisdiction  of  an  accounting 
by  him,  to  make  an  apportionment,  if  the  case  require  it,  of 
the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such 
further  order  relative  thereto  as  the  case  may  require. 

§  6.  Refund  of  tax  erroneously  paid. — If  any  debts  shall 
be  proven  against  the  estate  of  a  decedent  after  the  payment 
of  any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the 
person  entitled  to  such  legacy  or  distributive  share  and  such 
person  is  required  to  refund  the  amount  of  such  debts  or  any 
part  thereof,  an  equitable  proportion  of  the  tax  shall  be  repaid 


428  PRIOR    STATUTES 

to  him  by  the  executor,  administrator  or  trustee,  if  the  tax 
has  not  been  paid  to  the  county  treasurer,  comptroller  of  the 
city  of  New  York  or  to  the  state  treasurer,  or  by  such  treasurer, 
comptroller,  or  state  treasurer,  if  such  tax  has  been  paid  to 
him.  When  any  amount  of  said  tax  shall  have  been  paid  er- 
roneously into  the  state  treasury,  it  shall  be  lawful  for  the  comp- 
troller of  this  state,  upon  satisfactory  proof  presented  to  him 
of  the  facts,  to  require  the  amount  of  such  erroneous  or  illegal 
payment  to  be  refunded  to  the  executor,  administrator,  trustee, 
person  or  persons  who  have  paid  any  such  tax  in  error  from  the 
treasury;  or  the  said  comptroller  may  by  order  direct  and  allow 
the  treasurer  of  any  county  or  the  comptroller  of  the  city  of 
New  York  to  refund  the  amount  of  any  illegal  or  erroneous  pay- 
ment of  such  tax  out  of  the  funds  in  his  hands  or  custody  to 
the  credit  of  such  taxes,  and  credit  himself  with  the  same  in 
his  quarterly  account  rendered  to  the  comptroller  of  this  state 
under  this  act;  provided,  however,  that  all  applications  for 
such  refunding  of  erroneous  taxes  shall  be  made  within  five 
years  from  the  payment  thereof. 

§  7.  Deferred  payment. — Any  person  or  corporation  bene- 
ficially interested  in  any  property  chargeable  with  a  tax  under 
this  act  and  executors,  administrators  and  trustees  thereof, 
may  elect  within  one  year  from  the  date  of  the  transfer  thereof 
as  herein  provided  not  to  pay  such  tax  until  the  person  or  per- 
sons beneficially  interested  therein  shall  come  into  the  actual 
possession  or  enjoyment  thereof.  If  it  be  personal  property, 
the  person  or  persons  so  electing  shall  give  a  bond  to  the  state 
in  penalty  of  three  times  the  amount  of  any  such  tax,  with 
such  sureties  as  the  surrogate  of  the  proper  county  may  ap- 
prove, conditioned  for  the  payment  of  such  tax  and  interest 
thereon,  at  such  time  or  period  as  the  person  or  persons  bene- 
ficially interested  therein  may  come  into  the  actual  possession 
or  enjoyment  of  such  property,  which  bond  shall  be  filed  hi  the 
office  of  the  surrogate.  Such  bond  must  be  executed  and  filed 
and  a  full  return  of  such  property  upon  oath  made  to  the  surro- 
gate within  one  year  from  the  date  of  transfer  thereof  as  herein 
provided,  and  such  bond  must  be  renewed  every  five  years. 

§  8.  Taxes  upon  devises  and  bequests  in  lieu  of  commis- 
sions.— If  a  testator  bequeaths  or  devises  property  to  one  or 
more  executors  or  trustees  in  lieu  of  their  commissions  or  al- 
lowances, or  makes  them  his  legatees  to  an  amount  exceeding 
the  commissions  or  allowances  prescribed  by  law  for  an  executor 


LAWS   OF    1892,    CHAP.    399  429 

or  trustee,  the  excess  in  value  of  the  property  so  bequeathed  or 
devised,  above  the  amount  of  commissions  or  allowances  pre- 
scribed by  law  in  similar  cases  shall  be  taxable  under  this  act. 

§  9.  Liability  of  certain  corporations  to  tax. — If  a  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the 
tax  shall  be  paid  to  the  treasurer  of  the  proper  county  or  the 
comptroller  of  the  city  of  New  York  on  the  transfer  thereof. 
No  safe  deposit  company,  bank  or  other  institution,  person 
or  persons  holding  securities  or  assets  of  a  decedent,  shall  de- 
liver or  transfer  the  same  to  the  executors,  administrators  or 
legal  representatives  of  said  decedent  unless  notice  of  the  time 
and  place  of  such  intended  transfer  be  served  upon  the  county 
treasurer  or  comptroller  at  least  five  days  prior  to  the  said 
transfer.  And  it  shall  be  lawful  for  the  said  county  treasurer 
or  comptroller,  personally  or  by  representative,  to  examine 
said  securities  or  assets  at  the  time  of  such  delivery  or  transfer. 
Failure  to  serve  such  notice  or  to  allow  such  examination  shall 
render  said  safe  deposit  company,  trust  company,  bank  or 
other  institution,  person  or  persons  liable  to  the  payment  of 
the  tax  due  upon  said  securities  or  assets  in  pursuance  of  the 
provisions  of  this  act. 

§  10.  Jurisdiction  of  the  surrogate. — The  surrogate's  court 
of  every  county  of  the  state  having  jurisdiction  to  grant  let- 
ters testamentary  or  of  administration  upon  the  estate  of  a 
decedent  whose  property  is  chargeable  with  any  tax  under  this 
act,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 
or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to 
hear  and  determine  all  questions  arising  under  the  provisions 
of  this  act,  and  to  do  any  act  in  relation  thereto  authorized  by 
law  to  be  done  by  a  surrogate  in  other  matters  or  proceedings 
coming  within  his  jurisdiction;  and  if  two  or  more  surrogate's 
courts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the 
surrogate  first  acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other  surrogate.  Every  petition 
for  ancillary  letters  testamentary  or  ancillary  letters  of  adminis- 
tration made  hi  pursuance  of  the  provisions  of  article  seven, 
title  three,  chapter  eighteen  of  the  Code  of  Civil  Procedure 
shall  set  forth  the  name  of  the  county  treasurer  or  comptroller 
as  a  person  to  be  cited  as  therein  prescribed,  and  a  true  and 
correct  statement  of  all  the  decedent's  property  in  this  state 


430  PRIOR   STATUTES 

and  the  value  thereof;  and  upon  the  presentation  thereof  the 
surrogate  shall  issue  a  citation  directed  to  such  county  treas- 
urer or  comptroller;  and  upon  the  return  of  the  citation  thn 
surrogate  shall  determine  the  amount  of  the  tax  which  may  be 
or  become  due  under  the  provisions  of  this  act  and  his  decree 
awarding  the  letters  may  contain  any  provision  for  the  pay- 
ment of  such  tax  or  the  giving  of  security  therefor  which  might 
be  made  by  such  surrogate  if  the  county  treasurer  or  comp- 
troller were  a  creditor  of  the  decedent. 

§  11.  Appointment  of  appraisers. — The  surrogate,  upon 
the  application  of  any  interested  party,  including  county  treas- 
urers, or  the  comptroller  of  New  York  city,  or  upon  his  own 
motion,  shall,  as  often  as  and  whenever  occasion  may  require, 
appoint  a  competent  person  as  appraiser,  to  fix  the  fair  market 
value,  at  the  time  of  the  transfer  thereof,  of  property  of  per- 
sons whose  estates  shall  be  subject  to  the  payment  of  any  tax 
imposed  by  this  act.  If  the  property  upon  the  transfer  of  which 
a  tax  is 'imposed  shall  be  an  estate,  income  or  interest  for  a  term 
of  years,  or  for  life,  or  determinable  upon  any  future  or  con- 
tingent estate,  or  shall  be  a  remainder  or  reversion  or  other 
expectancy,  real  or  personal,  the  entire  property  or  fund  by 
which  such  estate,  income  or  interest  is  supported,  or  of  which 
it  is  a  part,  shall  be  appraised  immediately  after  such  transfer, 
or  as  soon  thereafter  as  may  be  practicable,  at  the  fair  and  clear 
market  value  thereof  at  that  time,  provided,  however,  that 
when  such  estate,  income  or  interest  shall  be  of  such  a  nature 
that  its  fair  and  clear  market  value  can  not  be  ascertained  at 
such  time,  it  shall  be  appraised  in  like  manner  at  the  time  when 
such  value  first  became  ascertainable.  The  value  of  every  fu- 
ture, or  contingent  or  limited  estate,  income,  interest  or  annuity 
dependent  upon  any  life  or  lives  in  being  shall  be  determined 
by  the  rule,  method  and  standard  of  mortality  and  value  em- 
ployed by  the  superintendent  of  insurance  in  ascertaining  the 
value  of  policies  of  life  insurance  and  annuities  for  the  deter- 
mination of  liabilities  of  life  insurance  companies;  except  that 
the  rate  of  interest  for  computing  the  present  value  of  all  future 
and  contingent  interests  or  estates  shall  be  five  per  centum  per 
annum. 

§  12.  Proceedings  by  appraisers. — Every  such  appraiser 
shall  forthwith  give  notice  by  mail  to  all  persons  known  to  have 
a  claim  or  interest  in  the  property  to  be  appraised,  including  the 
county  treasurer  or  comptroller,  and  to  such  persons  as  the 


LAWS   OF    1892,    CHAP.    399  431 

surrogate  may  by  order  direct,  of  the  time  and  place  when  he 
will  appraise  such  property.  He  shall,  at  such  time  and  place, 
appraise  the  same  at  its  fair  market  value,  as  herein  prescribed, 
and  for  that  purpose  the  said  appraiser  is  authorized  to  issue 
subpoenas  and  to  compel  the  attendance  of  witnesses  before 
him  and  to  take  the  evidence  of  such  witnesses  under  oath 
concerning  such  property  and  the  value  thereof;  and  he  shall 
make  report  thereof  and  of  such  value  in  writing,  to  the-  said 
surrogate,  together  with  the  depositions  of  the  witnesses  (ex- 
amined, and  such  other  facts  in  relation  thereto  and  to  the  said 
matter  as  said  surrogate  may  order  or  require.  Every  appraiser 
shall  be  paid  on  the  certificate  of  the  surrogate  at  the  rate  of 
three  dollars  per  day  for  every  day  actually  and  necessarily 
employed  in  such  appraisal,  and  his  actual  and  necessary  travel- 
ing expenses  and  the  fees  paid  such  witnesses  which  fees  shall 
be  the  same  as  those  now  paid  to  witnesses  subpoenaed  to  attend 
in  courts  of  record  by  the  county  treasurer  or  comptroller  out 
of  any  funds  he  may  have  in  his  hands  on  account  of  any  tax 
imposed  under  the  provisions  of  this  act. 

§  13.  Determination  by  surrogate. — The  report  of  the  ap- 
praiser shall  be  filed  in  the  office  of  the  surrogate,  and  from 
such  report  and  other  proof  relating  .to  any  such  estate  before 
the  surrogate,  the  surrogate  shall  forthwith  as  of  course  deter- 
mine the  cash  value  of  all  estates  and  the  amount  of  tax  to  which 
the  same  are  liable;  or,  the  surrogate  may  so  determine  the 
cash  value  of  all  such  estates  and  the  amount  of  tax  to  which 
the  same  are  liable  without  appointing  an  appraiser.  The 
superintendent  of  insurance  shall,  on  the  application  of  any 
surrogate,  determine  the  value  of  any  such  future  or  contin- 
gent estates,  income  or  interest  limited,  contingent,  dependent 
or  determinable  upon  the  life  or  lives  of  persons  in  being,  upon 
the  facts  contained  in  any  such  appraiser's  report,  and  certify 
the  same  to  the  surrogate,  and  his  certificate  shall  be  conclusive 
evidence  that  the  method  of  computation  adopted  therein  is 
correct.  Any  person  dissatisfied  with  the  appraisement  or 
assessment  and  determination  of  tax  may  appeal  therefrom 
to  the  surrogate  within  sixty  days  from  the  fixing,  assessing 
and  determination  of  tax  by  the  surrogate  as  herein  provided, 
upon  filing  in  the  office  of  the  surrogate  a  written  notice  of 
appeal,  which  shall  state  the  grounds  upon  which  the  appeal 
is  taken.  The  surrogate  shall  immediately  give  notice,  upon  the 
determination  by  him  as  to  the  value  of  any  estate  which  is 


432  PRIOR   STATUTES 

taxable  under  this  act,  and  of  the  tax  to  which  it  is  liable,  to 
all  parties  known  to  be  interested  therein. 

§  14.  Surrogate's  assistants  in  New  York  city. — The  comp- 
troller of  the  city  and  county  of  New  York  shall  retain  out 
of  any  funds  he  may  have  in  his  hands  on  account  of  said  tax 
a  sum  of  money  sufficient  to  provide  the  surrogate  in  the  city 
and  county  of  New  York  with  an  assistant,  appointed  by  said 
surrogate,  who  shall  be  known  as  the  transfer  tax  assistant, 
whose  salary  shall  be  four  thousand  dollars  a  year,  a  transfer 
tax  clerk  whose  salary  shall  be  two  thousand  four  hundred 
dollars  a  year,  an  assistant  clerk  whose  salary  shall  be  one 
thousand  eight  hundred  dollars  a  year,  and  a  recording  clerk 
whose  salary  shall  be  one  thousand  three  hundred  dollars  a 
year,  said  salaries  to  be  payable  monthly;  and  a  further  sum 
of  money,  not  exceeding  five  hundred  dollars  a  year,  to  be  used 
to  pay  the  expenses  of  the  said  surrogate  necessarily  incurred 
in  the  assessment  and  collection  of  said  tax,  said  amounts  to  be 
paid  upon  the  certificates  and  requisitions  of  said  surrogate 
respectively. 

§  15.  Proceedings  for  the  collection  of  taxes. — If  the  treas- 
urer or  comptroller  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal 
or  neglect  of  the  persons  liable  therefor  to  pay  the  same,  he 
shall  notify  the  district  attorney  of  the  county,  in  writing,  of 
such  failure  or  neglect,  and  such  district  attorney,  if  he  have 
probable  cause  to  believe  that  such  tax  is  due  and  unpaid,  shall 
apply  to  the  surrogate's  court  for  a  citation,  citing  the  persons 
liable  to  pay  such  tax  to  appear  before  the  court  on  the  day- 
specified,  not  more  than  three  months  after  the  date  of  such 
citation,  and  show  cause  why  the  tax  should  not  be  paid.  The 
surrogate  upon  such  application,  and  whenever  it  shall  appear 
to  him  that  any  such  tax  accruing  under  this  act  has  not  been 
paid  as  required  by  law,  shall  issue  such  citation  and  the  service 
of  such  citation,  and  the  time,  manner  and  proof  thereof,  and 
the  hearing  and  determination  thereon  and  the  enforcement 
of  the  determination  or  order  made  by  the  surrogate  shall  con- 
form to  the  provisions  of  the  Code  of  Civil  Procedure  for  the 
service  of  citations  out  of  the  surrogate's  court,  and  the  hearing 
and  determination  thereon  and  its  enforcement  so  far  as  the 
same  may  be  applicable.  The  surrogate  or  his  clerk  shall  upon 
request  of  the  district  attorney,  treasurer  or  comptroller  of 
the  county,  furnish  without  fee  one  or  more  transcripts  of  such 


LAWS   OF   1892,   CHAP.   399  433 

decree,  which  shall  be  docketed  and  filed  by  the  county  clerk 
of  any  county  of  the  state  without  fee,  in  the  same  manner  and 
with  the  same  effect  as  provided  by  law  for  filing  and  docket- 
ing transcripts  of  decrees  of  the  surrogate's  court.  The  costs 
awarded  by  any  such  decree  after  the  collection  and  payment 
of  the  tax  to  the  treasurer  or  comptroller  may  be  retained  by 
the  district  attorney  for  his  own  use.  Such  costs  shall  be  fixed 
by  the  surrogate  hi  his  discretion,  but  shall  not  exceed  in  any 
case  where  there  has  not  been  a  contest  the  sum  of  one  hundred 
dollars,  or  where  there  has  been  a  contest  the  sum  of  two  hun- 
dred and  fifty  dollars.  Whenever  the  surrogate  shall  certify 
that  there  was  probable  cause  for  issuing  a  citation  and  taking 
the  proceedings  specified  in  this  section,  the  state  treasurer 
shall  pay  or  allow  to  the  treasurer  or  the  comptroller  of  the 
county  all  expenses  incurred  for  the  service  of  citations  and 
other  lawful  disbursements  not  otherwise  paid.  In  proceedings 
to  which  any  county  treasurer  or  comptroller  is  cited  as  a  party 
under  sections  eleven  and  twelve  of  this  act,  the  state  comp- 
troller is  authorized  to  designate  and  retain  counsel  to  represent 
such  county  treasurer  or  comptroller  therein,  and  to  direct 
such  county  treasurer  or  comptroller  to  pay  the  expenses  thereby 
incurred,  out  of  the  funds  which  may  be  in  his  hands  on  account 
of  this  tax. 

§  16.  Receipt  from  the  county  treasurer  and  comptroller. — 
Any  person  shall  upon  the  payment  of  the  sum  of  fifty  cents 
be  entitled  to  a  receipt  from  the  county  treasurer  of  any  county 
or  the  comptroller  of  the  city  of  New  York,  or  at  his  option 
to  a  copy  of  a  receipt  that  may  have  been  given  by  such  treas- 
urer or  comptroller  for  the  payment  of  any  tax  under  this  act, 
under  the  official  seal  of  such  treasurer  or  comptroller,  which 
receipt  shall  designate  upon  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  such  tax  shall  have  been 
paid,  by  whom  paid,  and  whether  in  full  of  such  tax.  Such  re- 
ceipt may  be  recorded  in  the  clerk's  office  of  the  county  in  which 
such  property  is  situate,  in  a  book  to  be  kept  by  him  for  that 
purpose,  which  shall  be  labeled  "transfer  tax." 

§  17.  Fees  of  county  treasurer  and  comptroller. — The  treas- 
urer of  each  county  and  the  comptroller  of  the  city  and  county 
of  New  York,  shall  be  allowed  to  retain  on  all  taxes  paid  and 
accounted  for  by  him  each  year,  under  this  act,  five  per  centum 
on  the  first  fifty  thousand  dollars,  three  per  centum  on  the  next 
fifty  thousand  dollars,  and  one  per  centum  on  all  additional 
28 


434  RIOR   STATUTES 

sums.  Such  fees  shall  be  in  addition  to  the  salaries  and  fees 
now  allowed  by  law  to  such  officers. 

§  18.  Books  and  forms  to  be  furnished  by  the  state  comp- 
troller.— The  comptroller  of  the  state  shall  furnish  to  each 
surrogate,  a  book,  which  shall  be  a  public  record,  and  in  which 
he  shall  enter  the  name  of  every  decedent,  upon  whose  estate 
an  application  to  him  has  been  made  for  the  issue  of  letters  of 
administration,  or  letters  testamentary,  or  ancillary  letters,  the 
date  and  place  of  death  of  such  decedent,  the  estimated  value 
of  his  real  and  personal  property,  the  names,  places,  residences 
and  relationship  to  him  of  his  heirs-at-law,  the  names  and  places 
of  residence  of  the  legatees  and  devisees  in  any  will  of  any  such 
decedent,  the  amount  of  each  legacy  and  the  estimated  value  of 
any  real  property  devised  therein,  and  to  whom  devised.  These 
entries  shall  be  made  from  the  data  contained  in  the  papers 
filed  on  any  such  application,  or  in  any  proceeding  relating  to 
the  estate  of  the  decedent.  The  surrogate  shall  also  enter  in 
such  book  the  amount  of  the  personal  property  of  any  such 
decedent,  as  shown  by  the  inventory  thereof  when  made  and 
filed  in  his  office,  and  the  returns  made  by  any  appraiser  ap- 
pointed by  him  under  this  act,  and  the  value  of  annuities,  life 
estates,  terms  of  years  and  other  property  of  any  such  decedent 
or  given  by  him  in  his  will  or  otherwise,  as  fixed  by  the  surro- 
gate, and  the  tax  assessed  thereon,  and  the  amounts  of  any 
receipts  for  payment  of  any  tax  on  the  estate  of  such  decedent 
under  this  act  filed  with  him.  The  state  comptroller  shall  also 
furnish  to  each  surrogate  forms  for  the  reports  to  be  made  by 
such  surrogate,  which  shall  correspond  with  the  entries  to  be 
made  in  such  book. 

§  19.  Reports  of  surrogate  and  county  clerk. — Each  sur- 
rogate shall,  on  January,  April,  July  and  October  first  of  each 
year,  make  a  report  in  duplicate,  upon  the  forms  furnished  by 
the  comptroller  containing  all  the  data  and  matters  required 
to  be  entered  in  such  book,  one  of  which  shall  be  immediately 
delivered  to  the  county  treasurer  or  comptroller  and  the  other 
transmitted  to  the  state  comptroller.  The  county  clerk  of 
each  county  shall  at  the  same  time  make  reports  in  duplicate, 
containing  a  statement  of  any  deed  or  other  conveyance  filed 
or  recorded  in  his  office  of  any  property,  which  appears  to  have 
been  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  or  vendor,  with  the  name 
and  place  of  residence  of  such  grantor  or  vendor,  the  name  and 


LAWS   OF   1892,   CHAP.   399  435 

place  of  residence  of  the  grantee  or  vendee,  and  a  description 
of  the  property  transferred,  one  of  which  duplicates  shall  be 
immediately  delivered  to  the  county  treasurer  or  comptroller 
and  the  other  transmitted  to  the  state  comptroller. 

§  20.  Reports  of  county  treasurer  and  of  the  comptroller 
of  the  city  of  New  York. — Each  county  treasurer  and  the 
comptroller,  of  the  city  of  New  York  shall  make  a  report  under 
oath  to  the  state  comptroller,  on  January,  April,  July  and  Oc- 
tober first  of  each  year,  of  all  taxes  received  by  him  under  this 
act,  stating  for  what  estate  and  by  whom  and  when  paid.  The 
form  of  such  report  may  be  prescribed  by  the  state  comptroller. 
He  shall  at  the  same  time  pay  the  state  treasurer  all  taxes  re- 
ceived by  him  under  this  act  and  not  previously  paid  into  the 
state  treasury,  and  for  all  such  taxes  collected  by  him  and  not 
paid  into  the  state  treasury  within  thirty  days  from  the  times 
herein  required,  he  shall  pay  interest  at  the  rate  of  ten  per 
centum  per  annum. 

§  21.  Application  of  taxes. — All  taxes  levied  and  collected 
under  this  act  shall  be  paid  into  the  treasury  of  the  state  for  the 
use  of  the  state,  and  shall  be  applicable  to  the  expenses  of  the 
state  government  and  to  such  other  purposes  as  the  legislature 
shall  by  law  direct. 

§  22.  Definitions. — The  words  "estate"  and  "property" 
as  used  in  this  act  shall  be  taken  to  mean  the  property  or  in- 
terest therein  of  the  testator,  intestate,  grantor,  bargainer  or 
vendor,  passing  or  transferred  to  those  not  herein  specifically 
exempted  from  the  provisions  of  this  act  and  not  as  the  property 
or  interest  therein  passing  or  transferred  to  individual  legatees, 
devisees,  heirs,  next-of-kin,  grantees,  donees  or  vendees,  and 
shall  include  all  property  or  interest  therein,  whether  situated 
within  or  without  this  state,  over  which  this  state  has  any 
jurisdiction  for  the  purposes  of  taxation.  The  word  "transfer" 
as  used  in  this  act  shall  be  taken  to  include  the  passing  of  prop- 
erty or  any  interest  therein  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed, 
bargain,  sale  or  gift  in  the  manner  herein  prescribed.  The 
words  "county  treasurer,"  "comptroller"  and  "district  at- 
torney" as  used  in  this  act  shall  be  taken  to  mean  the  treasurer, 
comptroller  or  district  attorney  of  the  county  of  the  surrogate 
having  jurisdiction  as  provided  in  section  ten  of  this  act. 

§  23.  Laws  repealed. — Of  the  laws  enumerated  in  the  sched- 
ule hereto  annexed,  that  portion  specified  in  the  last  column 


436  PRIOR   STATUTES 

is  repealed.  Such  repeal  shall  not  revive  a  law  repealed  by 
any  law  hereby  repealed,  but  shall  include  all  laws  amendatory 
of  the  laws  hereby  repealed. 

§  24.  Saving  clause. — The  repeal  of  a  law  or  any  part  of  it 
specified  in  the  annexed  schedule  shall  not  affect  or  impair  any 
act  done,  or  right  accruing,  accrued  or  acquired,  or  liability, 
penalty,  forfeiture,  or  punishment  incurred  prior  tot  May  first, 
eighteen  hundred  and  ninety-two,  under  or  by  virtue  of  any 
law  so  repealed,  but  the  same  may  be  asserted,  enforced,  prose- 
cuted or  inflicted  as  fully  and  to  the  same  extent  as  if  such  law 
had  not  been  repealed;  and  all  actions  and  proceedings,  civil 
or  criminal,  commenced  under  or  by  virtue  of  the  law  so  re- 
pealed and  pending  on  April  thirtieth,  eighteen  hundred  and 
ninety-two,  may  be  prosecuted  and  defended  to  final  effect  in 
the  same  manner  as  they  might  under  the  laws  then  existing, 
unless  it  shall  be  otherwise  specially  provided  by  law. 

§  25.  Construction. — The  provisions  of  this  act,  so  far  as 
they  are  substantially  the  same  as  those  of  laws  existing  on 
April  thirtieth,  eighteen  hundred  and  ninety-two,  shall  be  con- 
strued as  a  continuation  of  such  laws,  modified  or  amended  ac- 
cording to  the  language  employed  in  this  act,  and  not  as  new 
enactments.  References  in  laws  not  repealed  to  provisions  of 
laws  incorporated  into  this  act  and  repealed,  shall  be  construed 
as  applying  to  the  provisions  so  incorporated.  Nothing  in  this 
act  shall  be  construed  to  amend  or  repeal  any  provision  of  the 
Criminal  or  Penal  Code. 

§  26.  When  to  take  effect.— This  act  shall  take  effect  on 
May  first,  eighteen  hundred  and  ninety-two. 

SCHEDULE  OF  LAWS  REPEALED 

Laws  of  Chapter  Sections 

1885 483  All. 

1887 713  All. 

1889 307 All. 

1889 479  All. 

1891.  .  .   215  .  .  All. 


LAWS   OP    1896,    CHAP.    908  437 

Laws  of  1896,  Chap.  908,  in  effect  June  15,  1896. 

ARTICLE  X. 

•\ 

Taxable  Transfers. 

Section  220.  Taxable  transfers. 

221.  Exceptions  and  limitations. 

222.  Lien  of  tax  and  payment  thereof. 

223.  Discount,  interest  and  penalty. 

224.  Collection  of  tax  by  executors,  administrators  and 

trustees. 

225.  Refund  of  tax  erroneously  paid. 

226.  Deferred  payments. 

227.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 

missions. 

228.  Liability  of  certain  corporations  to  tax. 

229.  Jurisdiction  of  the  surrogate. 

230.  Appointment  of  appraisers. 

231.  Proceedings  by  appraisers. 

232.  Determination  by  surrogate. 

233.  Surrogate's  assistants  in  New  York  city  and  Erie 

county. 

234.  Surrogate's  assistant  in  Kings  county. 

235.  Proceedings  for  the  collection  of  taxes. 

236.  Receipt  from  the  county  treasurer  and   comp- 

troller. 

237.  Fees  of  county  treasurer  and  comptroller. 

238.  Books  and  forms  to  be  furnished  by  the  state 

comptroller. 

239.  Reports  of  surrogate  and  county  clerk. 

240.  Reports  of  county  treasurers  and  comptrollers  *  of 

the  city  of  New  York. 

241.  Application  of  taxes. 

242.  Definitions. 

Section  220.  Taxable  transfers. — A  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  property,  real  or  personal,  of 
the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons 

1  So  in  the  original. 


438  PRIOR   STATUTES 

or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of 
this  state  from  any  person  dying  seized  or  possessed  of  the 
property  while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property 
within  the  state,  and  the  decedent  was  a  nonresident  of  the 
state  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by 
a  nonresident,  when  such  nonresident's  property  is  within  this 
state,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to 
take  effect,  in  possession  or  enjoyment,  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corpora- 
tion becomes  beneficially  entitled,  in  possession  or  expectancy, 
to  any  property  or  the  income  thereof  by  any  such  transfer, 
whether  made  before  or  after  the  passage  of  this  act.    Such  tax 
shall  be  at  the  rate  of  five  per  centum  upon  the  clear  market 
value  of  such  property,  except  as  otherwise  prescribed  in  the 
next  section. 

§  221.  Exceptions  and  limitations. — When  the  property  or 
any  beneficial  interest  therein  passes  by  any  such  transfer  to 
or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother, 
sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter, 
or  any  child  or  children  adopted  as  such  in  conformity  with 
the  laws  of  this  state,  of  the  decedent,  grantor,  donor  or  vendor 
or  to  any  person  to  whom  any  such  decedent,  grantor,  donor 
or  vendor  for  not  less  than  ten  years  prior  to  such  transfer 
stood  in  the  mutually  acknowledged  relation  of  a  parent,  or 
to  any  lineal  descendent  of  such  decedent,  grantor,  donor  or 
vendor  born  in  lawful  wedlock,  such  transfer  of  property  shall 
not  be  taxable  under  this  act,  unless  it  is  personal  property  of 
the  value  of  ten  thousand  dollars  or  more,  in  which  case  it 
shall  be  taxable  under  this  act  at  the  rate  of  one  per  centum 
upon  the  clear  market  value  of  such  property.  But  any  prop- 
erty heretofore  or  hereafter  devised  or  bequeathed  to  any 
person  who  is  a  bishop  or  to  any  religious  corporation  shall 
be  exempted  from  and  not  subject  to  the  provisions  of  this 
act. 

§  222.  Lien  of  tax  and  payment  thereof. — Every  such  tax 
shall  be  and  remain  a  lien  upon  the  property  transferred  until 
paid  and  the  person  to  whom  the  property  is  so  transferred, 


LAWS  OF  1896,  CHAP.  908  439 

and  the  administrators,  executors  and  trustees  of  every  estate 
so  transferred  shall  be  personally  liable  for  such  tax  until  its 
payment.  The  tax  shall  be  paid  to  the  treasurer  or  comptroller 
of  the  county  of  the  surrogate  having  jurisdiction  as  herein 
provided;  and  said  treasurer  or  comptroller  shall  give,  and 
every  executor,  administrator  or  trustee  shall  take  duplicate 
receipts  from  him  of  such  payment,  one  of  which  he  shall  im- 
mediately send  to  the  comptroller  of  the  state,  whose  duty  it 
shall  be  to  charge  the  treasurer  or  comptroller  so  receiving  the 
tax  with  the  amount  thereof  and  to  seal  said  receipt  with  the  seal 
of  his  office  and  countersign  the  same  and  return  it  to  the  execu- 
tor, administrator  or  trustee,  whereupon  it  shall  be  a  proper 
voucher  in  the  settlement  of  his  accounts;  but  no  executor, 
administrator  or  trustee  shall  be  entitled  to  a  final  accounting 
of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  pro- 
visions of  this  act  unless  he  shall  produce  a  receipt  so  sealed 
and  countersigned  by  the  comptroller  or  a  copy  thereof  certified 
by  him,  or  unless  a  bond  shall  have  been  filed  as  prescribed  by 
section  two  hundred  and  twenty-six  of  this  chapter.  All  taxes 
imposed  by  this  article  shall  be  due  and  payable  at  the  time 
of  the  transfer;  provided,  however,  that  taxes  upon  the  transfer 
of  any  estate,  property  or  interest  therein  limited,  conditioned, 
dependent  or  determinable  upon  the  happening  of  any  con- 
tingency or  future  event  by  reason  of  which  the  fair  market 
value  thereof  can  not  be  ascertained  at  the  time  of  the  transfer 
as  herein  provided  shall  accrue  and  become  due  and  payable 
when  the  persons  or  corporations  beneficially  entitled  thereto 
shall  come  into  actual  possession  or  enjoyment  thereof. 

§  223.  Discount,  interest  and  penalty. — If  such  tax  is  paid 
within  six  months  from  the  accruing  thereof,  a  discount  of  five 
per  centum  shall  be  allowed  and  deducted  therefrom.  If  such 
tax  is  not  paid  within  eighteen  months  from  the  accruing  thereof, 
interest  shall  be  charged  and  collected  thereon  at  the  rate  of 
ten  per  centum  per  annum  from  the  time  the  tax  accrued;  unless 
by  reasons  of  claims  made  upon  the  estate,  necessary  litigation 
or  other  unavoidable  cause  of  delay,  such  tax  can  not  be  deter- 
mined and  paid  as  herein  provided,  in  which  case  interest  at  the 
rate  of  six  per  centum  per  annum  shall  be  charged  upon  such 
tax  from  the  accrual  thereof  until  the  cause  of  such  delay  is 
removed,  after  which  ten  per  centum  shall  be  charged.  In  all 
cases  when  a  bond  shall  be  given  under  the  provisions  of  section 
two  hundred  and  twenty-six  of  this  chapter,  interest  shall  be 


440  PRIOR   STATUTES 

charged  at  the  rate  of  six  per  centum  from  the  accrual  of  the 
tax  until  the  date  of  payment  thereof. 

§  224.  Collection  of  tax  by  executors,  administrators  and 
trustees. — Every  executor,  administrator  or  trustee,  shall  have 
full  power  to  sell  so  much  of  the  property  of  the  decedent  as 
will  enable  him  to  pay  such  tax  in  the  same  manner  as  he  might 
be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  the 
testator  or  intestate.  Any  such  administrator,  executor  or 
trustee  having  in  charge  or  in  trust  any  legacy  or  property  for 
distribution  subject  to  such  tax  shall  deduct  the  tax  therefrom; 
and  within  thirty  days  therefrom  shall  pay  over  the  same  to 
the  county  treasurer  or  comptroller,  as  herein  provided.  If 
such  legacy  or  property  be  not  in  money,  he  shall  collect  the 
tax  thereon  upon  the  appraised  value  thereof  from  the  person 
entitled  thereto.  He  shall  not  deliver  or  be  compelled  to  deliver 
any  specific  legacy  or  property  subject  to  tax  under  this  article 
to  any  person  until  he  shall  have  collected  the  tax  thereon.  If 
any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom 
and  pay  it  to  the  administrator,  executor  or  trustee,  and  the 
tax  shall  remain  a  lien  or  charge  on  such  real  property  until 
paid,  and  the  payment  thereof  shall  be  enforced  by  the  executor, 
administrator  or  trustee  in  the  same  manner  that  payment  of 
the  legacy  might  be  enforced,  or  by  the  district  attorney  under 
section  two  hundred  and  thirty-five  of  this  chapter.  If  any 
such  legacy  shall  be  given  in  money  to  any  such  person  for  a 
limited  period,  the  administrator,  executor  or  trustee  shall 
retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money, 
he  shall  make  application  to  the  court  having  jurisdiction  of 
an  accounting  by  him,  to  make  an  apportionment,  if  the  case 
require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees, 
and  for  such  further  order  relative  thereto  as  the  case  may  re- 
quire. 

§  225.  Refund  of  tax  erroneously  paid. — If  any  debts  shall 
be  proven  against  the  estate  of  a  decedent  after  the  payment 
of  any  legacy  or  distributive  share  thereof,  from  which  any 
such  tax  has  been  deducted  or  upon  which  it  has  been  paid 
by  the  person  entitled  to  such  legacy  or  distributive  share  and 
such  person  is  required  to  refund  the  amount  of  such  debts  or 
any  part  thereof,  an  equitable  proportion  of  the  tax  shall  be 
repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the 
tax  has  not  been  paid  to  the  county  treasurer,  comptroller  of 


LAWS   OF    1896,    CHAP.    908  441 

the  city  of  New  York,  or  to  the  state  treasurer,  or  by  such  treas- 
urer, comptroller  or  state  treasurer,  if  such  tax  has  been  paid 
to  him.  When  any  amount  of  said  tax  shall  have  been  paid 
erroneously  into  the  state  treasury,  it  shall  be  lawful  for  the 
comptroller  of  this  state,  upon  satisfactory  proof  presented  to 
him  of  the  facts,  to  require  the  amount  of  such  erroneous  or 
illegal  payment  to  be  refunded  to  the  executor,  administrator, 
trustee,  person  or  persons  who  have  paid  any  such  tax  in  error, 
from  the  treasury;  or  the  said  comptroller  may,  by  order,  direct 
and  allow  the  treasurer  of  any  county  or  the  comptroller  of  the 
city  of  New  York  to  refund  the  amount  of  any  illegal  or  er- 
roneous payment  of  such  tax  out  of  the  funds  in  his  hands  or 
custody,  to  the  credit  of  such  taxes,  and  credit  himself  with  the 
same  in  his  quarterly  account  rendered  to  the  comptroller  of 
this  state  under  this  article;  provided,  however,  that  all  applica- 
tions for  such  refunding  of  erroneous  taxes  shall  be  made  within 
five  years  from  the  payment  thereof. 

§  226.  Deferred  payment. — Any  person  or  corporation  bene- 
ficially interested  in  any  property  chargeable  with  a  tax  under 
f,his  article,  and  executors,  administrators  and  trustees  thereof 
may  elect  within  one  year  from  the  date  of  the  transfer  thereof, 
as  herein  provided,  not  to  pay  such  tax  until  the  person 
or  persons  beneficially  interested  therein  shall  come  into  the 
actual  possession  or  enjoyment  thereof.  If  it  be  personal  prop- 
erty, the  person  or  persons  so  electing  shall  give  a  bond  to  the 
state  in  penalty  of  three  times  the  amount  of  any  such  tax,  with 
such  sureties  as  the  surrogate  of  the  proper  county  may  approve, 
conditioned  for  the  payment  of  such  tax  and  interest  thereon, 
at  such  time  or  period  as  the  person  or  persons  beneficially  in- 
terested therein  may  come  into  the  actual  possession  or  enjoy- 
ment of  such  property,  which  bond  shall  be  filed  in  the  office  of 
the  surrogate.  Such  bond  must  be  executed  and  filed  and  a  full 
return  of  such  property  upon  oath  made  to  the  surrogate  within 
one  year  from  the  date  of  transfer  thereof  as  herein  provided, 
and  such  bond  must  be  renewed  every  five  years. 

§  227.  Taxes  upon  devises  and  bequests  in  lieu  of  commis- 
sions.— If  a  testator  bequeaths  or  devises  property  to  one  or 
more  executors  or  trustees  in  lieu  of  their  commissions  or  al- 
lowances, or  makes  them  his  legatees  to  an  amount  exceeding 
the  commissions  or  allowances  prescribed  by  law  for  an  executor 
or  trustee,  the  excess  in  value  of  the  property  so  bequeathed 
or  devised,  above  the  amount  of  commissions  or  allowances 


442  PRIOR   STATUTES 

prescribed  by  law  in  similar  cases  shall  be  taxable  under  this 
article. 

§  228.  Liability  of  certain  corporations  to  tax. — If  a  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the 
tax  shall  be  paid  to  the  treasurer  of  the  proper  county  or  the 
comptroller  of  the  city  of  New  York  on  the  transfer  thereof. 
No  safe  deposit  company,  bank  or  other  institution,  person  or 
persons  holding  securities  or  assets  of  a  decedent,  shall  deliver 
or  transfer  the  same  to  the  executors,  administrators  or  legal 
representatives  of  said  decedent  unless  notice  of  the  time  and 
place  of  such  intended  transfer  be  served  upon  the  county  treas- 
urer or  comptroller  at  least  five  days  prior  to  the  said  transfer. 
And  it  shall  be  lawful  for  the  said  county  treasurer  or  comp- 
troller, personally  or  by  representative,  to  examine  said  securi- 
ties or  assets  at  the  time  of  such  delivery  or  transfer.  Failure 
to  serve  such  notice  or  to  allow  such  examination  shall  render 
said  safe  deposit  company,  trust  company,  bank  or  other  in- 
stitution, person  or  persons  liable  to  the  payment  of  the  tax 
due  upon  said  securities  or  assets  in  pursuance  of  the  provisions 
of  this  article. 

§  229.  Jurisdiction  of  the  surrogate. — The  surrogate's  court 
of  every  county  of  the  state  having  jurisdiction  to  grant  let- 
ters testamentary  or  of  administration  upon  the  estate  of  a 
decedent  whose  property  is  chargeable  with  any  tax  under 
this  article,  or  to  appoint  a  trustee  of  such  estate  or  any  part 
thereof,  or  to  give  ancillary  letters  thereon,  shall  have  jurisdic- 
tion to  hear  and  determine  all  questions  arising  under  the  pro- 
visions of  this  article,  and  to  do  any  act  in  relation  thereto  au- 
thorized by  law  to  be  done  by  a  surrogate  in  other  matters  or 
proceedings  coming  within  his  jurisdiction;  and  if  two  or  more 
surrogates'  courts  shall  be  entitled  to  exercise  any  such  juris- 
diction, the  surrogate  first  acquiring  jurisdiction  hereunder 
shall  retain  the  same  to  the  exclusion  of  every  other  surrogate. 
Every  petition  for  ancillary  letters  testamentary  or  ancillary 
letters  of  administration  made  in  pursuance  of  the  provisions 
of  article  seven,  title  three,  chapter  eighteen  of  the  code  of  civil 
procedure  shall  set  forth  the  name  of  the  county  treasurer  or 
comptroller  as  a  person  to  be  cited  as  therein  prescribed,  and 
a  true  and  correct  statement  of  all  the  decedent's  property  in 
this  state  and  the  value  thereof;  and  upon  the  presentation 


LAWS  OF  1896,  CHAP.  908  443 

thereof  the  surrogate  shall  issue  a  citation  directed  to  such 
county  treasurer  or  comptroller;  and  upon  the  return  of  the 
citation  the  surrogate  shall  determine  the  amount  of  the  tax 
which  may  be  or  become  due  under  the  provisions  of  this  article 
and  his  decree  awarding  the  letters  may  contain  any  provision 
for  the  payment  of  such  tax  or  the  giving  of  security  therefor 
which  might  be  made  by  such  surrogate  if  the  county  treasurer 
or  comptroller  were  a  creditor  of  the  decedent. 

§  230.  Appointment  of  appraisers. — The  surrogate,  upon 
the  application  of  any  interested  party,  including  county  treas- 
urers, or  the  comptroller  of  New  York  city,  or  upon  his  own 
motion,  shall,  as  often  as  and  whenever  occasion  may  require, 
appoint  a  competent  person  as  appraiser,  to  fix  the  fair  market 
value,  at  the  time  of  the  transfer  thereof  of  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  any  tax  im- 
posed by  this  article.  If  the  property  upon  the  transfer  of 
which  a  tax  is  imposed  shall  be  an  estate,  income  or  interest  for 
a  term  of  years,  or  for  life,  or  determinable  upon  any  future  or 
contingent  estate,  or  shall  be  a  remainder  or  reversion  or  other 
expectancy,  real  or  personal,  the  entire  property  or  fund  by 
which  such  estate,  income  or  interest  is  supported,  or  of  which 
it  is  a  part,  shall  be  appraised  immediately  after  such  transfer, 
or  as  soon  thereafter  as  may  be  practicable,  at  the  fair  and 
clear  market  value  thereof  at  that  time;  provided,  however, 
that  when  such  estate,  income  or  interest  shall  be  of  such  a 
nature  that  its  fair  and  clear  market  value  can  not  be  ascer- 
tained at  such  time,  it  shall  be  appraised  in  like  manner  at  the 
time  when  such  value  first  became  ascertainable.  The  value 
of  every  future,  or  contingent  or  limited  estate,  income,  interest 
or  annuity  dependent  upon  any  life  or  lives  in  being  shall  be 
determined  by  the  rule,  method  and  standard  of  mortality  and 
value  employed  by  the  superintendent  of  insurance  in  ascer- 
taining the  value  of  policies  of  life  insurance  and  annuities  for 
the  determination  of  liabilities  of  life  insurance  companies; 
except  that  the  rate  of  interest  for  computing  the  present  value 
of  all  future  and  contingent  interests  or  estates  shall  be  five 
per  centum  per  annum.  Whenever  an  estate  for  life  or  for  years 
can  be  divested  by  the  act  or  omission  of  the  legatee  or  devisee, 
it  shall  be  taxed  as  if  there  were  no  possibility  of  such  limitation. 

§  231.  Proceedings  by  appraisers. — Every  such  appraiser 
shall  forthwith  give  notice  by  mail  to  all  persons  known  to  have 
a  claim  or  interest  in  the  property  to  be  appraised,  including 


444  PRIOR   STATUTES 

the  county  treasurer  or  comptroller,  and  to  such  persons  as 
the  surrogate  may  by  order  direct,  of  the  time  and  place  when 
he  will  appraise  such  property.  He  shall,  at  such  time  and 
place,  appraise  the  same  at  its  fair  market  value,  as  herein 
prescribed,  and  for  that  purpose  the  said  appraiser  is  authorized 
to  issue  subpoenas  and  to  compel  the  attendance  of  witnesses 
before  him  and  to  take  the  evidence  of  such  witnesses  under 
oath  concerning  such  property  and  the  value  thereof;  and  he 
shall  make  report  thereof  and  of  such  value  in  writing,  to  the 
said  surrogate,  together  with  the  depositions  of  the  witnesses 
examined,  and  such  other  facts  in  relation  thereto  and  to  the 
said  matter  as  said  surrogate  may  order  or  require.  Every 
appraiser  shall  be  paid  on  the  certificate  of  the  surrogate  at  the 
rate  of  three  dollars  per  day  for  every  day  actually  and  neces- 
sarily employed  in  such  appraisal,  and  his  actual  and  necessary 
traveling  expenses  and  the  fees  paid  such  witnesses,  which  fees 
shall  be  the  same  as  those  now  paid  to  witnesses  subpoenaed 
to  attend  in  courts  of  record,  by  the  county  treasurer  or  comp- 
troller out  of  any  funds  he  may  have  in  his  hands  on  account 
of  any  tax  imposed  under  the  provisions  of  this  article. 

§  232.  Determination  of  surrogate. — The  report  of  the  ap- 
praiser shall  be  made  in  duplicate,  one  of  which  duplicates 
shall  be  filed  in  the  office  of  the  surrogate  and  the  other  in  the 
office  of  the  state  comptroller.  From  such  report  and  other 
proof  relating  to  any  such  estate  before  the  surrogate,  the  sur- 
rogate shall  forthwith,  as  of  course  determine  the  cash  value 
of  all  estates  and  the  amount  of  tax  to  which  the  same  are 
liable;  or  the  surrogate  may  so  determine  the  cash  value  of  all 
such  estates  and  the  amount  of  tax  to  which  the  same  are  liable, 
without  appointing  an  appraiser.  The  superintendent  of  in- 
surance shall,  on  the  application  of  any  surrogate,  determine 
the  value  of  any  such  future  or  contingent  estates,  income  or 
interest  limited,  contingent,  dependent  or  determinable  upon 
the  life  or  lives  of  persons  in  being,  upon  the  facts  contained  in 
any  such  appraiser's  report,  and  certify  the  same  to  the  surro- 
gate, and  his  certificate  shall  be  conclusive  evidence  that  the 
method  of  computation  adopted  therein  is  correct.  The  comp- 
troller of  the  state  of  New  York  or  any  person  dissatisfied  with 
the  appraisement  or  assessment  and  determination  of  tax, 
may  appeal  therefrom  to  the  surrogate  within  sixty  days  from 
the  fixing,  assessing  and  determination  of  tax  by  the  surrogate 
as  herein  provided,  upon  filing  in  the  office  of  the  surrogate  a 


LAWS   OF    1896,    CHAP.    908  445 

written  notice  of  appeal,  which  shall  state  the  grounds  upon 
which  the  appeal  is  taken.  The  surrogate  shall  immediately 
give  notice,  upon  the  determination  by  him  as  to  the  value  of 
any  estate  which  is  taxable  under  this  article,  and  of  the  tax 
to  which  it  is  liable,  to  all  parties  known  to  be  interested  therein, 
including  the  state  comptroller.  Within  two  years  after  the 
entry  of  an  order  or  decree  of  a  surrogate  determining  the  value 
of  an  estate  and  assessing  the  tax  thereon,  the  comptroller  of 
the  state  may,  if  he  believes  that  such  appraisal,  assessment  or 
determination  has  been  fraudulently,  collusively,  or  erroneously 
made,  make  application  to  a  justice  of  the  supreme  court  of 
the  judicial  district  in  which  the  former  owner  of  such  estate 
resided,  for  a  reappraisal  thereof.  The  justice  to  whom  such 
application  is  made  may  thereupon  appoint  a  competent  person 
to  reappraise  such  estate.  Such  appraiser  shall  possess  the 
powers,  be  subject  to  the  duties  and  receive  the  compensation 
provided  by  sections  two  hundred  and  thirty  and  two  hundred 
and  thirty-one  of  this  article.  Such  compensation  shall  be 
payable  by  the  county  treasurer  or  comptroller,  out  of  any 
funds  he  may  have  on  account  of  any  tax  imposed  under  the 
provisions  of  this  article,  upon  the  certificate  of  the  justice  ap- 
pointing him.  The  report  of  such  appraiser  shall  be  filed  with 
the  justice  by  whom  he  was  appointed,  and  thereafter  the  same 
proceedings  shall  be  taken  and  had  by  and  before  such  justice 
as  are  herein  provided  to  be  taken  and  had  by  and  before  the 
surrogate.  The  determination  and  assessment  of  such  justice 
shall  supersede  the  determination  and  assessment  of  the  sur- 
rogate, and  shall  be  filed  by  such  justice  in  the  office  of  the 
state  comptroller. 

§  233.  Surrogate's  and  district  attorney's  assistants  in 
New  York  city  and  Erie  county. — The  comptroller  of  the  city 
and  county  of  New  York  shall  retain,  out  of  any  funds  he  may 
have  in  his  hands  on  account  of  said  tax,  a  sum  of  money  suffi- 
cient to  provide  the  surrogates  in  the  city  and  county  of  New 
York  with  an  assistant,  appointed  by  said  surrogates,  who  shall 
be  known  as  the  transfer  tax  assistant,  whose  salary  shall  be 
four  thousand  dollars  a  year;  a  transfer  tax  clerk,  whose  salary 
shall  be  two  thousand  four  hundred  dollars  a  year;  an  assistant 
clerk,  whose  salary  shall  be  one  thousand  eight  hundred  dollars 
a  year,  and  a  recording  clerk,  whose  salary  shall  be  one  thousand 
three  hundred  dollars  a  year,  said  salaries  to  be  paid  monthly; 
and  a  further  sum  of  money,  not  exceeding  five  hundred  dollars 


446  PRIOR   STATUTES 

a  year,  to  be  used  to  pay  the  expenses  of  the  said  surrogates, 
necessarily  incurred  in  the  assessment  and  collection  of  said 
tax,  said  amounts  to  be  paid  upon  the  certificates  and  requisi- 
tions of  said  surrogates  respectively.  The  comptroller  of  the 
city  and  county  of  New  York  shall  also  retain,  out  of  any  funds 
he  may  have  in  his  hands  on  account  of  said  tax,  a  sum  of 
money  sufficient  to  provide  the  district  attorney  in  the  city  and 
county  of  New  York  with  an  assistant,  appointed  by  said  dis- 
trict attorney,  who  shall  be  known  as  the  transfer  tax  assistant, 
whose  salary  shall  be  three  thousand  dollars  a  year;  a  transfer 
tax  clerk  whose  salary  shall  be  two  thousand  four  hundred 
dollars  a  year,  and  a  surrogate's  process  server,  whose  salary 
shall  be  one  thousand  two  hundred  dollars  a  year,  said  salary 
to  be  payable  monthly;  and  a  further  sum  of  money  not  exceed- 
ing five  hundred  dollars  a  year,  to  be  used  to  pay  the  expenses 
of  the  said  district  attorney,  for  the  conduct  and  prosecution 
of  the  proceedings  mentioned  in  section  two  hundred  and  thirty- 
five  of  this  chapter,  said  amounts  to  be  paid  upon  the  certificate 
and  requisition  of  said  district  attorney.  The  county  treasurer 
of  the  county  of  Erie  shall  also  retain  out  of  any  funds  he  may 
have  in  his  hands  on  account  of  said  tax,  a  sum  of  money  suffi- 
cient to  provide  the  district  attorney  in  the  county  of  Erie 
with  an  assistant,  appointed  by  the  said  district  attorney, 
who  shall  be  known  as  the  transfer  tax  assistant,  whose  salary 
shall  be  two  thousand  dollars  a  year,  said  salary  to  be  paid 
monthly. 

§  234.  Surrogate's  assistants  in  Kings  county. — The  county 
treasurer  of  the  county  of  Kings  shall,  from  time  to  time,  re- 
tain out  of  any  funds  which  he  may  have  in  his  hands,  on  ac- 
count of  taxes  collected  under  this  article,  a  sum  of  money  suffi- 
cient to  provide  the  surrogate  of  the  county  of  Kings  with  an 
assistant,  to  be  known  as  the  transfer  tax  assistant  and  a  trans- 
fer tax  clerk.  Such  assistants  shall  be  appointed  by  the  surro- 
gate, and  the  transfer  tax  assistant  shall  receive  an  annual  salary 
of  four  thousand  dollars,  and  the  transfer  tax  clerk,  an  annual 
salary  of  two  thousand  dollars.  Such  salaries  shall  be  payable 
monthly.  Such  county  treasurer  shall  also  retain,  out  of  such 
funds,  a  further  sum  not  exceeding  five  hundred  dollars  in  any 
one  year,  for  the  necessary  expenses  of  such  surrogate,  in  the 
assessment  and  collection  of  such  tax.  Such  salaries  and  said 
amount  shall  be  paid  upon  the  certificates  and  requisitions  of 
such  surrogate,  respectively. 


LAWS  OF   1896,   CHAP.   908  447 

§  235.  Proceedings  for  the  collection  of  taxes. — If  the  treas- 
urer or  comptroller  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  article,  after  the 
refusal  or  neglect  of  the  persons  liable  therefor  to  pay  the  same, 
he  shall  notify  the  district  attorney  of  the  county,  in  writing, 
of  such  failure  or  neglect,  and  such  district  attorney,  if  he  have 
probable  cause  to  believe  that  such  tax  is  due  and  unpaid,  shall 
apply  to  the  surrogate's  court  for  a  citation,  citing  the  persons 
liable  to  pay  such  tax  to  appear  before  the  court  on  the  day 
specified,  not  more  than  three  months  after  the  date  of  such 
citation,  and  show  cause  why  the  tax  should  not  be  paid.  The 
surrogate,  upon  such  application,  and  whenever  it  shall  appear 
to  him  that  any  such  tax  accruing  under  this  article  has  not 
been  paid  as  required  by  law,  shall  issue  such  citation  and  the 
service  of  such  citation,  and  the  time,  manner  and  proof  thereof, 
and  the  hearing  and  determination  thereon  and  the  enforce- 
ment of  the  determination  or  order  made  by  the  surrogate  shall 
conform  to  the  provisions  of  the  code  of  civil  procedure  for  the 
service  of  citations  out  of  the  surrogate's  court,  and  the  hearing 
and  determination  thereon  and  its  enforcement  so  far  as  the 
same  may  be  applicable.  The  surrogate  or  his  clerk  shall,  upon 
request  of  the  district  attorney,  treasurer  or  comptroller  of  the 
county  or  the  comptroller  of  the  state,  furnish,  without  fee, 
one  or  more  transcripts  of  such  decree,  which  shall  be  docketed 
and  filed  by  the  county  clerk  of  any  county  of  the  state  without 
fee,  in  the  same  manner  and  with  the  same  effect  as  provided 
by  law  for  filing  and  docketing  transcripts  of  decrees  of  the 
surrogate's  court.  The  costs  awarded  by  any  such  decree  after 
the  collection  and  payment  of  the  tax  to  the  treasurer  or  comp- 
troller may  be  retained  by  the  district  attorney  for  his  own  use. 
Such  costs  shall  be  fixed  by  the  surrogate  in  his  discretion,  but 
shall  not  exceed  in  any  case  where  there  has  not  been  a  contest, 
the  sum  of  one  hundred  dollars,  or  where  there  has  been  a  con- 
test the  sum  of  two  hundred  and  fifty  dollars.  Whenever  the 
surrogate  shall  certify  that  there  was  probable  cause  for  issuing 
a  citation  and  taking  the  proceedings  specified  in  this  section, 
the  state  treasurer  shall  pay  or  allow  to  the  treasurer  or  the 
comptroller  of  a  county  all  expenses  incurred  for  the  service  of 
citations  and  other  lawful  disbursements  not  otherwise  paid. 
In  proceedings  to  which  any  county  treasurer  or  comptroller 
is  cited  as  a  party  under  sections  two  hundred  and  thirty  and 
two  hundred  and  thirty-one  of  this  article,  the  state  comptroller 


448  PRIOR   STATUTES 

is  authorized  to  designate  and  retain  counsel  to  represent  such 
county  treasurer  or  comptroller  therein,  and  to  direct  such 
county  treasurer  or  comptroller  to  pay  the  expenses  thereby 
incurred  out  of  the  funds  which  may  be  in  his  hands  on  account 
of  this  tax.  And  the  comptroller  of  the  state  is  hereby  author- 
ized, with  the  approval  of  the  attorney-general,  and  a  justice 
of  the  supreme  court  of  the  judicial  district  in  which  the  former 
owner  resided,  to  compromise  and  settle  the  amount  of  such 
tax  in  any  case  where  controversies  have  arisen  or  may  here- 
after arise  as  to  the  relationship  of  the  beneficiaries  to  the  former 
owner  thereof. 

§  236.  Receipt  from  the  county  treasurer  and  comptroller.— 
Any  person  shall  upon  the  payment  of  the  sum  of  fifty  cents  be 
entitled  to  a  receipt  from  the  county  treasurer  of  any  county 
or  the  comptroller  of  the  city  of  New  York,  or  at  his  option  to 
a  copy  of  a  receipt  that  may  have  been  given  by  such  treasurer 
or  comptroller  for  the  payment  of  any  tax  under  this  article, 
under  the  official  seal  of  such  treasurer  or  comptroller,  which 
receipt  shall  designate  upon  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  such  tax  shall  have  been 
paid,  by  whom  paid,  and  whether  in  full  of  such  tax.  Such 
receipt  may  be  recorded  in  the  clerk's  office  of  the  county  in 
which  such  property  is  situate,  in  a  book  to  be  kept  by  him  for 
that  purpose,  which  shall  be  labeled  "transfer  tax." 

§  237.  Fees  of  county  treasurer  and  comptroller. — The 
treasurer  of  each  county  and  the  comptroller  of  the  city  and 
county  of  New  York,  shall  be  allowed  to  retain  on  all  taxes 
paid  and  accounted  for  by  him  each  year,  under  this  article, 
five  per  centum  on  the  first  fifty  thousand  dollars,  three  per 
centum  on  the  next  fifty  thousand  dollars,  and  one  per  centum 
on  all  additional  sums.  Such  fees  shall  be  in  addition  to  the 
salaries  and  fees  now  allowed  by  law  to  such  officers,  except 
that  in  the  counties  of  Erie  and  Monroe  such  per  centum  shall 
be  credited  to  and  belong  to  the  county  where  collected. 

§  238.  Books  and  forms  to  be  furnished  by  the  state  comp- 
troller.— The  comptroller  of  the  state  shall  furnish  to  each 
surrogate,  a  book,  which  shall  be  a  public  record,  and  in  which 
he  shall  enter  the  name  of  every  decedent  upon  whose  estate 
an  application  to  him  has  been  made  for  the  issue  of  letters  of 
administration,  or  letters  testamentary,  or  ancillary  letters,  the 
date  and  place  of  death  of  such  decedent,  the  estimated  value 
of  his  real  and  personal  property,  the  names,  places,  residence 


LAWS   OF    1896,    CHAP.    908  449 

and  relationship  to  him  of  his  heirs-at-law,  the  names  and  places 
of  residence  of  the  legatees  and  devisees  in  any  will  of  any  such 
decedent,  the  amount  of  each  legacy  and  the  estimated  value 
of  any  real  property  devised  therein,  and  to  whom  devised. 
These  entries  shall  be  made  from  the  data  contained  in  the 
papers  filed  on  any  such  application,  or  in  any  proceeding  re- 
lating to  the  estate  of  the  decedent.  The  surrogate  shall  also 
enter  in  such  book  the  amount  of  the  personal  property  of  any 
such  decedent,  as  shown  by  the  inventory  thereof  when  made 
and  filed  in  his  office,  and  the  returns  made  by  any  appraiser 
appointed  by  him  under  this  article,  and  the  value  of  annuities, 
life  estates,  terms  of  years,  and  other  property  of  any  such 
decedent  or  given  by  him  in  his  will  or  otherwise,  as  fixed  by 
the  surrogate,  and  the  tax  assessed  thereon,  and  the  amounts 
of  any  receipts  for  payment  of  any  tax  on  the  estate  of  such  de- 
cedent under  this  article  filed  with  him.  The  state  comptroller 
shall  also  furnish  to  each  surrogate  forms  for  the  reports  to  be 
made  by  such  surrogate,  which  shall  correspond  with  the  en- 
tries to  be  made  in  such  book. 

§  239.  Reports  of  surrogate  and  county  clerk. — Each  sur- 
rogate shall,  on  January,  April,  July  and  October  first  of  each 
year,  make  a  report  in  duplicate,  upon  the  forms  furnished  by 
the  comptroller  containing  all  the  data  and  matters  required 
to  be  entered  in  such  book,  one  of  which  shall  be  immediately 
delivered  to  the  county  treasurer  or  comptroller  and  the  other 
transmitted  to  the  state  comptroller.  The  county  clerk  of 
each  county  shall,  at  the  same  times,  make  reports  in  duplicate, 
containing  a  statement  of  any  deed  or  other  conveyance  filed 
or  recorded  in  his  office,  of  any  property,  which  appears  to  have 
been  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  or  vendor,  with  the  name 
and  place  of  residence  of  such  grantor  or  vendor,  the  name  and 
place  of  residence  of  the  grantee  or  vendee,  and  a  description 
of  the  property  transferred,  one  of  which  duplicates  shall  be 
immediately  delivered  to  the  county  treasurer  or  comptroller 
and  the  other  transmitted  to  the  state  comptroller. 

§  240.  Reports  of  county  treasurer  and  of  the  comptroller 
of  the  city  of  New  York. — Each  county  treasurer  and  the 
comptroller  of  the  city  of  New  York  shall  make  a  report,  under 
oath,  to  the  state  comptroller,  on  January,  April,  July  and 
October  first  of  each  year,  of  all  taxes  received  by  him  under 
this  article,  stating  for  what  estate  and  by  whom  and  when 
29 


450  PRIOR   STATUTES 

paid.  The  form  of  such  report  may  be  prescribed  by  the  state 
comptroller.  He  shall,  at  the  same  time,  pay  the  state  treas- 
urer all  taxes  received  by  him  under  this  article  and  not  pre- 
viously paid  into  the  state  treasury,  and  for  all  such  taxes  col- 
lected by  him  and  not  paid  into  the  state  treasury  within  thirty 
days  from  the  times  herein  required,  he  shall  pay  interest  at 
the  rate  of  ten  per  centum  per  annum. 

§  241.  Application  of  taxes. — All  taxes  levied  and  collected 
under  this  article  shall  be  paid  into  the  treasury  of  the  state 
for  the  use  of  the  state,  and  shall  be  applicable  to  the  expenses 
of  the  state  government  and  to  such  other  purposes  as  the  legis- 
lature shall  by  law  direct. 

§  242.  Definitions. — The  words  "estate"  and  "property," 
as  used  in  this  article,  shall  be  taken  to  mean  the  property  or 
interest  therein  of  the  testator,  intestate,  grantor,  bargainer 
or  vendor,  passing  or  transferred  to  those  not  herein  specifically 
exempted  from  the  provisions  of  this  article  and  not  as  the 
property  or  interest  therein  passing  or  transferred  to  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees, 
and  shall  include  all  property  or  interest  therein,  whether  situ- 
ated within  or  without  this  state,  over  which  this  state  has  any 
jurisdiction  for  the  purposes  of  taxation.  The  word  "transfer," 
as  used  in  this  article,  shall  be  taken  to  include  the  passing  of 
property  or  any  interest  therein  in  possession  or  enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  bequest, 
grant,  deed,  bargain,  sale  or  gift,  in  the  manner  herein  pre- 
scribed. The  words  "county  treasurer,"  "comptroller"  and 
"district  attorney,"  as  used  in  this  article  shall  be  taken  to 
mean  the  treasurer,  comptroller  or  district  attorney  of  the 
county  of  the  surrogate  having  jurisdiction  as  provided  in  sec- 
tion two  hundred  and  twenty-nine  of  this  article. 

Amendment  by  Laws  of  1897,  Chap.  284, 

In  effect  April  16,  1897,  amended  sections  220,  222,  226,  226,  230, 
and  232,  to  wit: 

Section  1.  The  following  sections  of  chapter  nine  hundred  and 
eight  of  the  laws  of  eighteen  hundred  and  ninety-six,  entitled  "An 
act  in  relation  to  taxation,  constituting  chapter  twenty-four  of  the 
general  laws,"  relating  to  taxable  transfers  of  property,  are  hereby 
amended  to  take  effect  immediately,  and  to  read  as  follows: 

§  220.  Taxable  transfers. — A  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of 


LAWS   OF    1897,    CHAP.    284  451 

five  hundred  dollars  or  over,  or  of  any  interest  therein  or  income  there- 
from, hi  trust  or  otherwise,  to  persons  or  corporations  not  exempt 
by  law  from  taxation  on  real  or  personal  property,  in  the  following 
cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  dying  seized  or  possessed  of  the  property  while  a 
resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within 
the  state,  and  the  decedent  was  a  nonresident  of  the  state  at  the  time 
of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a 
nonresident  when  such  nonresident's  property  is  within  this  state 
by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  the  death 
of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

4.  (Such  tax  shall  be  imposed)  When  any  such  person  or  corpora- 
tion becomes  beneficially  entitled,  hi  possession  or  expectancy,  to 
any  property  or  the  income  thereof  by  any  such  transfer,  whether 
made  before  or  after  the  passage  of  this  act. 

5.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either 
before  or  after  the  passage  of  this  act,  such  appointment  when  made 
shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this  act 
in  the  same  manner  as  though  the  property  to  which  such  appoint- 
ment relates  belonged  absolutely  to  the  donee  of  such  power  and  had 
been  bequeathed  or  devised  by  such  donee  by  will;  and  whenever 
any  person  or  corporation  possessing  such  a  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  tune  provided 
therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the  provisions 
of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such  omis- 
sions or  failure,  in  the  same  manner  as  though  the  persons  or  corpora- 
tions thereby  becoming  entitled  to  the  possession  or  enjoyment  of 
the  property  to  which  such  power  related  had  succeeded  thereto  by  a 
will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking 
effect  at  the  time  of  such  omission  or  failure. 

6.  The  tax  imposed  thereby  shall  be  at  the  rate  of  five  per  centum 
upon  the  clear  market  value  of  such  property,  except  as  otherwise 
prescribed  in  the  next  section. 

§  222.  Lien  of  tax  and  payment  thereof. — Every  such  tax  shall 
be  and  remain  a  lien  upon  the  property  transferred  until  paid  and  the 
person  to  whom  the  property  is  so  transferred,  and  the  administra- 
tors, executors  and  trustees  of  every  estate  so  transferred  shall  be 
personally  liable  for  such  tax  until  its  payment.  The  tax  shall  be  paid 
to  the  treasurer  or  the  comptroller  of  the  county  of  the  surrogate 
having  jurisdiction  as  herein  provided;  and  said  treasurer  or  comp- 
troller shall  give,  and  every  executor,  administrator,  or  trustees,  shall 


452  PRIOR   STATUTES 

take  duplicate  receipts  from  him  of  such  payment,  one  of  which  he 
shall  immediately  send  to  the  comptroller  of  the  state,  whose  duly 
it  shall  be  to  charge  the  treasurer  or  comptroller  so  receiving  the  tax 
with  the  amount  thereof  and  to  seal  said  receipt  with  the  seal  of  his 
office  and  countersign  the  same  and  return  it  to  the  executor,  adminis- 
trator or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment of  his  accounts;  but  no  executor,  administrator  or  trustee  shall  be 
entitled  to  a  final  accounting  of  an  estate  in  settlement  of  which  a  tax 
is  due  under  the  provisions  of  this  act,  unless  he  shall  produce  a  receipt 
so  sealed  and  countersigned  by  the  state  comptroller  or  a  copy  thereof 
certified  by  him,  or  unless  a  bond  shall  have  been  filed  as  prescribed 
by  section  two  hundred  and  twenty-six  of  this  chapter.  All  taxes  im- 
posed by  this  article  shall  be  due  and  payable  at  the  tune  of  the  trans- 
fer, except  as  hereinafter  provided.  Taxes  upon  the  transfer  of  any 
estate,  property  or  interest  therein  limited,  conditioned,  dependent 
or  determinable  upon  the  happening  of  any  contingency  or  future 
event  by  reason  of  which  the  fair  market  value  thereof  can  not  be  as- 
certained at  the  time  of  the  transfer  as  herein  provided,  shall  accrue 
and  become  due  and  payable  when  the  persons  or  corporations  bene- 
ficially entitled  thereto  shall  come  into  actual  possession  or  enjoyment 
thereof. 

§  225.  Refund  of  tax  erroneously  paid. — If  any  debts  shall  be 
proven  against  the  estate  of  a  decedent  after  the  payment  of  any  legacy 
or  distributive  share  thereof,  from  which  any  such  tax  has  been  de- 
ducted or  upon  which  it  has  been  paid  by  the  person  entitled  to  such 
legacy  or  distributive  share,  and  such  person  is  required  by  order  of  the 
surrogate  having  jurisdiction,  on  notice  to  the  state  comptroller,  to  re- 
fund the  amount  of  such  debts  or  any  part  thereof,  an  equitable  propor- 
tion of  the  tax  shall  be  repaid  to  him  by  the  executor,  administrator  or 
trustee,  if  the  tax  has  not  been  paid  to  the  county  treasurer,  or  comp- 
troller of  the  city  of  New  York,  or  if  such  tax  has  been  paid  to  such 
treasurer  or  comptroller  of  the  city  of  New  York,  he  shall  refund  out 
of  the  funds  in  his  hands  or  custody  to  the  credit  of  such  taxes  such 
equitable  proportion  of  the  tax,  and  credit  himself  with  the  same  in 
his  quarterly  account  rendered  to  the  comptroller  of  the  state  under 
this  act.  If  after  the  payment  of  any  tax  in  pursuance  of  an  order 
fixing  such  tax,  made  by  the  surrogate  having  jurisdiction,  such  order 
be  modified  or  reversed,  on  due  notice  to  the  comptroller  of  the  state, 
the  state  comptroller  shall,  by  order,  direct  and  allow  the  treasurer 
of  the  county,  or  the  comptroller  of  the  city  of  New  York,  to  refund 
to  the  executor,  administrator,  trustee,  person  or  persons,  by  whom 
such  tax  had  been  paid,  the  amount  of  any  moneys  paid  or  deposited 
on  account  of  such  tax  in  excess  of  the  amount  of  the  tax  fixed  by  the 
order  modified  or  reversed,  out  of  the  funds  in  his  hands  or  custody, 
to  the  credit  of  such  taxes,  and  to  credit  himself  with  the  same  in  his 
quarterly  account  rendered  to  the  comptroller  of  the  state  under  this 


LAWS  OP  1897,  CHAP.  284  453 

act;  but  no  application  for  such  refund  shall  be  made  after  one  year 
from  such  reversal  or  modification,  and  the  comptroller  of  the  state, 
shall  deduct  from  the  fees  allowed  by  this  article  to  the  comptroller 
of  the  city  of  New  York  or  the  county  treasurer  the  amount  thereto- 
fore allowed  him  upon  such  overpayment.  Where  it  shall  be  proved 
to  the  satisfaction  of  the  surrogate  who  has  assessed  the  tax  upon  the 
transfer  of  property  under  this  article  that  deductions  for  debts  were 
allowed  upon  the  appraisal,  since  proved  to  have  been  erroneously 
allowed,  it  shall  be  lawful  for  such  surrogate  to  enter  an  order  assessing 
the  tax  upon  the  amount  wrongfully  or  erroneously  deducted. 

§  226.  Deferred  payment. — Any  person  or  corporation  beneficially 
interested  in  any  property  chargeable  with  a  tax  under  this  article, 
and  executors,  administrators  and  trustees  thereof  may  elect  within 
eighteen  months  from  the  date  of  the  transfer  thereof  as  herein  pro- 
vided, not  to  pay  such  tax  until  the  person  or  persons  beneficially 
interested  therein  shall  come  into  the  actual  possession  or  enjoyment 
thereof.  If  it  be  personal  property,  the  person  or  persons  so  electing 
shall  give  a  bond  to  the  state  in  penalty  of  three  tunes  the  amount  of 
any  such  tax,  with  such  sureties  as  the  surrogate  of  the  proper  county 
may  approve,  conditioned  for  the  payment  of  such  tax  and  interest 
thereon,  at  such  time  or  period  as  the  person  or  persons  beneficially 
interested  therein  may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  which  bond  shall  be  filed  in  the  office  of  the  surro- 
gate. Such  bond  must  be  executed  and  filed  and  a  full  return  of  such 
property  upon  oath  made  to  the  surrogate  within  one  year  from  the 
date  of  transfer  thereof  as  herein  provided,  and  such  bond  must  be 
renewed  every  five  years. 

§  230.  Appointment  of  appraisers. — The  surrogate,  upon  the  ap- 
plication of  any  interested  party,  including  the  state  comptroller, 
county  treasurers,  or  the  comptroller  of  New  York  city,  or  upon  his 
own  motion,  shall,  as  often  as,  and  whenever  occasion  may  require, 
appoint  a  competent  person  as  appraiser,  to  fix  the  fair  market  value 
(at  the  time  of  the  transfer  thereof)  of  property  of  persons  whose  es- 
tates shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  ar- 
ticle. If  the  property  upon  the  transfer  of  which  a  tax  is  imposed 
shall  be  an  estate,  income  or  interest,  or  shall  be  a  remainder  or  rever- 
sion or  other  expectancy,  real  or  personal,  the  title  to  which  is  fixed, 
absolute  and  indefeasible,  such  estate  or  estates  shall  be  appraised 
immediately  after  such  transfer,  or  as  soon  thereafter  as  may  be  prac- 
ticable, at  the  fair  and  clear  market  value  thereof  at  that  time;  pro- 
vided, however,  that  when  such  estate,  income  or  interest  shall  be  of 
such  a  nature  that  its  fair  and  clear  market  value  can  not  be  ascer- 
tained at  such  tune,  it  shall  be  appraised  in  like  manner  at  the  time 
when  such  value  first  becomes  ascertainable.  Estates  in  expectancy 
which  are  contingent  or  defeasible  shall  be  appraised  at  their  full, 
undiininished  value  when  the  persons  entitled  thereto  shall  come  into 


454  PRIOR   STATUTES 

the  beneficial  enjoyment  or  possession  thereof,  without  diminution  for 
or  on  account  of  any  valuation  theretofore  made  of  the  particular  es- 
tates for  purposes  of  taxation,  upon  which  said  estates  in  expectancy 
may  have  been  limited.  The  value  of  every  future  or  limited  estate, 
income,  interest  or  annuity  dependent  upon  any  life  or  lives  in  being, 
shall  be  determined  by  the  rule,  method  and  standard  of  mortality 
and  value  employed  by  the  superintendent  of  insurance  in  ascertaining 
the  value  of  policies  of  life  insurance  and  annuities  for  the  determina- 
tion of  liabilities  of  life  insurance  companies,  except  that  the  rate  of 
interest  for  making  such  computation  shall  be  five  per  centum  per 
annum.  In  estimating  the  value  of  any  estate  or  interest  in  property, 
to  the  beneficial  enjoyment  or  possession  whereof  there  are  persons  or 
corporations  presently  entitled  thereto,  no  allowance  shall  be  made 
in  respect  of  any  contingent  incumbrance  thereon,  nor  in  respect  of 
any  contingency  upon  the  happening  of  which  the  estate  or  property 
or  some  part  thereof  or  interest  therein  might  be  abridged,  defeated 
or  diminished;  provided,  however,  that  in  the  event  of  such  incum- 
brance taking  effect  as  an  actual  burden  upon  the  interest  of  the  bene- 
ficiary, or  in  the  event  of  the  abridgment,  defeat  or  diminution  of 
said  estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall 
be  made  to  the  person  properly  entitled  thereto  of  a  proportionate 
amount  of  such  tax  in  respect  of  the  amount  or  value  of  the  incum- 
brance when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the 
amount  which  would  have  been  assessed  in  respect  of  the  actual  dura- 
tion or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax 
shall  be  made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article.  Where  any  property  shall,  after  the  pas- 
sage o|  this  act,  be  transferred  subject  to  any  charge,  estate  or  in- 
terest, determinate  by  the  death  of  any  person,  or  at  any  period  as- 
certainable  only  by  reference  to  death,  the  increase  of  benefit  accruing 
to  any  person  or  corporation  upon  the  extinction  or  determination  of 
such  charge,  estate  or  interest  shall  be  deemed  a  transfer  of  property 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though 
the  person  or  corporation  beneficially  entitled  thereto  had  then  ac- 
quired such  increase  of  benefit  from  the  person  from  whom  the  title 
to  their  respective  estates  or  interests  is  derived.  When  property  is 
devised  or  bequeathed  in  trust  for  persons  hi  succession  who  are  all 
liable  to  taxation  at  the  same  rate,  it  shall  be  lawful  for  the  trustees 
thereof  to  pay  out  of  the  principal  of  the  trust  fund  or  property  the 
taxes  to  which  the  particular  estates  and  the  expectant  estates  limited 
thereon  may  be  respectively  liable;  and  when  such  remainders  or 
expectant  estates  shall  be  of  such  a  nature  or  so  disposed  and  circum- 
stanced that  the  taxes  thereon  shall  not  be  presently  payable  under  the 
provisions  of  this  act,  or  when  property  is  devised  or  bequeathed  in 
trust  for  persons  in  succession  who  are  not  liable  at  the  same  rate;  or 
where  some  of  the  persons  taking  in  succession  are  exempt,  it  shall, 


LAWS   OF   1897,    CHAP.    284  455 

nevertheless,  be  lawful  for  county  treasurers  and  the  comptroller  of 
New  York  city,  by  and  with  the  consent  of  the  comptroller  of  the 
state,  expressed  in  writing,  to  agree  with  such  trustees  and  to  compound 
such  taxes  upon  such  terms  as  may  be  deemed  equitable  and  expedient 
and  to  grant  discharges  to  said  trustees  upon  payment  of  the  taxes 
provided  for  in  such  compositions;  provided,  however,  that  no  such 
composition  shall  be  conclusive  in  favor  of  such  trustees  as  against 
the  interest  of  such  cestuis  que  trustent  as  may  possess  either  present 
rights  of  enjoyment  or  fixed,  absolute  and  indefeasible  rights  of  future 
enjoyment,  or  of  such  as  would  possess  such  rights  in  the  event  of  the 
immediate  termination  of  particular  estates,  unless  they  consent 
thereto,  either  personally  when  competent,  or  by  guardian  or  commit- 
tee. Such  compositions  when  made  shall  be  executed  in  triplicate  and 
one  copy  shall  be  filed  in  the  office  of  the  comptroller  of  the  state,  one 
copy  in  the  office  of  the  surrogate  and  one  copy  be  delivered  to  the 
trustees  who  shall  be  parties  thereto. 

§  232.  Determination  of  surrogate. — The  report  of  the  appraiser 
shall  be  made  in  duplicate,  one  of  which  duplicates  shall  be  filed  in 
the  office  of  the  surrogate  and  the  other  in  the  office  of  the  state  comp- 
troller. From  such  report  and  other  proof  relating  to  any  such  estate 
before  the  surrogate,  the  surrogate  shall  forthwith,  as  of  course  deter- 
mine the  cash  value  of  all  estates  and  the  amount  of  tax  to  which  the 
same  are  liable;  or  the  surrogate  may  so  determine  the  cash  value  of 
all  such  estates  and  the  amount  of  tax  to  which  the  same  are  liable, 
without  appointing  an  appraiser.  The  superintendent  of  insurance 
shall,  on  the  application  of  any  surrogate,  determine  the  value  of  any 
such  future  or  contingent  estates,  income  or  interest  therein  limited, 
contingent,  dependent  or  determinable  upon  the  life  or  lives  of  persons 
in  being,  upon  the  facts  contained  in  any  such  appraiser's  report,  and 
certify  the  same  to  the  surrogate,  and  his  certificate  shall  be  conclusive 
evidence  that  the  method  of  computation  adopted  therein  is  correct. 
The  comptroller  of  the  state  of  New  York  or  any  person  dissatisfied  with 
the  appraisement  or  assessment  and  determination  of  tax,  may  appeal, 
therefrom  to  the  surrogate,  within  sixty  days  from  the  fixing,  assess- 
ing and  determination  of  tax  by  the  surrogate  as  herein  provided, 
upon  filing  in  the  office  of  the  surrogate  a  written  notice  of  appeal 
which  shall  state  the  grounds  upon  which  the  appeal  is  taken.  The 
surrogate  shall  immediately  give  notice,  upon  the  determination  by 
him  as  to  the  value  of  any  estate  which  is  taxable  under  this  article, 
and  of  the  tax  to  which  it  is  liable,  to  all  parties  known  to  be  inter- 
ested therein,  including  the  state  comptroller.  Within  two  years 
after  the  entry  of  an  order  or  decree  of  a  surrogate  determining  the 
value  of  an  estate  and  assessing  the  tax  thereon,  the  comptroller  of 
the  state  may,  if  he  believes  that  such  appraisal,  assessment  or  deter- 
mination has  been  fraudulently,  collusively,  or  erroneously  made, 
make  application  to  a  justice  of  the  supreme  court  of  the  judicial  dis- 


456  PRIOR   STATUTES 

trict  in  which  the  former  owner  of  such  estate  resided,  for  a  reappraisal 
thereof.  The  justice  to  whom  such  application  is  made  may  thereupon 
appoint  a  competent  person  to  reappraise  such  estate.  Such  appraiser 
shall  possess  the  powers,  be  subject  to  the  duties  and  receive  the  com- 
pensation provided  by  sections  two  hundred  and  thirty  and  two  hun- 
dred and  thirty-one  of  this  article.  Such  compensation  shall  be  payable 
by  the  county  treasurer  or  comptroller,  out  of  any  funds  he  may  have 
on  account  of  any  tax  imposed  under  the  provisions  of  this  article,  upon 
the  certificate  of  the  justice  appointing  him.  The  report  of  such  ap- 
praiser shall  be  filed  with  the  justice  by  whom  he  was  appointed,  and 
thereafter  the  same  proceedings  shall  be  taken  and  had  by  and  before 
such  justice  as  herein  provided  to  be  taken  and  had  by  and  before  the 
surrogate.  The  determination  and  assessment  of  such  justice  shall 
supersede  the  determination  and  assessment  of  the  surrogate,  and 
shall  be  filed  by  such  justice  in  the  office  of  the  state  comptroller  and 
a  certified  copy  thereof  transmitted  to  the  surrogate's  court  of  the 
proper  county. 

Amendment  by  Laws  of  1899,  Chap.  76, 

In  effect  March  14,  1899,  amended  section  230,  to  wit: 

Section  1.  Section  two  hundred  and  thirty  of  chapter  nine  hun- 
dred and  eight  of  the  laws  of  eighteen  hundred  and  ninety-six,  en- 
titled "An  act  in  relation  to  taxation,  constituting  chapter  twenty- 
four  of  the  general  laws,"  as  amended  by  chapter  two  hundred  and 
eighty-four  of  the  laws  of  eighteen  hundred  and  ninety-seven,  relating 
to  taxable  transfers  of  property,  is  hereby  amended  to  read  as  follows: 

§  230.  Appointment  of  appraisers. — The  surrogate,  upon  the  ap- 
plication of  any  interested  party,  including  the  state  comptroller, 
county  treasurers,  or  the  comptroller  of  New  York  city,  or  upon  his 
own  motion,  shall,  as  often  as,  and  whenever  occasion  may  require,  ap- 
point a  competent  person  as  appraiser,  to  fix  the  fair  market  value  (at 
the  time  of  the  transfer  thereof)  of  property  of  persons  whose  estates 
shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  article. 
Whenever  a  transfer  of  property  is  made,  upon  which  there  is,  or  in 
any  contingency  there  may  be,  a  tax  imposed,  such  property  shall  be 
appraised  at  its  clear  market  value  immediately  upon  such  transfer,  or 
as  soon  thereafter  as  practicable.  The  value  of  every  future  or  limited 
estate,  income,  interest  or  annuity  dependent  upon  any  life  or  lives 
in  being,  shall  be  determined  by  the  rule,  method  and  standard  of 
mortality  and  value  employed  by  the  superintendent  of  insurance  in 
ascertaining  the  value  of  policies  of  life  insurance  and  annuities  for  the 
determination  of  liabilities  of  life  insurance  companies,  except  that 
the  rate  of  interest  for  making  such  computation  sliall  be  five  per 
centum  per  annum.  In  estimating  the  value  of  any  estate  or  interest 


LAWS  OF  1899,  CHAP.  76  457 

in  property,  to  the  beneficial  enjoyment  or  possession  whereof  there 
are  persons  or  corporations  presently  entitled  thereto,  no  allowance 
shall  be  made  in  respect  of  any  contingent  incumbrance  thereon,  nor 
in  respect  of  any  contingency  upon  the  happening  of  which  the  estate 
or  property  or  some  part  thereof  or  interest  therein  might  be  abridged, 
defeated  or  diminished;  provided,  however,  that  in  the  event  of  such 
incumbrance  taking  effect  as  an  actual  burden  upon  the  interest  of  the 
beneficiary,  or  hi  the  event  of  the  abridgment,  defeat  or  diminution 
of  said  estate  or  property  or  interest  therein  as  aforesaid,  a  return 
shall  be  made  to  the  person  properly  entitled  thereto  of  a  proportionate 
amount  of  such  tax  in  respect  of  the  amount  or  value  of  the  incumbrance 
when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the  amount 
which  would  have  been  assessed  in  respect  of  the  actual  duration  or 
extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be 
made  in  the  manner  provided  by  section  two  hundred  and  twenty-five 
of  this  article.  Where  any  property  shall,  after  the  passage  of  this 
act,  be  transferred  subject  to  any  charge,  estate  or  interest,  determin- 
able  by  the  death  of  any  person,  or  at  any  period  ascertainable  only 
by  reference  to  death,  the  increase  of  benefit  accruing  to  any  person  or 
corporation  upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest  shall  be  deemed  a  transfer  of  property  taxable  under 
the  provisions  of  this  act  hi  the  same  manner  as  though  the  person  or 
corporation  beneficially  entitled  thereto  had  then  acquired  such  in- 
crease of  benefit  from  the  person  from  whom  the  title  to  their  respective 
estates  or  interests  is  derived.  When  property  is  transferred  hi  trust 
or  otherwise,  and  the  rights,  interest  or  estates  of  the  transferees  are 
dependent  upon  contingencies  or  conditions  whereby  they  may  be 
wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall 
be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the  hap- 
pening of  any  of  the  said  contingencies  or  conditions,  would  be  pos- 
sible under  the  provisions  of  this  article,  and  such  tax  so  imposed  shall 
be  due  and  payable  forthwith,  out  of  the  property  transferred;  provided, 
however,  that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or  corporation 
exempt  from  taxation  under  the  provisions  of  this  article,  or  to  a  per- 
son taxable  at  a  rate  less  than  the  rate  imposed  and  paid,  such  person 
or  corporation  shall  be  entitled  to  a  return  of  so  much  of  the  tax  im- 
posed and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person  or  corporation  should  pay  under  the  provi- 
sions of  this  article,  with  legal  interest  thereon  from  the  tune  of  pay- 
ment. Such  return  of  overpayment  shall  be  made  hi  the  manner  pro- 
vided by  section  two  hundred  and  twenty-five  of  this  article.  All 
estates  upon  remainder  or  reversion,  which  vested  prior  to  June  thir- 
tieth, eighteen  hundred  and  eighty-five,  but  which  will  not  come  into 
actual  possession  or  enjoyment  of  the  person  or  corporation  benefi- 
cially interested  therein  until  after  the  passage  of  this  act  shall  be  ap- 


458  PRIOR    STATUTES 

praised  and  taxed  as  soon  as  the  person  or  corporation  beneficially 
interested  therein  shall  be  entitled  to  the  actual  possession  or  enjoy- 
ment thereof. 

Amendment  by  Laws  of  1901,  Chap.  173, 

In  effect  April  1,  1901,  added  two  new  sections,  230a  and  240a, 
and  amended  sections  222,  225,  228,  229,  230,  231,  232,  233,  234, 
235,  236,  237,  239,  240,  241,  242,  to  wit: 

Section  1.  Section  two  hundred  and  twenty-two  of  chapter  nine 
hundred  and  eight  of  the  laws  of  eighteen  hundred  and  ninety-six, 
entitled  "An  act  in  relation  to  taxation,  constituting  chapter  twenty- 
four  of  the  general  laws,"  as  amended  by  chapter  two  hundred  and 
eighty-four  of  the  laws  of  eighteen  hundred  and  ninety-seven,  is  hereby 
amended  to  read  as  follows: 

§  222.  Lien  of  taxes  and  payment  thereof. — Every  such  tax  shall 
be  and  remain  a  h'en  upon  the  property  transferred  until  paid  and 
the  person  to  whom  the  property  is  so  transferred,  and  the  adminis- 
trators, executors  and  trustees  of  every  estate  so  transferred  shall  be 
personally  liable  for  such  tax  until  its  payment.  The  tax  shall  be  paid 
to  the  treasurer  in  a  county  in  which  the  office  of  appraiser  is  not 
salaried,  and  in  other  counties,  to  the  state  comptroller  and  said  treas- 
urer or  state  comptroller  shall  give,  and  every  executor,  administrator 
or  trustee  shall  take,  duplicate  receipts  from  him  of  such  payment.  If 
such  duplicate  receipts  were  received  from  a  county  treasurer  such 
executor,  administrator  or  trustee  shall  immediately  send  one  of  them 
to  the  state  comptroller,  and  'if  received  from  the  state  comptroller 
he  shall  immediately  send  one  of  them  to  the  state  treasurer.  The 
state  comptroller  or  the  state  treasurer,  as  the  case  may  be,  receiving 
such  receipt  shall  charge  the  officer  receiving  the  tax  with  the  amount 
thereof  and  seal  said  receipt  with  the  seal  of  his  office  and  counter- 
sign the  same  and  return  it  to  the  executor,  administrator  or  trustee, 
whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  ac- 
counts; but  no  executor,  administrator  or  trustee  shall  be  entitled  to 
a  final  accounting  of  an  estate  in  settlement  of  which  a  tax  is  due  under 
the  provisions  of  this  act  unless  he  shall  produce  a  receipt  so  sealed 
and  countersigned,  or  a  certified  copy  thereof,  or  unless  a  bond  shall 
have  been  filed  as  prescribed  by  section  two  hundred  and  twenty-six 
of  this  chapter.  All  taxes  imposed  by  this  article  shall  be  due  and 
payable  at  the  time  of  the  transfer,  except  as  hereinafter  provided. 
Taxes  upon  the  transfer  of  any  estate,  property  or  interest  therein 
limited,  conditioned,  dependent  or  determinate  upon  the  happening 
of  any  contingency  or  future  event  by  reason  of  which  the  fair  market 
value  thereof  cannot  be  ascertained  at  the  time  of  the  transfer  as  herein 
provided,  shall  accrue  and  become  due  and  payable  when  the  persons 


LAWS   OF    1901,    CHAP.    173  459 

or  corporations  beneficially  entitled  thereto  shall  come  into  actual 
possession  or  enjoyment  thereof.  All  taxes  which,  at  the  time  the 
amendment  to  this  section  takes  effect,  have  been  assessed  by  an  order 
of  the  surrogate,  or  which  have  accrued,  hi  a  county  in  which  the 
office  of  appraiser  is  salaried,  shall  be  paid  to  the  state  comptroller, 
as  provided  by  this  article. 

§  2.  Section  two  hundred  and  twenty-four  of  such  chapter  is  hereby 
amended  to  read  as  follows: 

§  224.  Collection  of  tax  by  executors,  administrators  and  trus- 
tees.— Every  executor,  administrator  or  trustee,  shall  have  full  power 
to  sell  so  much  of  the  property  of  the  decedent  as  will  enable  him  to  pay 
such  tax  in  the  same  manner  as  he  might  be  entitled  by  law  to  do  for 
the  payment  of  the  debts  of  the  testator  or  intestate.  Any  such  ad- 
ministrator, executor  or  trustee  having  hi  charge  or  in  trust  any  legacy 
or  property  for  distribution  subject  to  such  tax  shall  deduct  the  tax 
therefrom;  and  within  thirty  days  therefrom  shall  pay  over  the  same 
to  the  county  treasurer  or  state  comptroller,  as  herein  provided.  If 
such  legacy  or  property  be  not  in  money,  he  shall  collect  the  tax  thereon 
upon  the  appraised  value  thereof  from  the  person  entitled  thereto.  He 
shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  prop- 
erty subject  to  tax  under  this  article  to  any  person  until  he  shall  have 
collected  the  tax  thereon.  If  any  such  legacy  shall  be  charged  upon 
or  payable  out  of  real  property,  the  heir  or  devisee  shall  deduct  such 
tax  therefrom  and  pay  it  to  the  administrator,  executor  or  trustee, 
and  the  tax  shall  remain  a  lien  or  charge  on  such  real  property  until 
paid,  and  the  payment  thereof  shall  be  enforced  by  the  executor, 
administrator  or  trustee  in  the  same  manner  that  payment  of  the 
legacy  might  be  enforced,  or  by  the  district  attorney  under  section 
two  hundred  and  thirty-five  of  this  chapter.  If  any  such  legacy  shall 
be  given  in  money  to  any  such  person  for  a  limited  period,  the  adminis- 
trator, executor  or  trustee  shall  retain  the  tax  upon  the  whole  amount, 
but  if  it  be  not  in  money,  he  shall  make  application  to  the  court  having 
jurisdiction  of  an  accounting  by  him,  to  make  an  apportionment,  if 
the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  lega- 
tees, and  for  such  further  order  relative  thereto  as  the  case  may  require. 

§  3.  Section  two  hundred  and  twenty-five  of  such  chapter,  as 
amended  by  chapter  two  hundred  and  eighty-four  of  the  laws  of  eight- 
een hundred  and  ninety-seven  and  chapter  three  hundred  and  eighty- 
two  of  the  laws  of  nineteen  hundred,  is  hereby  amended  to  read  as 
follows: 

§  225.  Refund  of  tax  erroneously  paid. — If  any  debts  shall  be 
proven  against  the  estate  of  a  decedent  after  the  payment  of  any  legacy 
or  distributive  share  thereof,  from  which  any  such  tax  has  been  deducted 
or  upon  which  it  has  been  paid  by  the  person  entitled  to  such  legacy 
or  distributive  share,  and  such  person  is  required  by  order  of  the  sur- 
rogate having  jurisdiction,  on  notice  to  the  state  comptroller,  to  refund 


460  PRIOR   STATUTES 

the  amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion 
of  the  tax  shall  be  repaid  to  him  by  the  executor,  administrator  or 
trustee,  if  the  tax  has  not  been  paid  to  the  county  treasurer,  or  state 
comptroller,  or  if  such  tax  has  been  paid  to  such  treasurer  or  state 
comptroller,  he  shall  refund  out  of  the  funds  in  his  hands  or  custody 
to  the  credit  of  such  taxes  such  equitable  proportion  of  the  tax,  and 
credit  himself  with  the  same  in  the  account  required  to  be  rendered 
by  him  under  this  article.  If  after  the  payment  of  any  tax  in  pur- 
suance of  an  order  fixing  such  tax,  made  by  the  surrogate  having  juris- 
diction, such  order  be  modified  or  reversed  within  two  years  from  and 
after  the  date  of  entry  of  the  order  fixing  the  tax,  on  due  notice  to  the 
comptroller  of  the  state,  the  state  comptroller  shall,  if  such  tax  was 
paid  in  a  county  in  which  the  office  of  appraiser  is  not  salaried,  by  order, 
direct  and  allow  the  treasurer  of  the  county,  to  refund,  or  if  paid  in 
any  other  county,  he  shall  himself  refund  to  the  executor,  administra- 
tor, trustee,  person  or  persons,  by  whom  such  tax  has  been  paid,  the 
amount  of  any  moneys  paid  or  deposited  on  account  of  such  tax  in 
excess  of  the  amount  of  the  tax  fixed  by  the  order  modified  or  reversed, 
out  of  the  funds  in  his  hands  or  custody,  to  the  credit  of  such  taxes, 
and  to  credit  himself  with  the  same  in  the  account  required  to  be  ren- 
dered by  him  under  this  act;  but  no  application  for  such  refund  shall 
be  made  after  one  year  from  such  reversal  or  modification,  and  the 
comptroller  of  the  state  shall  deduct  from  the  fees  allowed  by  this 
article  to  the  county  treasurer  the  amount  theretofore  allowed  him 
upon  such  overpayment.  Where  it  shall  be  proved  to  the  satisfaction 
of  the  surrogate  who  has  assessed  the  tax  upon  the  transfer  of  property 
under  this  article  that  deductions  for  debts  were  allowed  upon  the  ap- 
praisal, since  proved  to  have  been  erroneously  allowed,  it  shall  be  law- 
ful for  such  surrogate  to  enter  an  order  assessing  the  tax  upon  the 
amount  wrongfully  or  erroneously  deducted. 

§  4.  Sections  two  hundred  and  twenty-eight  and  two  hundred  and 
twenty-nine  of  such  chapter  are  hereby  amended  to  read  as  follows: 

§  228.  Liability  of  certain  corporations  to  tax. — If  a  foreign  execu- 
tor, administrator  or  trustee  shall  assign  or  transfer  any  stock  or  obli- 
gations in  this  state  standing  in  the  name  of  a  decedent,  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treas- 
urer of  the  proper  county  or  the  state  comptroller  on  the  transfer 
thereof.  No  safe  deposit  company,  bank  or  other  institution,  person 
or  persons  holding  securities  or  assets  of  a  decedent,  shall  deliver  or 
transfer  the  same  to  the  executors,  administrators  or  legal  representa- 
tives of  said  decedent,  or  upon  their  order  or  request,  unless  notice 
of  the  time  and  place  of  such  intended  transfer  be  served  upon  the 
state  comptroller  at  least  ten  days  prior  to  the  said  transfer;  nor  shall 
any  such  safe  deposit  company,  bank  or  other  institution,  person  or 
persons  deliver  or  transfer  any  securities  or  assets  of  the  estate  of  a 
non-resident  decedent  without  retaining  a  sufficient  portion  or  amount 


LAWS  OF   1901,   CHAP.    173  461 

thereof  to  pay  any  tax  which  may  thereafter  be  assessed  on  account 
of  the  transfer  of  such  securities  or  assets  under  the  provisions  of  this 
article,  unless  the  state  comptroller  consents  thereto  in  writing.  And 
it  shall  be  lawful  for  the  said  county  treasurer  or  state  comptroller, 
personally,  or  by  representative,  to  examine  said  securities  or  assets 
at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice 
or  to  allow  such  examination,  or  to  retain  a  sufficient  portion  or  amount 
to  pay  such  tax  as  herein  provided,  shall  render  said  safe  deposit  com- 
pany, trust  company,  bank  or  other  institution,  person  or  persons 
liable  to  the  payment  of  the  tax  due  upon  said  securities  or  assets  in 
pursuance  of  the  provisions  of  this  article. 

§  229.  Jurisdiction  of  the  surrogate. — The  surrogate's  court  of 
every  county  of  the  state  having  jurisdiction  to  grant  letters  testa- 
mentary or  of  administration  upon  the  estate  of  a  decedent  whose  prop- 
erty is  chargeable  with  any  tax  under  this  article,  or  to  appoint  a 
trustee  of  such  estate  or  any  part  thereof,  or  to  give  ancillary  letters 
thereon,  shall  have  jurisdiction  to  hear  and  determine  all  questions 
arising  under  the  provisions  of  this  article,  and  to  do  any  act  in  rela- 
tion thereto  authorized  by  law  to  be  done  by  a  surrogate  in  other  mat- 
ters or  proceedings  coming  within  his  jurisdiction;  and  if  two  or  more 
surrogates'  courts  shall  be  entitled  to  exercise  any  such  jurisdiction, 
the  surrogate  first  acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other  surrogate.  Every  petition  for 
ancillary  letters  testamentary  or  ancillary  letters  of  administration 
made  in  pursuance  of  the  provisions  of  article  seven,  title  three,  chap- 
ter eighteen  of  the  code  of  civil  procedure  shall  set  forth  the  name  of 
the  country  treasurer  in  a  county  in  which  the  office  of  appraiser  is 
not  salaried,  and  in  the  other  counties  the  state  comptroller,  as  a  person 
to  be  cited  as  therein  prescribed,  and  a  true  and  correct  statement  of 
all  the  decedent's  property  in  this  state  and  the  value  thereof;  and  upon 
the  presentation  thereof  the  surrogate  shall  issue  a  citation  directed  to 
such  county  treasurer  or  state  comptroller;  and  upon  the  return  of  the 
citation  the  surrogate  shall  determine  the  amount  of  the  tax  which 
may  be  or  become  due  under  the  provisions  of  this  article  and  his 
decree  awarding  the  letters  may  contain  any  provision  for  the  pay- 
ment of  such  tax  or  the  giving  of  security  therefor  which  might  be 
made  by  such  surrogate  if  the  county  treasurer  or  state  comptroller 
were  a  creditor  of  the  decedent. 

§  5.  Section  two  hundred  and  thirty  of  such  chapter,  as  amended 
by  chapter  two  hundred  and  eighty-four,  of  the  laws  of  eighteen  hun- 
dred and  ninety-seven;  chapter  seventy-six,  of  the  laws  of  eighteen 
hundred  and  ninety-nine,  and  chapter  six  hundred  and  fifty-eight,  of 
the  laws  of  nineteen  hundred,  is  hereby  amended  to  read  as  follows: 

§  230.  Appointment  of  appraisers,  stenographers,  et  cetera. — The 
state  comptroller  shall  appoint  and  may  at  pleasure  remove,  not  to 
exceed  five  persons  in  the  county  of  New  York;  two  persons  in  the 


462  PRIOR   STATUTES 

county  of  Kings,  and  one  person  in  the  counties  of  Albany,  Dutchess, 
Erie,  Monroe,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer,  Rich- 
mond, Suffolk  and  Westchester,  to  act  as  appraisers  therein.  The 
appraisers  so  appointed  shall  receive  an  annual  salary  to  be  fixed  by 
the  state  comptroller,  together  with  their  actual  and  necessary  travel- 
ing expenses  and  witness  fees,  as  hereinafter  provided,  payable  monthly 
by  the  state  comptroller  out  of  any  funds  in  his  hands  or  custody  on 
account  of  transfer  tax.  The  salaries  of  each  of  the  appraisers  so  ap- 
pointed shall  not  exceed  the  following  amounts:  In  New  York  county, 
four  thousand  dollars;  in  Kings  county,  three  thousand  dollars;  in 
Erie  county,  three  thousand  dollars;  in  Westchester  county  eighteen 
hundred  dollars;  in  Albany,  Queens,  Monroe  and  Onondaga  counties 
one  thousand  five  hundred  dollars;  in  Dutchess,  Oneida,  Suffolk, 
Orange  and  Rensselaer  counties  one  thousand  dollars,  and  in  Rich- 
mond county  five  hundred  dollars.  Each  of  the  said  appraisers  shall 
file  with  the  state  comptroller  his  oath  of  office  and  his  official  bond  in 
the  penal  sum  of  not  less  than  one  thousand  nor  more  than  twenty 
thousand  dollars,  in  the  discretion  of  the  state  comptroller,  conditioned 
for  the  faithful  performance  of  his  duties  as  such  appraiser,  which  bond 
shall  be  approved  by  the  attorney-general  and  the  state  comptroller. 
The  state  comptroller  shall  retain  out  of  any  funds  in  his  hands  on 
account  of  said  tax  the  following  amounts:  1.  A  sum  sufficient  to  pro- 
vide the  appraisers  of  New  York  county  with  two  stenographers,  and 
of  Kings  county  with  one  stenographer,  appointed  by  the  state  comp- 
troller, whose  salary  shall  not  exceed  fifteen  hundred  dollars  a  year 
each.  2.  A  sum  to  be  used  in  defraying  the  expenses  for  office  rent, 
stationery,  postage,  process  serving,  et  cetera,  necessarily  incurred  in 
the  appraisal  of  estates,  not  exceeding  three  thousand  dollars  a  year  in 
New  York  county,  and  one  thousand  dollars  a  year  in  Kings  county. 
In  each  county  in  which  the  office  of  appraiser  is  not  salaried  the 
county  treasurer  shall  act  as  appraiser.  The  surrogate,  either  upon 
his  own  motion,  or  upon  the  application  of  any  interested  party,  shall 
by  order  direct  the  county  treasurer  in  a  county  in  which  the  office  of 
appraiser  is  not  salaried,  and  in  any  other  county  the  person  or  one  of 
such  persons  so  designated  as  appraisers  to  fix  the  fair  market  value 
of  property  of  persons  whose  estates  shall  be  subject  to  the  payment 
of  any  tax  imposed  by  this  article.  Whenever  a  transfer  of  property 
is  made,  upon  which  there  is,  or  in  any  contingency  there  may  be,  a 
tax  imposed,  such  property  shall  be  appraised  at  its  clear  market  value 
immediately  upon  such  transfer,  or  as  soon  thereafter  as  practicable. 
The  value  of  every  future  or  limited  estate,  income,  interest  or  annuity 
dependent  upon  any  life  or  lives  in  being,  shall  be  determined  by  the 
rule,  method  and  standard  of  mortality  and  value  employed  by  the 
superintendent  of  insurance  in  ascertaining  the  value  of  policies  of 
life  insurance  and  annuities  for  the  determination  of  liabilities  of  life 
insurance  companies,  except  that  the  rate  of  interest  for  making  such 


LAWS   OF    1901,    CHAP.    173  463 

computation  shall  be  five  per  centum  per  annum.  In  estimating  the 
value  of  any  estate  or  interest  in  property,  to  the  beneficial  enjoyment 
or  possession  whereof  there  are  persons  or  corporations  presently  en- 
titled thereto,  no  allowance  shall  be  made  in  respect  of  any  contingent 
incumbrance  thereon,  nor  in  respect  of  any  contingency  upon  the 
happening  of  which  the  estate  or  property  or  some  part  thereof  or 
interest  therein  might  be  abridged,  defeated  or  diminished;  provided, 
however,  that  in  the  event  of  such  incumbrance  taking  effect  as  an 
actual  burden  upon  the  interest  of  the  beneficiary,  or  in  the  event 
of  the  abridgment,  defeat  or  diminution  of  said  estate  or  property 
or  interest  therein  as  aforesaid,  a  return  shall  be  made  to  the  person 
properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  in 
respect  of  the  amount  or  value  of  the  incumbrance  when  taking  effect, 
or  so  much  as  will  reduce  the  same  to  the  amount  which  would  have 
been  assessed  in  respect  of  the  actual  duration  or  extent  of  the  estate 
or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner 
provided  by  section  two  hundred  and  twenty-five  of  this  article.  Where 
any  property  shall,  after  the  passage  of  this  act,  be  transferred  subject 
to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  per- 
son, or  at  any  period  ascertainable  only  by  reference  to  death,  the 
increase  of  benefit  accruing  to  any  person  or  corporation  upon  the  ex- 
tinction or  determination  of  such  charge,  estate  or  interest  shall  be 
deemed  a  transfer  of  property  taxable  under  the  provisions  of  this  act 
in  the  same  manner  as  though  the  person  or  corporation  beneficially 
entitled  thereto  had  then  acquired  such  increase  or  benefit  from  the 
person  from  whom  the  title  to  their  respective  estates  or  interests  is 
derived.  When  property  is  transferred  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  are  dependent  upon  con- 
tingencies or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  trans- 
fer at  the  highest  rate  which,  on  the  happening  of  any  of  the  said  con- 
tingencies or  conditions,  would  be  possible  under  the  provisions  of 
this  article,  and  such  tax  so  imposed  shall  be  due  and  payable  forth- 
with by  the  executors  or  trustees  out  of  the  property  transferred ;  pro- 
vided, however,  that  on  the  happening  of  any  contingency  whereby 
the  said  property,  or  any  part  thereof,  is  transferred  to  a  person  or 
corporation  exempt  from  taxation  under  the  provisions  of  this  article, 
or  to  any  person  taxable  at  a  rate  less  than  the  rate  imposed  and  paid, 
such  person  or  corporation  shall  be  entitled  to  a  return  of  so  much  of 
the  tax  imposed  and  paid  as  is  the  difference  between  the  amount  paid 
and  the  amount  which  said  person  or  corporation  should  pay  under 
the  provisions  of  this  article,  with  legal  interest  thereon  from  the  time 
of  payment.  Such  return  of  overpayment  shall  be  made  in  the  manner 
provided  by  section  two  hundred  and  twenty-five  of  this  article.  Es- 
tates in  expectancy  which  are  contingent  or  defeasible  and  in  which 
proceedings  for  the  determination  of  the  tax  have  not  been  taken  or 


464  PRIOR   STATUTES 

\ 

where  the  taxation  thereof  has  been  held  in  abeyance,  shall  be  ap- 
praised at  their  full,  undiminished  value  when  the  persons  entitled 
thereto  shall  come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation  theretofore 
made  of  the  particular  estates  for  purposes  of  taxation,  upon  which 
said  estates  hi  expectancy  may  have  been  limited.  Where  an  estate 
for  life  or  for  years  can  be  divested  by  the  act  or  omission  of  the  legatee 
or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such  di- 
vesting. All  estates  upon  remainder  or  reversion,  which  vested  prior 
to  May  first  eighteen  hundred  and  ninety-two,  but  which  will  not  come 
into  actual  possession  or  enjoyment  of  the  person  or  corporation  bene- 
ficially interested  therein  until  after  the  passage  of  this  act  shall  be 
appraised  and  taxed  as  soon  as  tRe  person  or  corporation  beneficially 
interested  therein  shall  be  entitled  to  the  actual  possession  or  enjoy- 
ment thereof. 

§  6.  Such  chapter  is  hereby  amended  by  inserting  therein  a  new 
section  to  be  known  as  section  two  hundred  and  thirty-a,  and  to  read 
as  follows: 

§  230a.  Composition  of  transfer  tax  upon  certain  estates. — The 
county  treasurer  of  any  county  in  which  the  office  of  appraiser  is  not 
salaried,  by  and  with  the  consent  of  the  comptroller  of  the  state  of 
New  York,  expressed  in  writing,  and  the  state  comptroller  in  any  other 
county,  by  and  with  the  consent  of  the  attorney-general  expressed  hi 
writing,  is  hereby  empowered  and  authorized  in  a  county  in  which 
they  receive  payments  on  account  of  transfer  tax,  to  enter  into  an 
agreement  with  the  trustees  of  any  estate  therein  situate,  in  which 
remainders  or  expectant  estates  have  been  of  such  a  nature,  or  so  dis- 
posed and  circumstanced,  that  the"  taxes  therein  were  held  not  presently 
payable,  or  where  the  interests  of  the  legatees  or  devisees  were  not 
ascertainable  under  the  provisions  of  chapter  four  hundred  and  eighty- 
three  of  the  laws  of  eighteen  hundred  and  eighty-five;  chapter  three 
hundred  and  ninety-nine  of  the  laws  of  eighteen  hundred  and  ninety- 
two,  or  chapter  nine  hundred  and  eight  of  the  laws  of  eighteen  hundred 
and  ninety-six,  and  the  several  acts  amendatory  thereof  and  supple- 
mental thereto;  and  to  compound  such  taxes  upon  such  terms  as  may 
be  deemed  equitable  and  expedient;  and  to  grant  discharge  to  said 
trustees  upon  the  payment  of  the  taxes  provided  for  in  such  composi- 
tion; provided,  however,  that  no  such  composition  shall  be  conclusive 
in  favor  of  said  trustees  as  against  the  interests  of  such  cestuis  que 
trust,  as  may  possess  either  present  rights  of  enjoyment,  or  fixed,  ab- 
solute or  indefeasible  rights  of  future  enjoyment,  or  of  such  as  would 
possess  such  rights  in  the  event  of  the  immediate  termination  of  par- 
ticular estates,  unless  they  consent  thereto,  either  personally,  when 
competent,  or  by  guardian  or  committee.  Composition  or  settlement 
made  or  effected  under  the  provisions  of  this  section  shall  be  executed 
in  triplicate,  and  one  copy  shall  be  filed  in  the  office  of  the  state  comp- 


LAWS  OF   1901,   CHAP.    173  465 

trailer,  one  copy  in  the  office  of  the  surrogate  of  the  county  in  which 
the  tax  was  paid,  and  one  copy  to  be  delivered  to  the  executors,  ad- 
ministrators or  trustees  who  shall  be  parties  thereto. 

§  7.  Section  two  hundred  and  thirty-one  of  such  chapter,  as  amended 
by  chapter  six  hundred  and  fifty-eight  of  the  laws  of  nineteen  hundred, 
is  hereby  amended  to  read  as  follows: 

§  231.  Proceedings  by  appraiser. — Every  such  appraiser  shall  forth- 
with give  notice  by  mail  to  all  persons  known  to  have  a  claim  or  in- 
terest in  the  property  to  be  appraised,  including  the  state  comptroller, 
and  to  such  persons  as  the  surrogate  may  by  order  direct,  of  the  time 
and  place  when  he  will  appraise  such  property.  He  shall,  at  such 
time  and  place,  appraise  the  same  at  its  fair  market  value  as  herein 
prescribed,  and  for  that  purpose  the  said  appraiser  is  authorized  to 
issue  subpoenas  and  to  compel  the  attendance  of  witnesses  before  him 
and  to  take  the  evidence  of  such  witnesses  under  oath  concerning  such 
property  and  the  value  thereof;  and  he  shall  make  report  thereof  and 
of  such  value  in  writing,  to  the  said  surrogate,  together  with  the  deposi- 
tions of  the  witnesses  examined,  and  such  other  facts  in  relation  thereto 
and  to  said  matter  as  the  surrogate  may  order  or  require.  Every  ap- 
praiser, except  in  the  counties  hi  which  the  office  of  appraiser  is  salaried, 
for  which  provision  is  hereinbefore  made,  shall  be  paid  on  the  certificate 
of  the  surrogate,  subject  to  review  and  audit  by  the  state  comptroller, 
his  actual  and  necessary  traveling  expenses  and  the  fees  paid  such 
witnesses,  which  fees  shall  be  the  same  as  those  now  paid  to  witnesses 
subpoenaed  to  attend  hi  courts  of  record,  out  of  any  funds  he  may 
have  hi  his  hands  as  county  treasurer  on  account  of  any  tax  imposed 
under  the  provisions  of  this  article.  Appraisers  appointed  under  this 
article  in  proceedings  pending  at  the  time  the  amendment  to  this  sec- 
tion takes  effect  shall  complete  the  appraisals  therein  and  file  their 
reports  as  herein  provided,  and  shall  be  entitled  to  the  compensation 
authorized  by  law  at  the  time  of  their  appointment,  to  be  paid  by  the 
state  comptroller  in  counties  in  which  the  office  of  appraiser  is  salaried, 
and  hi  other  counties  by  the  county  treasurer,  out  of  any  moneys  in 
his  hands  on  account  of  this  tax. 

§  8.  Section  two  hundred  and  thirty-two  of  such  chapter,  as  amended 
by  chapter  two  hundred  and  eighty-four  of  the  laws  of  eighteen  hun- 
dred and  ninety-seven,  and  chapter  six  hundred  and  seventy-two  of 
the  laws  of  eighteen  hundred  and  ninety-nine,  is  hereby  amended  to 
read  as  follows: 

§  232.  Determination  of  surrogate. — The  report  of  the  appraiser 
shall  be  made  in  duplicate,  one  of  which  duplicates  shall  be  filed  in 
the  office  of  the  surrogate  and  the  other  in  the  office  of  the  state  comp- 
troller. From  such  report  and  other  proof  relating  to  any  such  estate 
before  the  surrogate,  the  surrogate  shall  forthwith,  as  of  course,  deter- 
mine the  cash  value  of  all  estates  and  the  amount  of  tax  to  which  the 
same  are  liable;  or  the  surrogate  may  so  determine  the  cash  value  of 

'    30 


466  PRIOR   STATUTES 

all  such  estates  and  the  ahiount  of  tax  to  which  the  same  are  liable, 
without  appointing  an  appraiser.  The  superintendent  of  insurance 
shall,  on  the  application  of  any  surrogate,  determine  the  value  of  any 
such  future  or  contingent  estates,  income  or  interest  therein  limited, 
contingent,  dependent  or  determinable  upon  the  life  or  lives  of  persons 
in  being,  upon  the  facts  contained  in  any  such  appraiser's  report,  and 
certify  the  same  to  the  surrogate,  and  his  certificate  shall  be  conclusive 
evidence  that  the  method  of  computation  adopted  therein  is  correct. 
The  comptroller  of  the  state  of  New  York  or  any  person  dissatisfied 
with  the  appraisement  or  assessment  and  determination  of  tax,  may 
appeal  therefrom  to  the  surrogate,  within  sixty  days  from  the  fixing, 
assessing  and  determination  of  tax  by  the  surrogate  as  herein  provided, 
upon  filing  in  the  office  of  the  surrogate  a  written  notice  of  appeal, 
which  shall  state  the  grounds  upon  which  the  appeal  is  taken.  The 
surrogate  shall  immediately  give  notice,  upon  the  determination  by 
him  as  to  the  value  of  any  estate  which  is  taxable  under  this  article, 
and  of  the  tax  to  which  it  is  liable,  to  all  parties  known  to  be  interested 
therein,  including  the  state  comptroller.  If,  however,  it  appear  at 
this  stage  of  the  proceedings  that  any  of  such  parties  known  to  be 
interested  in  the  estate  is  an  infant  or  an  incompetent,  the  surrogate 
shall,  if  the  interest  of  such  infant  or  incompetent  is  presently  involved 
and  is  adverse  to  that  of  any  of  the  other  persons  interested  therein, 
appoint  a  special  guardian  of  such  infant;  but  nothing  in  this  provision 
shall  affect  the  right  of  an  infant  over  fourteen  years  of  age  or  of  any 
one  on  behalf  of  an  infant  under  fourteen  years  of  age  to  nominate  and 
apply  for  the  appointment  of  a  special  guardian  for  such  infant  at 
any  stage  of  the  proceedings.  Within  two  years  after  the  entry  of  an 
order  or  decree  of  a  surrogate  determining  the  value  of  an  estate  and 
assessing  the  tax  thereon,  the  comptroller  of  the  state  may,  if  he  be- 
lieves that  such  appraisal,  assessment  or  determination  has  been  fraudu- 
lently, collusively,  or  erroneously  made,  make  application  to  a  justice 
of  the  supreme  court  of  the  judicial  district  in  which  the  former  owner 
of  such  estate  resided,  for  a  reappraisal  thereof.  The  justice  to  whom 
such  application  is  made  may  thereupon  appoint  a  competent  person 
to  reappraise  such  estate.  Such  appraiser  shall  possess  the  powers, 
be  subject  to  the  duties  and  receive  compensation  at  the  rate  of  five 
dollars  per  day  for  every  day  actually  and  necessarily  employed  in  such 
appraisal.  Such  compensation  shall  be  payable  by  the  county  treas- 
urer or  state  comptroller,  out  of  any  funds  he  may  have  on  account 
of  any  tax  imposed  under  the  provisions  of  this  article,  upon  the  cer- 
tificate of  the  justice  appointing  him.  The  report  of  such  appraiser 
shall  be  filed  with  the  justice  by  whom  he  was  appointed,  and  there- 
after the  same  proceedings  shall  be  taken  and  had  by  and  before  such 
justice  as  are  herein  provided  to  be  taken  and  had  by  and  before  the 
surrogate.  The  determination  and  assessment  of  such  justice  shall 
supersede  the  determination  and  assessment  of  the  surrogate,  and 


LAWS   OF    1901,    CHAP.    173  467 

shall  be  filed  by  such  justice  in  the  office  of  the  state  comptroller,  and 
a  certified  copy  thereof  transmitted  to  the  surrogate's  court  of  the 
proper  county. 

§  9.  Section  two  hundred  and  thirty-three  of  such  chapter,  as 
amended  by  chapter  two  hundred  and  eighty-nine,  of  the  laws  of  eight- 
een hundred  and  ninety-eight,  is  hereby  amended  to  read  as  follows: 

§  233.  Surrogates'  assistants  in  New  York  county. — The  surro- 
gates of  the  county  of  New  York  may  jointly  appoint  and  at  pleasure 
remove  assistants  as  follows: 

1.  In  New  York  county,  a  transfer  tax  assistant,  at  an  annual  sal- 
ary of  four  thousand  dollars;  a  transfer  tax  clerk,  at  an  annual  salary 
of  two  thousand  four  hundred  dollars;  an  assistant  clerk,  at  an  annual 
salary  of  eighteen  hundred  dollars;  a  recording  clerk,  at  a  salary  of 
thirteen  hundred  dollars;  and  shall  be  entitled  to  not  more  than  five 
hundred  dollars  a  year  for  expenses  necessarily  incurred  in  the  assess- 
ment and  collection  of  taxes  under  this  article.  Such  salaries  and  ex- 
penses shall  be  payable  monthly  by  the  state  comptroller  on  the  cer- 
tificate and  requisition  of  the  surrogates,  accompanied  by  proper 
vouchers,  out  of  any  funds  in  his  hands  on  account  of  taxes  collected 
under  this  article. 

§  10.  Section  two  hundred  and  thirty-four  of  such  chapter,  as 
amended  by  chapter  three  hundred  and  eighty-nine  of  the  laws  of 
eighteen  hundred  and  ninety-nine,  is  hereby  amended  to  read  as 
follows: 

§  234.  Surrogates'  assistants  in  Kings  and  certain  other  coun- 
ties.— The  surrogates  of  the  counties  mentioned  in  this  section  may 
appoint  and  at  pleasure  remove  assistants  as  follows: 

1.  In  the  county  of  Kings,  a  transfer  tax  assistant,  at  an  annual 
salary  of  four  thousand  dollars,  and  a  transfer  tax  clerk,  at  an  annual 
salary  of  two  thousand  dollars;  and  shall  be  entitled  to  not  more  than 
five  hundred  dollars  a  year,  for  expenses  necessarily  incurred  in  the 
assessment  and  collection  of  taxes  under  this  article. 

2.  In  the  county  of  Westchester,  a  transfer  tax  assistant,  at  an  an- 
nual salary  to  be  fixed  by  the  surrogate,  of  not  more  than  two  thousand 
dollars. 

3.  In  the  county  of  Suffolk,  a  transfer  tax  clerk,  at  an  annual  salary 
of  seven  hundred  and  twenty  dollars. 

4.  In  the  county  of  Oneida,  not  more  than  two  transfer  tax  clerks, 
at  an  annual  compensation  to  be  fixed  by  the  surrogate,  of  not  more 
in  the  aggregate  than  twelve  hundred  dollars. 

5.  In  the  county  of  Ulster,  a  transfer  tax  clerk,  at  an  annual  salary, 
to  be  fixed  by  the  surrogate,  of  not  more  than  seven  hundred  and 
twenty  dollars. 

6.  In  the  county  of  Onondaga,  a  transfer  tax  clerk,  at  an  annual 
salary,  to  be  fixed  by  the  surrogate,  of  not  more  than  twelve  hundred 
dollars. 


468  PRIOR  STATUTES 

7.  In  the  county  of  Monroe,  two  transfer  tax  clerks,  at  an  annual 
salary  of  seven  hundred  and  fifty  dollars  each;  and  shall  be  entitled 
to  not  more  than  two  hundred  dollars  a  year  for  expenses  necessarily 
incurred  hi  the  assessment  and  collection  of  taxes  under  this  article. 

8.  In  the  county  of  Erie,  a  transfer  tax  clerk,  at  an  annual  salary 
of  eighteen  hundred  dollars. 

9.  In  the  county  of  Albany,  a  transfer  tax  clerk  at  an  annual  salary 
to  be  fixed  by  the  surrogate,  of  not  more  than  one  thousand  dollars. 

Such  salaries  and  expenses  shall  be  payable  monthly  by  the  state 
comptroller  on  the  certificate  and  requisition  of  the  surrogate  of  each 
such  county,  accompanied  by  proper  vouchers,  out  of  any  funds  in 
his  hands  on  account  of  taxes  collected  under  this  article. 

§  11.  Sections  two  hundred  and  thirty-five  and  two  hundred  and 
thirty-six  of  such  chapter  are  hereby  amended  to  read  as  follows: 

§  235.  Proceedings  for  the  collection  of  taxes. — If  the  county  treas- 
urer or  state  comptroller  shall  have  reason  to  believe  that  any  tax  is 
due  and  unpaid  in  a  county  hi  which  he  is  authorized  to  receive  the  tax 
under  this  article,  after  the  refusal  or  neglect  of  the  persons  liable 
therefor  to  pay  the  same,  he  shall  notify  the  district  attorney  of  the 
county,  in  writing,  of  such  failure  or  neglect,  and  such  district  attorney, 
if  he  have  probable  cause  to  believe  that  such  tax  is  due  and  unpaid, 
shall  apply  to  the  surrogate's  court  for  a  citation,  citing  the  persons 
liable  to  pay  such  tax  to  appear  before  the  court  on  the  day  specified, 
not  more  than  three  months  after  the  date  of  such  citation,  and  show 
cause  why  the  tax  should  not  be  paid.  The  surrogate,  upon  such  ap- 
plication, and  whenever  it  shall  appear  to  him  that  any  such  tax  ac- 
cruing under  this  article  has  not  been  paid  as  required  by  law,  shall 
issue  such  citation  and  the  service  of  such  citation,  and  the  time, 
manner  and  proof  thereof,  and  the  hearing  and  determination  thereon 
and  the  enforcement  of  the  determination  or  order  made  by  the  surro- 
gate shall  conform  to  the  provisions  of  the  code  of  civil  procedure  for 
the  service  of  citations  out  of  the  surrogate's  court,  and  the  hearing 
and  determination  thereon  and  its  enforcement  so  far  as  the  same 
may  be  applicable.  The  surrogate  or  his  clerk  shall,  upon  request  of 
the  district  attorney,  county  treasurer,  or  the  comptroller  of  the  state, 
furnish,  without  fee,  one  or  more  transcripts  of  such  decree,  which  shall 
be  docketed  and  filed  by  the  county  clerk  of  any  county  of  the  state 
without  fee,  in  the  same  manner  and  with  the  same  effect  as  provided 
by  law  for  filing  and  docketing  transcripts  of  decrees  of  the  surrogate's 
court.  The  costs  awarded  by  any  such  decree  after  the  collection  and 
payment  of  the  tax  to  the  county  treasurer  or  state  comptroller  may 
be  retained  by  the  district  attorney  for  his  own  use.  Such  costs  shall 
be  fixed  by  the  surrogate  in  his  discretion,  but  shall  not  exceed  in  any 
case  where  there  has  not  been  a  contest,  the  sum  of  one  hundred  dollars, 
or  where  there  has  been  a  contest  the  sum  of  two  hundred  and  fifty 
dollars.  Whenever  the  surrogate  shall  certify  that  there  was  probable 


LAWS  OF    1901,   CHAP.    173  469 

cause  for  issuing  a  citation  and  taking  the  proceedings  specified  in  this 
section,  the  state  treasurer  shall  pay  or  allow  to  the  county  treasurer 
or  the  state  comptroller  all  expenses  incurred  for  the  service  of  cita- 
tions and  other  lawful  disbursements  not  otherwise  paid.  In  proceed- 
ings to  which  any  county  treasurer  or  the  state  comptroller  is  cited  as 
a  party  under  sections  two  hundred  and  thirty  and  two  hundred  and 
thirty-one  of  this  article,  the  state  comptroller  is  authorized  to  designate 
and  retain  counsel  to  represent  such  county  treasurer  or  state  comp- 
troller therein,  and  to  direct  such  county  treasurer  in  a  county  in  which 
the  office  of  appraiser  is  not  salaried  to  pay  the  expenses  thereby  in- 
curred out  of  the  funds  which  may  be  in  his  hands  on  account  of  this 
tax,  and  in  any  other  county  the  state  comptroller  shall  pay  such  ex- 
penses out  of  any  funds  which  may  be  in  his  hands  on  account  of  this 
tax;  provided,  however,  that  in  the  collection  of  taxes  upon  estates  of 
non-resident  decedents,  which  estates  have  been  concealed  or  the 
taxes  thereon  evaded,  the  state  comptroller  shall  not  allow  for  legal 
services  up  to  and  including  the  entry  of  the  order  of  the  surrogate 
fixing  the  tax  a  sum  exceeding  ten  per  centum  of  the  taxes  and  penal- 
ties collected.  And  the  comptroller  of  the  state  is  hereby  authorized, 
with  the  approval  of  the  attorney-general,  and  a  justice  of  the  supreme 
court  of  the  judicial  district  in  which  the  former  owner  resided,  to 
compromise  and  settle  the  amount  of  such  tax  in  any  case  where  con- 
troversies have  arisen  or  may  hereafter  arise  as  to  the  relationship  of 
the  beneficiaries  to  the  former  owner  thereof. 

§  236.  Receipt  from  the  county  treasurer  and  comptroller.— Any 
person  shall  upon  the  payment  of  the  sum  of  fifty  cents  be  entitled 
to  a  receipt  from  the  county  treasurer  of  any  county  or  the  state  comp- 
troller, or  at  his  option  to  a  copy  of  a  receipt  that  may  have  been  given 
by  such  treasurer  or  state  comptroller  for  the  payment  of  any  tax  under 
this  article,  under  the  official  seal  of  such  treasurer  or  comptroller, 
which  receipt  shall  designate  upon  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  such  tax  shall  have  been  paid, 
by  whom  paid,  and  whether  in  full  of  such  tax.  Such  receipt  may  be 
recorded  in  the  clerk's  office  of  the  county  in  which  such  property  is 
situate,  in  a  book  to  be  kept  by  him  for  that  purpose,  which  shall  be 
labeled  "transfer  tax." 

§  12.  Section  two  hundred  and  thirty-seven  of  such  chapter,  as 
amended  by  chapter  two  hundred  and  eighty-nine  of  the  laws  of  eight- 
een hundred  and  ninety-eight  is  hereby  amended  to  read  as  follows: 

§  237.  Fees  of  county  treasurer. — The  treasurer  of  each  county  in 
which  the  office  of  appraiser  is  not  salaried  shah1  be  allowed  to  retain 
on  all  taxes  paid  and  accounted  for  by  him  each  year  under  this  article, 
five  per  centum  on  the  first  fifty  thousand  dollars,  three  per  centum  on 
the  next  fifty  thousand  dollars,  and  one  per  centum  on  all  additional 
sums.  Such  fees  shall  be  in  addition  to  the  salaries  and  fees  now  al- 
lowed by  law  to  such  officers. 


470  PRIOR   STATUTES 

§  13.  Sections  two  hundred  and  thirty-nine  and  two  hundred  and 
forty  of  such  chapte'r  are  hereby  amended  to  read  as  follows: 

§  239.  Reports  of  surrogate  and  county  clerk.— Each  surrogate 
shall,  on  January,  April,  July  and  October  first  of  each  year,  make  a 
report  in  duplicate,  upon  the  forms  furnished  by  the  comptroller  con- 
taining all  the  data  and  matters  required  to  be  entered  in  such  book, 
one  of  which  shall  be  immediately  delivered  to  the  county  treasurer 
and  the  other  transmitted  to  the  state  comptroller.  The  county  clerk 
of  each  county,  except  in  the  counties  where  the  registers  perform  the 
duties  of  the  county  clerk  with  respect  to  the  recording  of  deeds,  and 
when  in  such  counties  the  registers,  shall,  at  the  same  times,  make 
reports  in  duplicate,  containing  a  statement  of  any  deed  or  other  con- 
veyance filed  or  recorded  in  his  office,  of  any  property,  which  appears 
to  have  been  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  or  vendor,  with  the  name  and  place 
of  residence  of  such  grantor  or  vendor,  the  name  and  place  of  residence 
of  the  grantee  or  vendee,  and  a  description  of  the  property  transferred, 
one  of  which  duplicates  shall  be  immediately  delivered  to  the  county 
treasurer  or  comptroller  and  the  other  transmitted  to  the  state  comp- 
troller. In  a  county  in  which  the  office  of  appraiser  is  salaried  but 
one  copy  of  each  such  report  need  be  made,  which  shall  be  transmitted 
to  the  state  comptroller  as  herein  required. 

§  240.  Reports  of  county  treasurer. — Each  county  treasurer  in  a 
county  in  which  the  office  of  appraiser  is  not  salaried  shall  make  a  re- 
port, under  oath,  to  the  state  comptroller,  on  January,  April,  July  and 
October  first  of  each  year,  of  all  taxes  received  by  him  under  this  ar- 
ticle, stating  for  what  estate  and  by  whom  and  when  paid.  The  form 
of  such  report  may  be  prescribed  by  the  state  comptroller.  He  shall, 
at  the  same  time,  pay  the  state  treasurer  all  taxes  received  by  him 
under  this  article  and  not  previously  paid  into  the  state  treasury,  and 
for  all  such  taxes  collected  by  him  and  not  paid  into  the  state  treasury 
within  thirty  days  from  the  times  herein  required,  he  shall  pay  in- 
terest at  the  rate  of  ten  per  centum  per  annum. 

§  14.  Such  chapter  is  hereby  amended  by  inserting  therein  a  new 
section  to  be  known  as  section  two  hundred  and  forty-a,  and  to  read 
as  follows: 

§  240a.  Report  of  state  comptroller;  payment  of  taxes. — The  state 
comptroller  shall  deposit  all  taxes  collected  by  him  under  this  article 
in  a  responsible  bank,  banking  house  or  trust  company  hi  the  city  of 
Albany,  as,  in  the  opinion  of  the  comptroller  are  secure,  and  pay  the 
highest  rate  of  interest  to  the  state  for  such  deposit,  to  the  credit  of 
the  state  comptroller  on  account  of  the  transfer  tax.  And  every  such 
bank,  banking  house  or  trust  company  shall  execute  and  file  in  his 
office  an  undertaking  to  the  state,  in  the  sum,  and  with  such  sureties, 
as  are  required  and  approved  by  the  comptroller,  for  the  safe  keeping 
and  prompt  payment  on  legal  demand  therefor  of  all  such  moneys 


LAWS   OF   1901,   CHAP.    173  471 

held  by  or  on  deposit  in  such  bank,  banking-house  or  trust  company, 
with  interest  thereon  on  daily  balances  at  such  rate  as  the  comptroller 
may  fix.  Every  such  undertaking  shall  have  endorsed  thereon,  or 
annexed  thereto,  the  approval  of  the  attorney  general  as  to  its  form. 
The  state  comptroller  shall  on  the  first  day  of  each  month  make  a  veri- 
fied return  to  the  state  treasurer  of  all  taxes  received  by  him  under 
this  article,  stating  for  what  estate,  and  by  whom  and  when  paid;  and 
shall  credit  himself  with  all  expenditures  made  since  his  last  previous 
return  on  account  of  such  taxes,  for  salary,  refunds,  or  other  purpose 
lawfully  chargeable  thereto.  He  shall  at  the  same  tune  pay  to  the 
state  treasurer  the  balance  of  such  taxes  remaining  in  his  hands  at  the 
close  of  business  on  the  last  day  of  the  previous  month,  as  appears 
from  such  returns. 

§  15.  Section  two  hundred  and  forty-one  of  such  chapter  is  hereby 
amended  to  read  as  follows: 

§  241.  Application  of  taxes. — All  taxes  levied  and  collected  under 
this  article  when  paid  into  the  treasury  of  the  state  shall  be  applicable 
to  the  expenses  of  the  state  government  and  to  such  other  purposes 
as  the  legislature  shall  by  law  direct. 

§  16.  Section  two  hundred  and  forty-two  of  such  chapter,  as  amended 
by  chapter  eighty-eight,  laws  of  eighteen  hundred  and  ninety-eight, 
is  hereby  amended  to  read  as  follows: 

§242.  Definitions. — The  words  "estate "and  "property,"  as  used 
in  this  article,  shall  be  taken  to  mean  the  property  or  interest  therein 
of  the  testator,  intestate,  grantor,  bargainer  or  vendor,  passing  or 
transferred  to  those  not  herein  specifically  exempted  from  the  provi- 
sions of  this  article,  and  not  as  the  property  or  interest  therein  passing 
or  transferred  to  individual  legatees,  devisees,  heirs,  next  of  kin,  gran- 
tees, donees  or  vendees,  and  shall  include  all  property  or  interest 
therein,  whether  situated  within  or  without  this  state.  The  word 
"transfer,"  as  used  in  this  article,  shall  be  taken  to  include  the  passing 
of  property  or  any  interest  therein  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bar- 
gain, sale  or  gift,  hi  the  manner  herein  prescribed.  The  words  "  county 
treasurer,"  "comptroller,"  and  "district  attorney,"  as  used  in  this 
article,  shall  be  taken  to  mean  the  treasurer,  state  comptroller  or  the 
district  attorney  of  the  county  of  the  surrogate  having  jurisdiction 
as  provided  hi  section  two  hundred  and  twenty-nine  of  this  article. 

§  17.  Chapter  eight  hundred  and  sixty-one  of  the  laws  of  eighteen 
hundred  and  ninety-five;  chapters  nine  hundred  and  fifty-two  and 
nine  hundred  and  fifty-three  of  the  laws  of  eighteen  hundred  and  ninety- 
six,  chapter  three  hundred  and  seventy-five  of  the  laws  of  eighteen 
hundred  and  ninety-seven;  and  chapters  two  hundred  and  sixty-nine, 
two  hundred  and  seventy  and  four  hundred  and  six  of  the  laws  of  eight- 
een hundred  and  ninety-nine,  and  chapter  three  hundred  and  seventy- 
Dine  of  the  laws  of  nineteen  hundred,  are  hereby  repealed. 


472  PRIOR   STATUTES 

Amendment  by  Laws  of  1902,  Chap.  496, 

In  effect  April  30,  1902,  amended  section  230,  to  wit: 

Section  1.  Section  two  hundred  and  thirty  of  chapter  nine  hundred 
and  eight  of  the  laws  of  eighteen  hundred  and  ninety-six,  as  amended 
by  chapter  two  hundred  and  eighty-four  of  the  laws  of  eighteen  hundred 
and  ninety-seven;  chapter  seventy-six  of  the  laws  of  eighteen  hundred 
and  ninety-nine;  chapter  six  hundred  and  fifty-eight  of  the  laws  of 
nineteen  hundred,  and  chapters  one  hundred  and  seventy-three  and 
four  hundred  and  ninety-three  of  the  laws  of  nineteen  hundred  and 
one,  is  hereby  amended  to  read  as  follows: 

§  230.  Appointment  of  appraisers,  stenographers,  et  cetera. — The 
state  comptroller  shall  appoint  and  may  at  pleasure  remove,  not  to 
exceed  five  persons  in  the  county  of  New  York;  two  persons  in  the 
county  of  Kings,  and  one  person  in  the  counties  of  Albany,  Dutchess, 
Erie,  Monroe,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer,  Rich- 
mond, Suffolk  and  Westchester,  to  act  as  appraisers  therein.  The  ap- 
praisers so  appointed  shall  receive  an  annual  salary  to  be  fixed  by  the 
state  comptroller,  together  with  their  actual  and  necessary  traveling 
expenses  and  witness  fees,  as  hereinafter  provided,  payable  monthly 
by  the  state  comptroller  out  of  any  funds  in  his  hands  or  custody  on 
account  of  transfer  tax.  The  salaries  of  each  of  the  appraisers  so  ap- 
pointed shall  not  exceed  the  following  amounts:  In  New  York  county, 
four  thousand  dollars;  in  Kings  county,  three  thousand  dollars;  in 
Erie  county,  three  thousand  dollars;  in  Westchester  county,  twenty- 
five  hundred  dollars;  in  Albany,  Queens,  Monroe  and  Onondaga 
counties,  one  thousand  five  hundred  dollars;  in  Dutchess,  Oneida, 
Suffolk,  Orange  and  Rensselaer  counties,  one  thousand  dollars,  and 
in  Richmond  county,  five  hundred  dollars.  Each  of  the  said  ap- 
praisers shall  file  with  the  state  comptroller  his  oath  of  office  and 
his  official  bond  in  the  penal  sum  of  not  less  than  one  thousand 
nor  more  than  twenty  thousand  dollars,  in  the  discretion  of  the  state 
comptroller,  conditioned  for  the  faithful  performance  of  his  duties  as 
such  appraiser,  which  bond  shall  be  approved  by  the  attorney-general 
and  the  state  comptroller.  The  state  comptroller  shall  retain  out  of 
any  funds  in  his  hands  on  account  of  said  tax  the  following  amounts: 
First.  A  sum  sufficient  to  provide  the  appraisers  of  New  York  county 
with  five  stenographers,  and  of  Kings  county  with  one  stenographer, 
appointed  by  the  state  comptroller,  whose  salary  shall  not  exceed  fif- 
teen hundred  dollars  a  year  each,  and  the  aggregate  of  whose  salaries 
in  New  York  county  shall  not  exceed  six  thousand  dollars  a  year. 
Second.  A  sum  to  be  used  in  defraying  the  expenses  for  office  rent, 
stationery,  postage,  process  serving,  et  cetera,  necessarily  incurred  in 
the  appraisal  of  estates,  not  exceeding  five  thousand  dollars  a  year  in 
New  York  county,  and  one  thousand  dollars  a  year  in  Kings  county. 


LAWS  OF   1902,    CHAP.   49'6  473 

In  each  county  in  which  the  office  of  appraiser  is  not  salaried  the  county 
treasurer  shall  act  as  appraiser.  The  surrogate,  either  upon  his  own 
motion,  or  upon  the  application  of  any  interested  party,  including  the 
comptroller  of  the  state  of  New  York,  shall  by  order  direct  the  county 
treasurer  hi  a  county  in  which  the  office  of  appraiser  is  not  salaried, 
and  hi  any  other  county  the  person  or  one  of  such  persons  so  designated 
as  appraisers  to  fix  the  fair  market  value  of  property  of  persons  whose 
estates  shall  be  subject  to  the  payment  of  any  tax  imposed  by  this 
article.  Whenever  a  transfer  of  property  is  made,  upon  which  there 
is,  or  hi  any  contingency  there  may  be,  a  tax  imposed,  such  property 
shall  be  appraised  at  its  clear  market  value  immediately  upon  such 
transfer,  or  as  soon  thereafter  as  practicable.  The  value  of  every 
future  or  limited  estate,  income,  interest  or  annuity  dependent  upon 
any  life  or  lives  in  being,  shall  be  determined  by  the  rule,  method  and 
standard  of  mortality  and  value  employed  by  the  superintendent  of 
insurance  hi  ascertaining  the  value  of  policies  of  life  insurance  and  an- 
nuities for  the  determination  of  liabilities  of  life  insurance  companies, 
except  that  the  rate  of  interest  for  making  such  computation  shall  be 
five  per  centum  per  annum.  In  estimating  the  value  of  any  estate  or 
interest  hi  property,  to  the  beneficial  enjoyment  or  possession  whereof 
there  are  persons  or  corporations  presently  entitled  thereto,  no  allow- 
ance shall  be  made  hi  respect  of  any  contingent  incumbrance  thereon, 
nor  in  respect  of  any  contingency  upon  the  happening  of  which  the 
estate  or  property  or  some  part  thereof  or  interest  therein  might  be 
abridged,  defeated  or  diminished;  provided,  however,  that  hi  the  event 
of  such  mcumbrance  taking  effect  as  an  actual  burden  upon  the  interest 
of  the  beneficiary,  or  in  the  event  of  the  abridgment,  defeat  or  diminu- 
tion of  said  estate  or  property  or  interest  therein  as  aforesaid,  a  return 
shall  be  made  to  the  person  properly  entitled  thereto  of  a  proportionate 
amount  of  such  tax  in  respect  of  the  amount  or  value  of  the  incum- 
brance  when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the 
amount  which  would  have  been  assessed  in  respect  of  the  actual  dura- 
tion or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax 
shall  be  made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article.  Where  any  property  shall,  after  the  passage 
of  this  act,  be  transferred  subject  to  any  charge,  estate  or  interest, 
determinate  by  the  death  of  any  person,  or  at  any  period  ascertainable 
only  by  reference  to  death,  the  increase  of  benefit  accruing  to  any  per- 
son or  corporation  upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest  shall  be  deemed  a  transfer  of  property  taxable  under 
the  provisions  of  this  act  hi  the  same  manner  as  though  the  person  or 
corporation  beneficially  entitled  thereto  had  then  acquired  such  in- 
crease or  benefit  from  the  person  from  whom  the  title  to  their  respec- 
tive estates  or  interests  is  derived.  When  property  is  transferred  in 
trust  or  otherwise,  and  the  rights,  interest  or  estates  of  the  transferees 
are  dependent  upon  contingencies  or  conditions  whereby  they  may 


474  PRIOR  STATUTES 

be  wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax 
shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would  be 
possible  under  the  provisions  of  this  article,  and  such  tax  so  imposed 
shall  be  due  and  payable  forthwith  by  the  executors  or  trustees  out  of 
the  property  transferred;  provided,  however,  that  on  the  happening 
of  any  contingency  whereby  the  said  property,  or  any  part  thereof, 
is  transferred  to  a  person  or  corporation  exempt  from  taxation  under 
the  provisions  of  this  article,  or  to  any  person  taxable  at  a  rate  less 
than  the  rate  imposed  and  paid,  such  person  or  corporation  shall  be 
entitled  to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the 
difference  between  the  amount  paid  and  the  amount  which  said  per- 
son or  corporation  should  pay  under  the  provisions  of  this  article,  with 
interest  thereon  at  the  rate  of  three  per  centum  per  annum  from  the 
time  of  payment.  Such  return  of  over-payment  shall  be  made  in  the 
manner  provided  by  section  two  hundred  and  twenty-five  of  this  ar- 
ticle. Estates  in  expectancy  which  are  contingent  or  defeasible  and 
hi  which  proceedings  for  the  determination  of  the  tax  have  not  been 
taken  or  where  the  taxation  thereof  has  been  held  hi  abeyance,  shall 
be  appraised  at  their  full,  undiminished  value  when  the  persons  en- 
titled thereto  shall  come  into  the  beneficial  enjoyment  or  possession 
thereof,  without  diminution  for  or  on  account  of  any  valuation  there- 
tofore made  of  the  particular  estates  for  purposes  of  taxation,  upon 
which  said  estates  hi  expectancy  may  have  been  limited.  Where  an 
estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility 
of  such  divesting.  All  estates  upon  remainder  or  reversion,  which 
vested  prior  to  May  first,  eighteen  hundred  and  ninety-two,  but  which 
will  not  come  into  actual  possession  or  enjoyment  of  the  person  or 
corporation  beneficially  interested  therein  until  after  the  passage  of 
this  act  shall  be  appraised  and  taxed  as  soon  as  the  person  or  corpora- 
tion beneficially  interested  therein  shall  be  entitled  to  the  actual  pos- 
session or  enjoyment  thereof. 

Laws  of  1906,  Chap.  368,  in  effect  June  1,  1905. 

AN  ACT  to  amend  the  tax  law,  in  relation  to  taxable  transfers. 

Became  a  law,  May  4,  1905,  with  the  approval  of  the  Governor. 
Passed,  three-fifths  being  present. 

The  People  of  the  State  of  New  York,  represented  in  Senate  and 
Assembly,  do  enact  as  follows: 

Section  1.  Article  ten  of  chapter  nine  hundred  and  eight  of 
the  laws  of  eighteen  hundred  and  ninety-six,  entitled  "An  act 


LAWS  OF    1905,   CHAP.   368  475 

in  relation  to  taxation,  constituting  chapter  twenty-four  of  the 
general  laws,"  as  amended,  is  hereby  amended  to  read  as  follows: 


ARTICLE  X. 
TAXABLE  TRANSFERS. 

Section  220.  Taxable  transfers. 

221.  Exceptions  and  limitations. 

222.  Accrual  and  payment  of  tax. 

223.  Discount  and  interest. 

224.  Lien  of  tax  and  collection  by  executors,  adminis- 

trators and  trustees. 

225.  Refund  of  tax  erroneously  paid. 

226.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 

missions. 

227.  Liability  of  certain  corporations  to  tax. 

228.  Jurisdiction  of  the  surrogate. 

229.  Appointment    of    appraisers,    stenographers,    et 

cetera. 

230.  Proceedings  by  appraiser. 

231.  Determination  of  surrogate. 

232.  Appeal  and  other  proceedings. 

233.  Composition  of  transfer  tax  upon  certain  estates. 

234.  Surrogate's  assistants  in  New  York,  Kings  and 

other  counties. 

235.  Proceedings  by  district  attorneys. 

236.  Receipt  from  county  treasurer  or  comptroller. 

237.  Fees  of  county  treasurer. 

238.  Books  and  forms  to  be  furnished  by  the  state 

comptroller. 

239.  Reports  of  surrogate  and  county  clerk. 

240.  Reports  of  county  treasurer. 

240-a.  Report  of  state  comptroller;  payment  of  taxes. 

241.  Application  of  taxes. 

242.  Definitions. 

243.  Exemptions  in  article  one  not  applicable. 

Section  220.  Taxable  transfers. — A  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  property,  real  or  personal, 
of  the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons 


476  PRIOR   STATUTES 

or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this 
state  from  any  person  dying  seized  or  possessed  of  the  property 
while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property 
within  the  state,  and  the  decedent  was  a  nonresident  of  the 
state  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by 
a  nonresident  when  such  nonresident's  property  is  within  this 
state,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor  or  donor,  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

4.  When  any  such  person  or  corporation  becomes  beneficially 
entitled,  in  possession  or  expectancy,  to  any  property  or  the 
income  thereof  by  any  such  transfer,  whether  made  before  or 
after  the  passage  of  this  act. 

5.  Whenever  any  person  or  corporation  shall  exercise  a  power 
of  appointment  derived  from  any  disposition  of  property  made 
either  before  or  after  the  passage  of  this  act,  such  appointment 
when  made  shall  be  deemed  a  transfer  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the 
donee  of  such  power  and  had  been  bequeathed  or  devised  by 
such  donee  by  will;  and  whenever  any  person  or  corporation 
possessing  such  a  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in 
whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this 
act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission 
or  failure,  in  the  same  manner  as  though  the  persons  or  corpora- 
tions thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded 
thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise 
such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

6.  The  tax  imposed  hereby  shall  be  at  the  rate  of  five  per 
centum  upon  the  clear  market  value  of  such  property,  except 
as  otherwise  prescribed  in  the  next  section. 

§  221.  Exceptions  and  limitations. — When  property  real 
or  personal  or  any  beneficial  interest  therein,  of  the  value  of 
less  than  ten  thousand  dollars,  passes  by  any  such  transfer  to  or 
for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother, 
Bister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter, 


LAWS   OF   1905,   CHAP.   368  477 

or  any  child  or  children  adopted  as  such  in  conformity  with  the 
laws  of  this  state,  of  the  decedent,  grantor,  donor  or  vendor, 
or  to  any  child  to  whom  any  such  decedent,  grantor,  donor  or 
vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood 
in  the  mutually  acknowledged  relation  of  a  parent,  provided, 
however,  such  relationship  began  at  or  before  the  child's  fif- 
teenth birthday  and  was  continuous  for  said  ten  years  there- 
after, and  provided  also  that  the  parents  of  such  child  shall  be 
deceased  when  such  relationship  commenced,  or  to  any  lineal 
descendant  of  such  decedent,  grantor,  donor  or  vendor  born  in 
lawful  wedlock,  such  transfer  of  property  shall  not  be  taxable 
under  this  act;  if  real  or  personal  property,  or  any  beneficial 
interest  therein,  so  transferred  is  of  the  value  of  ten  thousand 
dollars  or  more,  it  shall  be  taxable  under  this  act  at  the  rate  of 
one  per  centum  upon  the  clear  market  value  of  such  property. 
But  any  property  devised  or  bequeathed  to  any  person  who  is 
a  bishop  or  to  any  religious,  educational,  charitable,  missionary, 
benevolent,  hospital  or  infirmary  corporation  including  corpora- 
tions organized  exclusively  for  bible  or  tract  purposes  shall  be 
exempted  from  and  not  subject  to  the  provisions  of  this  act. 
There  shall  also  be  exempted  from  and  not  subject  to  the  pro- 
visions of  this  act  personal  property  other  than  money  or  securi- 
ties bequeathed  to  a  corporation  or  association  organized  ex- 
clusively for  the  moral  or  mental  improvement  of  men  or  women 
or  for  scientific,  literary,  library,  patriotic,  cemetery  or  his- 
torical purposes  or  for  the  enforcement  of  laws  relating  to  chil- 
dren or  animals  or  for  two  or  more  of  such  purposes  and  used 
exclusively  for  carrying  out  one  or  more  of  such  purposes.  But 
no  such  corporation  or  association  shall  be  entitled  to  such 
exemption  if  any  officer,  member,  or  employee  thereof  shall 
receive  or  may  be  lawfully  entitled  to  receive  any  pecuniary 
profit  from  the  operations  thereof  except  reasonable  compensa- 
tion for  services  in  effecting  one  or  more  of  such  purposes  or 
as  proper  beneficiaries  of  its  strictly  charitable  purposes;  or 
if  the  organization  thereof  for  any  such  avowed  purpose  be  a 
guise  or  pretense  for  directly  or  indirectly  making  any  other 
pecuniary  profit  for  such  corporation  or  association  or  for  any 
of  its  members  or  employees  or  if  it  be  not  in  good  faith  or- 
ganized or  conducted  exclusively  for  one  or  more  of  such  pur- 
poses. 

§  222.  Accrual  and   payment  of   tax. — All   taxes   imposed 
by  this  article  shall  be  due  and  payable  at  the  time  of  the  trans- 


478  PRIOR   STATUTES 

fer,  except  as  herein  otherwise  provided.  Taxes  upon  the 
transfer  of  any  estate,  property  or  interest  therein  limited, 
conditioned,  dependent  or  determinable  upon  the  happening 
of  any  contingency  or  future  event  by  reason  of  which  the  fair 
market  value  thereof  cannot  be  ascertained  at  the  time  of  the 
transfer  as  herein  provided,  shall  accrue  and  become  due  and 
payable  when  the  persons  or  corporations  beneficially  entitled 
thereto  shall  come  into  actual  possession  or  enjoyment  thereof. 
Such  tax  shall  be  paid  to  the  state  comptroller  in  a  county  in 
which  the  office  of  appraiser  is  salaried,  and  in  other  counties, 
to  the  county  treasurer,  and  said  state  comptroller  or  county 
treasurer  shall  give,  and  every  executor,  administrator  or  trus- 
tee shall  take,  duplicate  receipts  from  him  of  such  payment 
as  provided  in  section  two  hundred  and  thirty-six. 

§  223.  Discount,  and  interest. — If  such  tax  is  paid  within  six 
months  from  the  accrual  thereof,  a  discount  of  five  per  centum 
shall  be  allowed  and  deducted  therefrom.  If  such  tax  is  not 
paid  within  eighteen  months  from  the  accrual  thereof,  interest 
shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per 
centum  per  annum  from  the  time  the  tax  accrued;  unless  by 
reason  of  claims  made  upon  the  estate,  necessary  litigation  or 
other  unavoidable  cause  of  delay,  such  tax  can  not  be  deter- 
mined and  paid  as  herein  provided,  in  which  case  interest  at 
the  rate  of  six  per  centum  per  annum  shall  be  charged  upon 
such  tax  from  the  accrual  thereof  until  the  cause  of  such  delay 
is  removed,  after  which  ten  per  centum  shall  be  charged. 

§  224.  Lien  of  tax  and  collection  by  executors,  adminis- 
trators and  trustees. — Every  such  tax  shall  be  and  remain  a 
lien  upon  the  property  transferred  until  paid  and  the  person 
to  whom  the  property  is  so  transferred,  and  the  executors, 
administrators  and  trustees  of  every  estate  so  transferred  shall 
be  personally  liable  for  such  tax  until  its  payment.  Every 
executor,  administrator  or  trustee,  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  him  to 
pay  such  tax  in  the  same  manner  as  he  might  be  entitled  by 
law  to  do  for  the  payment  of  the  debts  of  the  testator  or  intes- 
tate. Any  such  executor,  administrator  or  trustee  having  in 
charge  or  in  trust  any  legacy  or  property  for  distribution  sub- 
ject to  such  tax  shall  deduct  the  tax  therefrom  and  shall  pay 
over  the  same  to  the  state  comptroller  or  county  treasurer,  as 
herein  provided.  If  such  legacy  or  property  be  not  in  money, 
he  shall  collect  the  tax  thereon  upon  the  appraised  value  thereof 


LAWS   OF   1905,   CHAP.   368  479 

from  the  person  entitled  thereto.  He  shall  not  deliver  or  be 
compelled  to  deliver  any  specific  legacy  or  property  subject  to 
tax  under  this  article  to  any  person  until  he  shall  have  collected 
the  tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or 
payable  out  of  real  property,  the  heir  or  devisee  shall  deduct 
such  tax  therefrom  and  pay  it  to  the  executor,  administrator 
or  trustee,  and  the  tax  shall  remain  a  lien  or  charge  on  such  real 
property  until  paid;  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  payment  of  the  legacy  might  be  enforced,  or  by  the  district 
attorney  under  section  two  hundred  and  thirty-five  of  this 
chapter.  If  any  such  legacy  shall  be  given  in  money  to  any 
such  person  for  a  limited  period,  the  executor,  administrator 
or  trustee  shall  retain  the  tax  upon  the  whole  amount,  but  if  it 
be  not  in  money,  he  shall  make  application  to  the  court  having 
jurisdiction  of  an  accounting  by  him,  to  make  an  apportion- 
ment, if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands 
by  such  legatees,  and  for  such  further  order  relative  thereto  as 
the  case  may  require. 

§  225.  Refund  of  tax  erroneously  paid. — If  any  debts  shall 
be  proven  against  the  estate  of  a  decedent  after  the  payment  of 
any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the 
person  entitled  to  such  legacy  or  distributive  share,  and  such 
person  is  required  by  order  of  the  surrogate  having  jurisdiction, 
on  notice  to  the  state  comptroller,  to  refund  the  amount  of  such 
debts  or  any  part  thereof,  an  equitable  proportion  of  the  tax 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trus- 
tee, if  the  tax  has  not  been  paid  to  the  state  comptroller  or 
county  treasurer;  or  if  such  tax  has  been  paid  to  such  state 
comptroller  or  county  treasurer,  such  officer  shall  refund  out 
of  the  funds  in  his  hands  or  custody  to  the  credit  of  such  tax.es 
such  equitable  proportion  of  the  tax,  and  credit  himself  with 
the  same  in  the  account  required  to  be  rendered  by  him  under 
this  article.  If  after  the  payment  of  any  tax  in  pursuance  of  an 
order  fixing  such  tax,  made  by  the  surrogate  having  jurisdiction, 
such  order  be  modified  or  reversed  within  two  years  from  and 
after  the  date  of  entry  of  the  order  fixing  the  tax,  on  due  notice 
to  the  state  comptroller,  the  state  comptroller  shall,  if  such  tax 
was  paid  in  a  county  in  which  the  office  of  appraiser  is  salaried, 
refund  to  the  executor,  administrator,  trustee,  person  or  per- 
sons by  whom  such  tax  has  been  paid,  the  amount  of  any  moneys 


480  PRIOR   STATUTES 

paid  or  deposited  on  account  of  such  tax  in  excess  of  the  amount 
of  the  tax  fixed  by  the  order  modified  or  reversed,  out  of  the 
funds  in  his  hands  or  custody  to  the  credit  of  such  taxes,  and 
to  credit  himself  with  the  same  in  the  account  required  to  be 
rendered  by  him  under  this  act,  or  if  paid  in  a  county  in  which 
the  office  of  appraiser  is  not  salaried,  he  shall  by  warrant  direct 
and  allow  the  county  treasurer  of  the  county  to  refund  such 
amount  in  the  same  manner;  but  no  application  for  such  refund 
shall  be  made  after  one  year  from  such  reversal  or  modification, 
and  the  state  comptroller  shall  deduct  from  the  fees  allowed  by 
this  article  to  the  county  treasurer  the  amount  theretofore  al- 
lowed him  upon  such  overpayment.  Where  it  shall  be  proved 
to  the  satisfaction  of  the  surrogate  that  deductions  for  debts 
were  allowed  upon  the  appraisal,  since  proved  to  have  been 
erroneously  allowed,  it  shall  be  lawful  for  such  surrogate  to 
enter  an  order  assessing  the  tax  upon  the  amount  wrongfully  or 
erroneously  deducted. 

§  226.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 
missions.— If  a  testator  bequeaths  or  devises  property  to  one 
or  more  executors  or  trustees  in  lieu  of  their  commissions  or 
allowances,  or  makes  them  his  legatees  to  an  amount  exceeding 
the  commissions  or  allowances  prescribed  by  law  for  an  executor 
or  trustee,  the  excess  in  value  of  the  property  so  bequeathed  or 
devised,  above  the  amount  of  commissions  or  allowances  pre- 
scribed by  law  in  similar  cases  shall  be  taxable  under  this  article. 

§  227.  Liability  of  certain  corporations  to  tax. — If  a  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligations  hi  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the 
tax  shall  be  paid  to  the  state  comptroller  or  the  treasurer  of 
the  proper  county  on  the  transfer  thereof.  No  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institu- 
tion, person  or  persons  having  in  possession  or  under  control 
securities,  deposits,  or  other  assets  belonging  to  or  standing 
in  the  name  of  a  decedent  who  was  a  resident  or  nonresident, 
or  belonging  to,  or  standing  in  the  joint  names  of  such  a  de- 
cedent and  one  or  more  persons,  including  the  shares  of  the 
capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  making 
the  delivery  or  transfer  herein  provided,  shall  deliver  or  transfer 
the  same  to  the  executors,  administrators  or  legal  representa- 
tives of  said  decedent,  or  to  the  survivor  or  survivors  when  held 


LAWS   OF    1905,    CHAP.    368  481 

in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or 
upon  their  order  or  request,  unless  notice  of  the  time  and  place 
of  such  intended  delivery  or  transfer  be  served  upon  the  state 
comptroller  at  least  ten  days  prior  to  said  delivery  or  transfer; 
nor  shall  any  such  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution,  person  or  persons  deliver 
or  transfer  any  securities,  deposits  or  other  assets  belonging  to 
or  standing  in  the  name  of  a  decedent,  or  belonging  to,  or  stand- 
ing in  the  joint  names  of  a  decedent  and  one  or  more  persons, 
including  the  shares  of  the  capital  stock  of,  or  other  interests 
in,  the  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax 
and  interest  which  may  thereafter  be  assessed  on  account  of 
the  delivery  or  transfer  of  such  securities,  deposits  or  other 
assets,  including  the  shares  of  the  capital  stock  of,  or  other  in- 
terests in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution  making  the  delivery  or  transfer, 
under  the  provisions  of  this  article,  unless  the  state  comptroller 
consents  thereto  in  writing.  And  it  shall  be  lawful  for  the  said 
state  comptroller,  personally  or  by  representative,  to  examine 
said  securities,  deposits  or  assets  at  the  time  of  such  delivery 
or  transfer.  Failure  to  serve  such  notice  or  failure  to  allow 
such  examination,  or  failure  to  retain  a  sufficient  portion  or 
amount  to  pay  such  tax  and  interest  as  herein  provided  shall 
render  said  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  person  or  persons  liable  to  the  pay- 
ment of  the  amount  of  the  tax  and  interest  due  or  thereafter 
to  become  due  upon  said  securities,  deposits  or  other  assets, 
including  the  shares  of  the  capital  stock  of,  or  other  interests 
in,  the  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  and  in  ad- 
dition thereto,  a  penalty  of  one  thousand  dollars;  and  the  pay- 
ment of  such  tax  and  interest  thereon,  or  of  the  penalty  above 
prescribed,  or  both,  may  be  enforced  in  an  action  brought  by 
the  state  comptroller  in  any  court  of  competent  jurisdiction. 

§  228.  Jurisdiction  of  the  surrogate. — The  surrogate's  court 
of  every  county  of  the  state  having  jurisdiction  to  grant  letters 
testamentary  or  of  administration  upon  the  estate  of  a  de- 
cedent whose  property  is  chargeable  with  any  tax  under  this 
article,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 
or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to 
31 


482  PRIOR   STATUTES 

hear  and  determine  all  questions  arising  under  the  provisions 
of  this  article,  and  to  do  any  act  in  relation  thereto  authorized 
by  law  to  be  done  by  a  surrogate  in  other  matters  or  proceed- 
ings coming  within  his  jurisdiction;  and  if  two  or  more  surro- 
gate's courts  shall  be  entitled  to  exercise  any  such  jurisdiction, 
the  surrogate  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same  to  the  exclusion  of  every  other  surrogate.  Every  peti- 
tion for  ancillary  letters  testamentary  or  ancillary  letters  of 
administration  made  in  pursuance  of  the  provisions  of  article 
seven,  title  three,  chapter  eighteen  of  the  code  of  civil  procedure 
shall  set  forth  the  name  of  the  state  comptroller  as  a  person  to 
be  cited  as  therein  prescribed,  and  a  true  and  correct  statement 
of  all  the  decedent's  property  in  this  state  and  the  value  thereof; 
and  upon  the  presentation  thereof  the  surrogate  shall  issue  a 
citation  directed  to  the  state  comptroller;  and  upon  the  return 
of  the  citation  the  surrogate  shall  determine  the  amount  of  the 
tax  which  may  be  or  become  due  under  the  provisions  of  this 
article  and  his  decree  awarding  the  letters  may  contain  any 
provision  for  the  payment  of  such  tax  or  the  giving  of  security 
therefor  which  might  be  made  by  such  surrogate  if  the  state 
comptroller  were  a  creditor  of  the  decedent. 

§  229.  Appointment  of  appraisers,  stenographers,  et  cetera. 
—The  state  comptroller  shall  appoint  and  may  at  pleasure 
remove  not  to  exceed  six  persons  in  the  county  of  New  York; 
two  persons  in  the  county  of  Kings,  and  one  person  in  the  coun- 
ties of  Albany,  Dutchess,  Erie,  Monroe,  Oneida,  Onondaga, 
Orange,  Queens,  Rensselaer,  Richmond,  Suffolk  and  Westchester, 
to  act  as  appraisers  therein.  The  appraisers  so  appointed  shall 
receive  an  annual  salary  to  be  fixed  by  the  state  comptroller, 
together  with  their  actual  and  necessary  traveling  expenses 
and  witness  fees,  as  hereinafter  provided,  payable  monthly  by 
the  state  comptroller  out  of  any  funds  in  his  hands  or  custody 
on  account  of  transfer  tax.  The  salaries  of  each  of  the  appraisers 
so  appointed  shall  not  exceed  the  following  amounts:  In  New 
York  county,  four  thousand  dollars;  in  Kings  county,  three 
thousand  dollars;  in  Erie  county,  three  thousand  dollars;  in 
Westchester  and  Albany  counties,  twenty-five  hundred  dollars  ; 
in  Queens,  Monroe  and  Onondaga  counties,  one  thousand  five 
hundred  dollars;  in  Dutchess,  Oneida,  Orange,  Rensselaer  and 
Suffolk  counties,  one  thousand  dollars,  and  in  Richmond  county, 
five  hundred  dollars.  Each  of  the  said  appraisers  shall  file 
with  the  state  comptroller  his  oath  of  office  and  his  official  bond 


LAWS  OF    1905,   CHAP.   368  483 

in  the  penal  sum  of  not  less  than  one  thousand  dollars,  in  the 
discretion  of  the  state  comptroller,  conditioned  for  the  faithful 
performance  of  his  duties  as  such  appraiser,  which  bond  shall 
be  approved  by  the  attorney-general  and  the  state  comptroller. 
The  state  comptroller  shall  retain  out  of  any  funds  in  his  hands 
on  account  of  said  tax  the  following  amounts:  First.  A  sum 
sufficient  to  provide  the  appraisers  of  New  York  county  with 
five  stenographers,  of  Kings  county  with  two  stenographers, 
and  of  Erie  county  with  one  clerk,  appointed  by  the  state  comp- 
troller, whose  salary  shall  not  exceed  fifteen  hundred  dollars  a 
year  each.  Second.  A  sum  to  be  used  in  defraying  the  expenses 
for  office  rent,  stationery,  postage,  process  serving,  et  cetera, 
necessarily  incurred  in  the  appraisal  of  estates,  not  exceeding 
seven  thousand  five  hundred  dollars  a  year  in  New  York  county, 
and  one  thousand  five  hundred  dollars  a  year  in  Kings  county. 

§  230.  Proceedings  by  appraiser. — In  each  county  in  which 
the  office  of  appraiser  is  not  salaried  the  county  treasurer  shall 
act  as  appraiser.  The  surrogate,  either  upon  his  own  motion, 
or  upon  the  application  of  any  interested  person,  including  the 
state  comptroller,  shall  by  order  direct  the  person  or  one  of  the 
persons  appointed  pursuant  to  section  two  hundred  and  twenty- 
nine  of  this  article  in  counties  in  which  the  office  of  appraiser 
is  salaried,  and  in  other  counties,  the  county  treasurer,  to  fix 
the  fair  market  value  of  property  of  persons  whose  estates  shall 
be  subject  to  the  payment  of  any  tax  imposed  by  this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by  mail  to 
all  persons  known  to  have  a  claim  or  interest  in  the  property 
to  be  appraised,  including  the  state  comptroller,  and  to  such 
persons  as  the  surrogate  may  by  order  direct,  of  the  time  and 
place  when  he  will  appraise  such  property.  He  shall  at  such 
time  and  place,  appraise  the  same  at  its  fair  market  value  as 
herein  prescribed;  and  for  that  purpose  the  said  appraiser  is 
authorized  to  issue  subpoenas  and  to  compel  the  attendance  of 
witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof; 
and  he  shall  make  report  thereof  and  of  such  value  in  writing, 
to  the  said  surrogate,  together  with  the  depositions  of  the  wit- 
nesses examined,  and  such  other  facts  in  relation  thereto  and  to 
said  matter  as  the  surrogate  may  order  or  require.  Every  ap- 
praiser, except  in  the  counties  in  which  the  office  of  appraiser  is 
salaried,  for  which  provision  is  hereinbefore  made,  shall  be 
paid  by  the  state  comptroller  and  after  the  audit  of  said  state 


484  PRIOR  STATUTES 

comptroller,  his  actual  and  necessary  traveling  expenses  and 
the  fees  paid  such  witnesses,  which  fees  shall  be  the  same  as 
those  now  paid  to  witnesses  subpoenaed  to  attend  in  courts  of 
record,  payment  to  be  made  out  of  funds  in  the  hands  of  the 
county  treasurer  of  the  proper  county  on  account  of  the  tax 
imposed  under  the  provisions  of  this  article.  Appraisers  ap- 
pointed under  this  article  in  proceedings  pending  at  the  time 
the  amendment  to  this  section  takes  effect  shall  complete  the 
appraisals  therein  and  file  their  reports  as  herein  provided,  and 
shall  be  entitled  to  the  compensation  authorized  by  law  at  the 
time  of  their  appointment,  to  be  paid  by  the  state  comptroller 
in  counties  in  which  the  office  of  appraiser  is  salaried,  and  in 
other  counties  by  the  county  treasurer,  out  of  any  moneys  in 
his  hands  on  account  of  this  tax. 

The  value  of  every  future  or  limited  estate,  income,  interest 
or  annuity  dependent  upon  any  life  or  lives  in  being,  shall  be 
determined  by  the  rule,  method  and  standard  of  mortality  and 
value  employed  by  the  superintendent  of  insurance  in  ascer- 
taining the  value  of  policies  of  life  insurance  and  annuities  for 
the  determination  of  liabilities  of  life  insurance  companies, 
except  that  the  rate  of  interest  for  making  such  computation 
shall  be  five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in  property, 
to  the  beneficial  enjoyment  or  possession  whereof  there  are  per- 
sons or  corporations  presently  entitled  thereto,  no  allowance 
shall  be  made  on  account  of  any  contingent  mcumbrance 
thereon,  nor  on  account  of  any  contingency  upon  the  happening 
of  which  the  estate  or  property  or  some  part  thereof  or  interest 
therein  might  be  abridged,  defeated  or  diminished;  provided, 
however,  that  in  the  event  of  such  incumbrance  taking  effect  as 
an  actual  burden  upon  the  interest  of  the  beneficiary,  or  in  the 
event  of  the  abridgment,  defeat  or  diminution  of  said  estate  or 
property  or  interest  therein  as  aforesaid,  a  return  shall  be  made 
to  the  person  properly  entitled  thereto  of  a  proportionate  amount 
of  such  tax  on  account  of  the  incumbrance  when  taking  effort, 
or  so  much  as  will  reduce  the  same  to  the  amount  which  would 
have  been  assessed  on  account  of  the  actual  duration  or  extent 
of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  bo 
made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article. 

Where  any  property  shall,  after  the  passage  of  this  act,  be 
transferred  subject  to  any  charge,  estate  or  interest,  determin- 


LAWS   OF    1905,   CHAP.    368  485 

able  by  the  death  of  any  person,  or  at  any  period  ascertainable 
only  by  reference  to  death,  the  increase  accruing  to  any  person 
or  corporation  upon  the  extinction  or  determination  of  such 
charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property 
taxable  under  the  provisions  of  this  act  in  the  same  manner 
as  though  the  person  or  corporation  beneficially  entitled  thereto 
had  then  acquired  such  increase  from  the  person  from  whom 
the  title  to  their  respective  estates  or  interests  is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in 
part  created,  defeated,  extended  or  abridged,  a  tax  shall  be 
imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would 
be  possible  under  the  provisions  of  this  article  and  such  tax 
so  imposed  shall  be  due  and  payable  forthwith  by  the  executors 
or  trustees  out  of  the  property  transferred;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or  cor- 
poration exempt  from  taxation  under  the  provisions  of  this 
article,  or  to  any  person  taxable  at  a  rate  less  than  the  rate 
imposed  and  paid,  such  person  or  corporation  shall  be  entitled 
to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the 
difference  between  the  amount  paid  and  the  amount  which 
said  person  or  corporation  should  pay  under  the  provisions  of 
this  article,  with  interest  thereon  at  the  rate  of  three  per  centum 
per  annum  from  the  time  of  payment.  Such  return  of  over- 
payment shall  be  made  in  the  manner  provided  by  section  two 
hundred  and  twenty-five  of  this  article.  i 

Estates  in  expectancy  which  are  contingent  or  defeasible  and 
in  which  proceedings  for  the  determination  of  the  tax  have  not 
been  taken  or  where  the  taxation  thereof  has  been  held  in  abey- 
ance, shall  be  appraised  at  their  full,  undiminished  value  when 
the  persons  entitled 'thereto  shall  come  into  the  beneficial  en- 
joyment or  possession  thereof,  without  diminution  for  or  on 
account  of  any  valuation  theretofore  made  of  the  particular 
estates  for  purposes  of  taxation,  upon  which  said  estates  in  ex- 
pectancy may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the 
act  or  omission  of  the  legatee  or  devisee  it  shall  be  taxed  as  if 
there  were  no  possibility  of  such  divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one 


486  PRIOR   STATUTES 

of  which  duplicates  shall  be  filed  in  the  office  of  the  surrogate 
and  the  other  in  the  office  of  the  state  comptroller. 

§  231.  Determination  of  surrogate. — From  such  report  of 
appraisal  and  other  proof  relating  to  any  such  estate  before  the 
surrogate,  the  surrogate  shall  forthwith,  as  of  course,  determine 
the  cash  value  of  all  estates  and  the  amount  of  tax  to  which 
the  same  are  liable;  or  the  surrogate  may  so  determine  the  cash 
value  of  all  such  estates  and  the  amount  of  tax  to  which  the 
same  are  liable,  without  appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  application  of 
any  surrogate,  determine  the  value  of  any  such  future  or  con- 
tingent estates,  income  or  interest  therein  limited,  contingent, 
dependent  or  determinable  upon  the  life  or  lives  of  persons  in 
being,  upon  the  facts  contained  in  any  such  appraiser's  report, 
and  certify  the  same  to  the  surrogate,  and  his  certificate  shall 
be  conclusive  evidence  that  the  method  of  computation  adopted 
therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the  deter- 
mination by  him  as  to  the  value  of  any  estate  which  is  taxable 
under  this  article,  and  of  the  tax  to  which  it  is  liable,  to  all  per- 
sons known  to  be  interested  therein,  and  shall  immediately 
forward  a  copy  of  such  taxing  order  to  the  state  comptroller. 
The  surrogate  shall  also  forward  to  the  state  comptroller  copies 
of  all  orders  entered  by  him  in  relation  to  or  affecting  in  any  way 
the  transfer  tax  on  any  estate,  including  orders  of  exemption. 

If,  however,  it  appear  at  any  stage  of  the  proceedings  that 
any  of  such  persons  known  to  be  interested  in  the  estate  is  an 
infant  or  an  incompetent,  the  surrogate  may,  if  the  interest  of 
such  infant  or  incompetent  is  presently  involved  and  is  adverse 
to  that  of  any  of  the  other  persons  interested  therein,  appoint  a 
special  guardian  of  such  infant;  but  nothing  in  this  provision 
shall  affect  the  right  of  an  infant  over  fourteen  years  of  age  or 
of  any  one  on  behalf  of  an  infant  under  fourteen  years  of  age 
to  nominate  and  apply  for  the  appointment  of  a  special  guardian 
for  such  infant  at  any  stage  of  the  proceedings. 

§  232.  Appeal  and  other  proceedings. — The  state  comp- 
troller or  any  person  dissatisfied  with  the  appraisement  or  assess- 
ment and  determination  of  tax  may  appeal  therefrom  to  the 
surrogate  within  sixty  days  from  the  fixing,  assessing  and  deter- 
mination of  tax  by  the  surrogate  as  herein  provided,  upon  filing 
in  the' office  of  the  surrogate  a  written  notice  of  appeal,  which 
shall  state  the  grounds  upon  which  the  appeal  is  taken. 


LAWS   OF    1905,    CHAP.    368  487 

Within  two  years  after  the  entry  of  an  order  or  decree  of  a 
surrogate  determining  the  value  of  an  estate  and  assessing  the 
tax  thereon,  the  state  comptroller  may,  if  he  believes  that  such 
appraisal,  assessment  or  determination  has  been  fraudulently, 
collusively,  or  erroneously  made,  make  application  to  a  justice 
of  the  supreme  court  of  the  judicial  district  in  which  the  former 
owner  of  such  estate  resided,  for  a  reappraisal  thereof.  The 
justice  to  whom  such  application  is  made  may  thereupon  ap- 
point a  competent  person  to  reappraise  such  estate.  Such  ap- 
praiser shall  possess  the  powers  and  be  subject  to  the  duties 
of  an  appraiser  under  section  two  hundred  and  thirty  and  shall 
receive  compensation  at  the  rate  of  five  dollars  per  day  for  every 
day  actually  and  necessarily  employed  in  such  appraisal.  Such 
compensation  shall  be  payable  by  the  state  comptroller  or 
county  treasurer  out  of  any  funds  he  may  have  on  account  of 
any  tax  imposed  under  the  provisions  of  this  article,  upon  the 
certificate  of  the  justice  appointing  him.  The  report  of  such 
appraiser  shall  be  filed  with  the  justice  by  whom  he  was  ap- 
pointed, and  thereafter  the  same  proceedings  shall  be  taken  and 
had  by  and  before  such  justice  as  are  herein  provided  to  be 
taken  and  had  by  and  before  the  surrogate.  The  determination 
and  assessment  of  such  justice  shall  supersede  the  determina- 
tion and  assessment  of  the  surrogate,  and  shall  be  filed  by  such 
justice  in  the  office  of  the  state  comptroller,  and  a  certified 
copy  thereof  transmitted  to  the  surrogate's  court  of  the  proper 
county. 

§  233.  Composition  of  transfer  tax  upon  certain  estates.— 
The  state  comptroller,  by  and  with  the  consent  of  the  attorney- 
general  expressed  in  writing,  is  hereby  empowered  and  au- 
thorized to  enter  into  an  agreement  with  the  trustees  of  any 
estate  hi  which  remainders  or  expectant  estates  have  been  of 
such  a  nature,  or  so  disposed  and  circumstanced  that  the  taxes 
therein  were  held  not  presently  payable,  or  where  the  interests 
of  the  legatees  or  devisees  were  not  ascertainable  under  the 
provisions  of  chapter  four  hundred  and  eighty-three  of  the  laws 
of  eighteen  hundred  and  eighty-five;  chapter  three  hundred 
and  ninety-nine  of  the  laws  of  eighteen  hundred  and  ninety- 
two,  or  chapter  nine  hundred  and  eight  of  the  laws  of  eighteen 
hundred  and  ninety-six,  and  the  several  acts  amendatory  thereof 
and  supplemental  thereto;  and  to  compound  such  taxes  upon 
such  terms  as  may  be  deemed  equitable  and  expedient;  and  to 
grant  discharge  to  said  trustees  upon  the  payment  of  the  taxes 


488  PRIOR    STATUTES 

provided  for  in  such  composition,  provided,  however,  that  no 
such  composition  shall  be  conclusive  in  favor  of  said  trustees 
as  against  the  interests  of  such  cestuis  que  trust  as  may  possess 
either  present  rights  of  enjoyment,  or  fixed,  absolute  or  in- 
defeasible rights  of  future  enjoyment,  or  of  such  as  would  possess 
such  rights  in  the  event  of  the  immediate  termination  of  par- 
ticular estates,  unless  they  consent  thereto,  either  personally, 
when  competent,  or  by  guardian  or  committee.  Composition 
or  settlement  made  or  effected  under  the  provisions  of  this 
section  shall  be  executed  in  triplicate,  and  one  copy  filed  in 
the  office  of  the  state  comptroller,  one  copy  in  the  office  of  the 
surrogate  of  the  county  in  which  the  tax  was  paid,  and  one 
copy  delivered  to  the  executors,  administrators  or  trustees  who 
shall  be  parties  thereto. 

§  234.  Surrogate's  assistants  in  New  York,  Kings  and  other 
counties. — The  state  comptroller  may,  upon  the  recommenda- 
tion of  the  surrogate,  appoint,  and  may  at  pleasure  remove 
assistants  and  clerks  in  the  surrogate's  offices  of  the  following 
counties,  at  annual  salaries  to  be  fixed  by  him  not  to  exceed 
the  amounts  hereinafter  specified: 

1.  In  New  York  county,  a  transfer  tax  assistant,  four  thou- 
sand dollars;  a  transfer  tax  clerk,  two  thousand  four  hundred 
dollars;  an  assistant  clerk,  eighteen  hundred  dollars;  a  record- 
ing clerk,  thirteen  hundred  dollars;  a  stenographer,  eight  hun- 
dred dollars;  and  shall  be  entitled  to  expend  not  more  than  five 
hundred  dollars  a  year  in  such  office  for  expenses  necessarily 
incurred  in  the  assessment  and  collection  of  taxes  under  this 
article. 

2.  In  Kings  county,  a  transfer  tax  assistant,  four  thousand 
dollars;  a  transfer  tax  clerk,  two  thousand  dollars;  an  assistant 
clerk,  fifteen  hundred  dollars;  and  shall  be  entitled  to  expend 
not  more  than  five  hundred  dollars  a  year  for  expenses  neces- 
sarily incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

3.  In  Erie  county,  a  transfer  tax  clerk,  eighteen  hundred 
dollars. 

4.  In  Westchester  county,  a  transfer  tax  assistant,  two  thou- 
sand dollars. 

5.  In  Albany  county,  a  transfer  tax  clerk,  one  thousand  dol- 
lars. 

6.  In  Queens  county,  a  transfer  tax  clerk,  one  thousand  dol- 
lars. 


LAWS  OF  1905,  CHAP.  368  489 

7.  In  Onondaga  county,  a  transfer  tax  clerk,  twelve  hundred 
dollars. 

8.  In  Monroe  county,  two  transfer  tax  clerks,  seven  hundred 
and  fifty  dollars  each;  and  shall  be  entitled  to  expend  not  more 
than  two  hundred  dollars  a  year  for  expenses  necessarily  incurred 
in  the  assessment  and  collection  of  taxes  under  this  article. 

9.  In  Dutchess  county,  a  transfer  tax  clerk,  nine  hundred 
dollars. 

10.  In  Oneida  county,  not  more  than  two  transfer  tax  clerks, 
twelve  hundred  dollars  in  the  aggregate. 

11.  In  Suffolk  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

12.  In  Ulster  county,  a  transfer  tax  clerk,  seven  hundred  and 
twenty  dollars. 

Such  salaries  and  expenses  shall  be  paid  monthly  by  the 
state  comptroller,  upon  proper  vouchers,  out  of  any  funds  in 
his  hands  on  account  of  taxes  collected  under  this  article. 

§  235.  Proceedings  by  district  attorneys. — If,  after  the  ex- 
piration of  eighteen  months  from  the  accrual  of  any  tax  under 
this  article,  such  tax  shall  remain  due  and  unpaid,  after  the 
refusal  or  neglect  of  the  persons  liable  therefor  to  pay  the  same, 
the  state  comptroller  shall  notify  the  district  attorney  of  the 
county,  in  writing,  of  such  failure  or  neglect,  and  such  district 
attorney  shall  apply  to  the  surrogate's  court  for  a  citation,  citing 
the  persons  liable  to  pay  such  tax  to  appear  before  the  court  on 
the  day  specified,  not  more  than  three  months  after  the  date  of 
such  citation,  and  show  cause  why  the  tax  should  not  be  paid. 
The  surrogate,  upon  such  application,  and  whenever  it  shall 
appear  to  him  that  any  such  tax  accruing  under  this  article 
has  not  been  paid  as  required  by  law,  shall  issue  such  citation 
and  the  service  of  such  citation,  and  the  time,  manner  and  proof 
thereof,  and  the  hearing  and  determination  thereon  and  the 
enforcement  of  the  determination  or  order  made  by  the  surro- 
gate shall  conform  to  the  provisions  of  the  code  of  civil  pro- 
cedure for  the  service  of  citations  out  of  the  surrogate's  court, 
and  the  hearing  and  determination  thereon  and  its  enforcement 
so  far  as  the  same  may  be  applicable.  The  surrogate  or  his  clerk 
shall,  upon  request  of  the  district  attorney  or  the  state  comp- 
troller, furnish,  without  fee,  one  or  more  transcripts  of  such 
decree,  which  shall  be  docketed  and  filed  by  the  county  clerk 
of  any  county  of  the  state  without  fee,  in  the  same  manner 
and  with  the  same  effect  as  provided  by  law  for  filing  and  docket- 


490  PRIOR   STATUTES 

ing  transcripts  of  decrees  of  the  surrogate's  court.  The  cost 
awarded  by  any  such  decree  after  the  collection  and  payment 
of  the  tax  to  the  state  comptroller  or  county  treasurer  may  be 
retained  by  the  district  attorney  for  his  own  use.  Such  costs 
shall  be  fixed  by  the  surrogate  in  his  discretion,  but  shall  not 
exceed  in  any  case  where  there  has  not  been  a  contest,  the  sum 
of  one  hundred  dollars,  or  where  there  has  been  a  contest  the 
sum  of  two  hundred  and  fifty  dollars.  Whenever  the  surrogate 
shall  certify  that  there  was  probable  cause  for  issuing  a  citation 
and  taking  the  proceedings  specified  in  this  section,  the  state 
comptroller,  after  the  same  shall  have  been  audited  by  him, 
shall  pay  all  expenses  incurred  for  the  service  of  citations  and 
other  lawful  disbursements  not  otherwise  paid,  from  funds  in 
his  hands  on  account  of  such  tax,  or  in  a  county  in  which  the 
office  of  appraiser  is  not  salaried,  by  a  warrant  upon  the  county 
treasurer  of  such  county  for  the  payment  by  him  of  the  same 
from  funds  in  his  hands  on  account  of  such  tax.  In  proceedings 
to  which  the  state  comptroller  is  cited  as  a  party  under  sections 
two  hundred  and  twenty-nine  and  two  hundred  and  thirty  of 
this  article,  he  is  authorized  to  designate  and  retain  counsel 
to  represent  him  and  to  pay  the  expenses  thereby  incurred 
out  of  the  funds  which  may  be  in  his  hands  on  account  of  this 
tax  in  any  case  in  a  county  where  the  office  of  appraiser  is 
salaried,  and  in  any  other  county  the  state  comptroller  shall 
by  warrant  direct  the  county  treasurer  to  pay  such  expenses 
out  of  any  funds  which  may  be  in  his  hands  on  account  of  this 
tax;  provided,  however,  that  in  the  collection  of  taxes  upon 
estates  of  non-resident  decedents  the  state  comptroller  shall 
not  allow  for  legal  services  up  to  and  including  the  entry  of 
the  order  of  the  surrogate  fixing  the  tax  a  sum  exceeding  ten 
per  centum  of  the  taxes  and  penalties  collected. 

§  236.  Receipts  from  county  treasurer  or  comptroller. — 
One  of  the  duplicate  receipts  issued  for  the  payment  of  any  tax 
under  this  article,  as  provided  by  section  two  hundred  and 
twenty-two,  shall  be  countersigned  by  the  state  treasurer  if 
the  same  was  issued  by  the  state  comptroller,  and  by  the  state 
comptroller  if  issued  by  any  county  treasurer.  The  officer  so 
countersigning  the  same  shall  charge  the  officer  receiving  the 
tax  with  the  amount  thereof  and  affix  the  seal  of  his  office  to 
the  same  and  return  to  the  proper  person;  but  no  executor, 
administrator  or  trustee  shall  be  entitled  to  a  final  accounting 
of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  provi- 


LAWS  OF    1905,   CHAP.   368  491 

sions  of  this  article  unless  he  shall  produce  a  receipt  so  sealed 
and  countersigned,  or  a  certified  copy  thereof.  Any  person 
shall,  upon  the  payment  of  fifty  cents  to  the  officer  issuing  such 
receipt,  be  entitled  to  a  duplicate  thereof,  to  be  signed,  sealed 
and  countersigned  in  the  same  manner  as  the  original. 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be  entitled 
to  a  certificate  of  the  state  comptroller  that  the  tax  upon  the 
transfer  of  any  real  estate  of  which  any  decedent  died  seized 
has  been  paid,  such  certificate  to  designate  the  real  property 
upon  which  such  tax  is  paid,  the  name  of  the  person  so  paying 
the  same,  and  whether  in  full  of  such  tax.  Such  certificate  may 
be  recorded  in  the  office  of  the  county  clerk  or  register  of  the 
county  where  such  real  property  is  situate,  in  a  book  to  be  kept 
by  him  for'that  purpose,  which  shall  be  labeled  "transfer  tax." 

§  237.  Fees  of  county  treasurer. — The  treasurer  of  each 
county  in  which  the  office  of  appraiser  is  not  salaried  shall  be 
allowed  to  retain  on  all  taxes  paid  and  accounted  for  by  him 
each  fiscal  year  under  this  article,  five  per  centum  on  the  first 
fifty  thousand  dollars,  three  per  centum  on  the  next  fifty  thou- 
sand dollars,  and  one  per  centum  on  all  additional  sums.  Such 
fees  shall  be  in  addition  to  the  salaries  and  fees  now  allowed  by 
law  to  such  officers. 

§  238.  Books  and  forms  to  be  furnished  by  the  state  comp- 
troller.— The  state  comptroller  shall  furnish  to  each  surrogate, 
a  book,  which  shall  be  a  public  record,  and  in  which  he  shall 
enter  the  name  of  every  decedent  upon  whose  estate  an  applica- 
tion to  him  has  been  made  for  the  issue  of  letters  of  administra- 
tion, or  letters  testamentary,  or  ancillary  letters,  the  date  and 
place  of  death  of  such  decedent,  the  estimated  value  of  his  real 
and  personal  property,  the  names,  places  of  residence  and  re- 
lationship to  him  of  his  heirs-at-law,  the  names  and  places  of 
residence  of  the  legatees  and  devisees  in  any  will  of  any  such 
decedent,  the  amount  of  each  legacy  and  the  estimated  value  of 
any  real  property  devised  therein,  and  to  whom  devised.  These 
entries  shall  be  made  from  the  data  contained  in  the  papers 
filed  on  any  such  application,  or  in  any  proceeding  relating  to 
the  estate  of  the  decedent.  The  surrogate  shall  also  enter  in 
such  book  the  amount  of  the  personal  property  of  any  such 
decedent,  as  shown  by  the  inventory  thereof  when  made  and 
filed  in  his  office,  and  the  returns  made  by  any  appraiser  ap- 
pointed by  him  under  this  article,  and  the  value  of  annuities, 
life  estates,  terms  of  years,  and  other  property  of  any  such 


492  PRIOR   STATUTES 

decedent  or  given  by  him  in  his  will  or  otherwise,  as  fixed  by 
the  surrogate,  and  the  tax  assessed  thereon,  and  the  amounts 
of  any  receipts  for  payment  of  any  tax  on  the  estate  of  such 
decedent  under  this  article  filed  with  him.  The  state  comp- 
troller shall  also  furnish  to  each  surrogate  forms  for  the  reports 
to  be  made  by  such  surrogate,  which  shall  correspond  with  the 
entries  to  be  made  in  such  book. 

§  239.  Reports  of  surrogate  and  county  clerk — Each  sur- 
rogate shall,  on  January,  April,  July  and  October  first  of  each 
year  make  a  report,  upon  the  forms  furnished  by  the  comp- 
troller containing  all  the  data  and  matters  required  to  be  en- 
tered in  such  book,  which  shall  be  immediately  forwarded  to 
the  state  comptroller.  The  county  clerk  of  each  county,  ex- 
cept in  the  counties  where  the  registers  perform  the  duties  of 
the  county  clerk  with  respect  to  the  recording  of  deeds,  and 
when  in  such  counties  the  registers,  shall,  at  the  same  times, 
make  reports  containing  a  statement  of  any  deed  or  other  con- 
veyance filed  or  recorded  in  his  office,  of  any  property,  which 
appears  to  have  been  made  or  intended  to  take  effect  in  pos- 
session or  enjoyment  after  the  death  of  the  grantor  or  vendor, 
with  the  name  and  place  of  residence  of  such  grantor  or  vendor, 
the  name  and  place  of  residence  of  the  grantee  or  vendee,  and 
a  description  of  the  property  transferred,  which  shall  be  im- 
mediately forwarded  to  the  state  comptroller. 

§  240.  Reports  of  county  treasurer. — Each  county  treasurer 
in  a  county  in  which  the  office  of  appraiser  is  not  salaried  shall 
make  a  report,  under  oath,  to  the  state  comptroller,  on  January, 
April,  July  and  October  first  of  each  year,  of  all  taxes  received 
by  him  under  this  article,  stating  for  what  estate  and  by  whom 
and  when  paid.  The  form  of  such  report  may  be  prescribed  by 
the  state  comptroller.  He  shall,  at  the  same  time,  pay  the  state 
treasurer  all  taxes  received  by  him  under  this  article  and  not 
previously  paid  into  the  state  treasury,  and  for  all  such  taxes 
collected  by  him  and  not  paid  into  the  state  treasury  within 
thirty  days  from  the  times  herein  required,  he  shall  pay  in- 
terest at  the  rate  of  ten  per  centum  per  annum. 

§  240-a.  Report  of  state  comptroller;  payment  of  taxes. — 
The  state  comptroller  shall  deposit  all  taxes  collected  by  him 
under  this  article  in  a  responsible  bank,  banking  house  or  trust 
company  in  the  city  of  Albany,  which  shall  pay  the  highest 
rate  of  interest  to  the  state  for  such  deposit,  to  the  credit  of 
the  state  comptroller  on  account  of  the  transfer  tax.  And 


LAWS  OF   1905,   CHAP.    368  493 

every  such  bank,  banking  house  or  trust  company,  shall  execute 
and  file  in  his  office  an  undertaking  to  the  state,  in  the  sum,  and 
with  such  sureties,  as  are  required  and  approved  by  the  comp- 
troller, for  the  safe  keeping  and  prompt  payment  on  legal  de- 
mand therefor  of  all  such  moneys  held  by  or  on  deposit  in  such 
bank,  banking  house  or  trust  company,  with  interest  thereon 
on  daily  balances  at  such  rate  as  the  comptroller  may  fix.  Every 
such  undertaking  shall  have  endorsed  thereon,  or  annexed 
thereto,  the  approval  of  the  attorney  general  as  to  its  form. 
The  state  comptroller  shall  on  the  first  day  of  each  month  make 
a  verified  return  to  the  state  treasurer  of  all  taxes  received  by 
him  under  this  article,  stating  for  what  estate,  and  by  whom  and 
when  paid;  and  shall  credit  himself  with  all  expenditures  made 
since  his  last  previous  return  on  account  of  such  taxes,  for 
salary,  refunds,  or  other  purposes  lawfully  chargeable  thereto. 
He  shall  at  the  same  time  pay  to  the  state  treasurer  the  balance 
of  such  taxes  remaining  in  his  hands  at  the  close  of  business  on 
the  last  day  of  the  previous  month,  as  appears  from  such  returns. 

§  241.  Application  of  taxes. — All  taxes  levied  and  collected 
under  this  article  when  paid  into  the  treasury  of  the  state  shall 
be  applicable  to  the  expenses  of  the  state  government  and  to 
such  other  purposes  as  the  legislature  shall  by  law  direct. 

§  242.  Definitions. — The  words  "estate"  and  "property," 
as  used  in  this  article,  shall  be  taken  to  mean  the  property  or 
interest  therein  of  the  testator,  intestate,  grantor,  bargainer 
or  vendor,  passing  or  transferred  to  those  not  herein  specifically 
exempted  from  the  provisions  of  this  article,  and  not  as  the 
property  or  interest  therein  passing  or  transferred  to  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees, 
and  shall  include  all  property  or  interest  therein,  whether  sit- 
uated within  or  without  this  state.  The  word  "transfer,"  as 
used  in  this  article,  shall  be  taken  to  include  the  passing  of 
property  or  any  interest  therein  in  possession  or  enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  bequest, 
grant,  deed,  bargain,  sale  or  gift,  in  the  manner  herein  pre- 
scribed. The  words  "county  treasurer"  and  "district  attor- 
ney," as  used  in  this  article,  shall  be  taken  to  mean  the  treasurer 
or  the  district  attorney  of  the  county  of  the  surrogate  having 
jurisdiction  as  provided  hi  section  two  hundred  and  twenty- 
eight  of  this  article. 

§  243.  Exemptions  in  article  one  not  applicable. — The  ex- 
emptions enumerated  in  section  four  of  the  tax  law,  of  which 


494  PRIOR   STATUTES 

this  article  is  a  part,  shall  not  be  construed  as  being  applicable 
in  any  manner  to  the  provisions  of  article  ten  hereof. 

§  2.  This  act  shall  take  effect  June  first,  nineteen  hundred 
and  five. 

Amendment  by  Laws  of  1908,  Chap.  310, 

In  effect  May  18,  1908,  amends  sections  220,  221,  227,  229,  232,  235, 

and  237  so  as  to  read  as  follows: 

§  220.  Taxable  transfers. — A  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of 
five  hundred  dollars  or  over,  or  of  any  interest  therein  or  income  there- 
from, in  trust  or  otherwise,  to  persons  or  corporations  not  exempt  by 
law  from  taxation  on  real  or  personal  property,  in  the  following  cases. 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  dying  seized  or  possessed  of  the  property  while  a 
resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within 
the  state,  and  the  decedent  was  a  nonresident  of  the  state  at  the  time 
of  his  death. 

2-a.  Whenever  the  property  of  a  resident  decedent,  or  the  property 
of  a  nonresident  decedent  within  this  state,  transferred  by  will,  is  not 
specifically  bequeathed  or  devised,  such  property  shall,  for  the  purposes 
of  this  act,  be  deemed  to  be  transferred  proportionately  to,  and  divided 
pro  rata  among  all  the  general  legatees  and  devisees  named  in  said 
decedent's  will,  including  all  transfers  under  a  residuary  clause  of  such 
will. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a 
nonresident  when  such  nonresident's  property  is  within  this  state, 
by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  the  death 
of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

4.  When  any  such  person  or  corporation  becomes  beneficially  en- 
titled, in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage 
of  this  act. 

5.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either 
before  or  after  the  passage  of  this  act,  such  appointment  when  made 
shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this  act  in 
the  same  manner  as  though  the  property  to  which  such  appointment 
relates  belonged  absolutely  to  the  donee  of  such  power  and  had  been 
bequeathed  or  devised  by  such  donee  by  will;  and  whenever  any  per- 
son or  corporation  possessing  such  a  power  of  appointment  so  derived 
shall  omit  or  fail  to  exercise  the  same  within  the  tune  provided  there- 


LAWS   OF    1908,    CHAP.    310  495 

for,  in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this 
act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or 
failure,  in  the  same  manner  as  though  the  persons  or  corporations 
thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the  prop- 
erty to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at 
the  time  of  such  omission  or  failure. 

6.  The  tax  imposed  hereby  shall  be  at  the  rate  of  five  per  centum 
upon  the  clear  market  value  of  such  property,  except  as  otherwise  pre- 
scribed in  the  next  section.  • 

§  221.  Exceptions  and  limitations. — When  property  real  or  personal 
or  any  beneficial  interest  therein,  of  the  value  of  less  than  ten  thousand 
dollars,  passes  by  any  such  transfer  to  or  for  the  use  of  any  father, 
mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son 
or  the  husband  of  a  daughter,  or  any  child  or  children  adopted  as  such 
in  conformity  with  the  laws  of  this  state,  of  the  decedent,  grantor, 
donor  or  vendor,  or  to  any  child  to  whom  any  such  decedent,  grantor, 
donor  or  vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood 
in  the  mutually  acknowledged  relation  of  a  parent,  provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday  and 
was  continuous  for  said  ten  years  thereafter,  and  provided  also  that, 
except  in  the  case  of  a  stepchild,  the  parents  of  such  child  shall  be  de- 
ceased when  such  relationship  commenced,  or  to  any  lineal  descendent 
of  such  decedent,  grantor,  donor  or  vendor  born  in  lawful  wedlock,  such 
transfer  of  property  shall  not  be  taxable  under  this  act;  if  real  or  per- 
sonal property,  or  any  beneficial  interest  therein,  so  transferred  is  of 
the  value  of  ten  thousand  dollars  or  more,  it  shall  be  taxable  under 
this  act  at  the  rate  of  one  per  centum  upon  the  clear  market  value  of 
such  property.  But  any  property  devised  or  bequeathed  to  any  person 
who  is  a  bishop  or  to  any  religious,  educational,  charitable,  missionarj', 
benevolent,  hospital  or  infirmary  corporation  including  corporations 
organized  exclusively  for  bible  or  tract  purposes  shall  be  exempted 
from  and  not  subject  to  the  provisions  of  this  act.  There  shall  also  be 
exempted  from  and  not  subject  to  the  provisions  of  this  act  personal 
property  other  than  money  or  securities  bequeathed  to  a  corporation 
or  association  organized  exclusively  for  the  moral  or  mental  improve- 
ment of  men  or  women,  or  for  scientific,  literary,  library,  patriotic, 
cemetery  or  historical  purposes  or  for  the  enforcement  of  laws  relating 
to  children  or  animals  or  for  two  or  more  of  such  purposes  and  used 
exclusively  for  carrying  out  one  or  more  of  such  purposes.  But  no 
such  corporation  or  association  shall  be  entitled  to  such  exemption  if 
any  officer,  member  or  employee  thereof  shall  receive  or  may  be  law- 
fully entitled  to  receive  any  pecuniary  profit  from  the  operations 
thereof  except  reasonable  compensation  for  sendees  in  effecting  one 
or  more  of  such  purposes  or  as  proper  beneficiaries  of  its  strictly  chari- 
table purposes;  or  if  the  organization  thereof  for  any  such  avowed  pur- 


496  PRIOR   STATUTES 

pose  be  a  guise  or  pretense  for  directly  or  indirectly  making  any  other 
pecuniary  profit  for  such  corporation  or  association  or  for  any  of  its 
members  or  employees  or  if  it  be  not  in  good  faith  organized  or  con- 
ducted exclusively  for  one  or  more  of  such  purposes. 

§  227.  Liability  of  certain  corporations  to  tax. — If  a  foreign  execu- 
tor, administrator  or  trustee  shall  assign  or  transfer  any  stock  or  obli- 
gations in  this  state  standing  in  the  name  of  a  decedent,  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  state 
comptroller  or  the  treasurer  of  the  proper  county  on  the  transfer 
thereof.  No  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution,  person  or  persons  having  in  possession  or  under 
control  securities,  deposits,  or  other  assets  belonging  to  or  standing  in 
the  name  of  a  decedent  who  was  a  resident  or  nonresident,  or  belonging 
to,  or  standing  in  the  joint  names  of  such  a  decedent  and  one  or  more 
persons,  including  the  shares  of  the  capital  stock  of,  or  other  interests 
in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer  herein  provided,  shall 
deliver  or  transfer  the  same  to  the  executors,  administrators  or  legal 
representatives  of  said  decedent,  or  to  the  survivor  or  survivors  when 
held  in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or  upon 
their  order  or  request,  unless  notice  of  the  time  and  place  of  such  in- 
tended delivery  or  transfer  be  served  upon  the  state  comptroller  at 
least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  such 
safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  deliver  or  transfer  any  securities,  deposits 
or  other  assets  belonging  to  or  standing  in  the  name  of  a  decedent, 
or  belonging  to,  or  standing  in  the  joint  names  of  a  decedent  and  one 
or  more  persons,  including  the  shares  of  the  capital  stock  of,  or  other 
interests  in,  the  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer,  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and 
interest  which  may  thereafter  be  assessed  on  account  of  the  delivery 
or  transfer  of  such  securities,  deposits  or  other  assets,  including  the 
shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution  mak- 
ing the  delivery  or  transfer,  under  the  provisions  of  this  article,  unless 
the  state  comptroller  consents  thereto  in  writing.  And  it  shall  be 
lawful  for  the  said  state  comptroller,  personally  or  by  representative, 
to  examine  said  securities,  deposits  or  assets  at  the  time  of  such  de- 
livery or  transfer.  Failure  to  serve  such  notice  or  failure  to  allow  such 
examination,  or  failure  to  retain  a  sufficient  portion  or  amount  to  pa}' 
such  tax  and  interest  as  herein  provided  shall  render  said  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution, 
person  or  persons  liable  to  the  payment  of  the  amount  of  the  tax  and 
interest  due  or  thereafter  to  become  due  upon  said  securities,  deposits  or 
other  assets,  including  the  shares  of  the  capital  stock  of,  or  other  inter- 


LAWS   OF    1908,    CHAP.    310  497 

csts  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer,  and  in  addition 
thereto,  a  penalty  of  not  less  than  five  or  more  than  twenty-five  thou- 
sand dollars;  and  the  payment  of  such  tax  and  interest  thereon,  or  of 
the  penalty  above  prescribed,  or  both,  may  be  enforced  in  an  action 
brought  by  the  state  comptroller  in  any  court  of  competent  jurisdiction. 

§  229.  Appointment  of  appraisers,  stenographers,  et  cetera. — The 
state  comptroller  shall  appoint  and  may  at  pleasure  remove  not  to 
exceed  six  persons  in  the  county  of  New  York;  two  persons  in  the 
county  of  Kings,  and  one  person  in  the  counties  of  Albany,  Dutchess, 
Erie,  Monroe,  Nassau,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer, 
Richmond,  Suffolk  and  Westchester,  to  act  as  appraisers  therein.  The 
appraisers  so  appointed  shall  receive  an  annual  salary  to  be  fixed  by 
the  state  comptroller,  together  with  their  actual  and  necessary  travel- 
ing expenses  and  witness  fees,  as  hereinafter  provided,  payable  monthly 
by  the  state  comptroller  out  of  any  funds  in  his  hands  or  custody  on 
account  of  transfer  tax.  The  salaries  of  each  of  the  appraisers  so  ar> 
pointed  shall  not  exceed  the  following  amounts:  In  New  York  county, 
four  thousand  dollars;  in  Kings  county,  four  thousand  dollars;  ha  Erie 
county,  three  thousand  dollars;  in  Westchester  and  Albany  counties, 
twenty-five  hundred  dollars;  in  Nassau  county,  two  thousand  dollars; 
in  Queens,  Monroe  and  Onondaga  counties,  one  thousand  five  hundred 
dollars;  in  Dutchess,  Oneida,  Orange,  Rensselaer  and  Suffolk  counties, 
one  thousand  dollars,  and  in  Richmond  county,  five  hundred  dollars. 
Each  of  the  said  appraisers  shall  file  with  the  state  comptroller  his 
oath  of  office  and  his  official  bond  in  the  penal  sum  of  not  less  than 
one  thousand  dollars,  in  the  discretion  of  the  state  comptroller,  con- 
ditioned for  the  faithful  performance  of  his  duties  as  such  appraiser, 
which  bond  shall  be  approved  by  the  attorney-general  and  the  state 
comptroller.  The  state  comptroller  shall  retain  out  of  any  funds  in 
his  hands  on  account  of  said  tax  the  following  amounts:  First,  a  sum 
sufficient  to  provide  the  appraisers  of  New  York  county  with  five  sten- 
nographers,  four  clerks  and  an  examiner  of  values,  of  Kings  county  with 
two  stenographers,  and  of  Erie  county  with  one  clerk,  appointed  by 
the  state  comptroller,  whose  salary  shall  not  exceed  fifteen  hundred 
dollars  a  year  each.  Second,  a  sum  to  be  used  in  defraying  the  expenses 
for  office  rent,  stationery,  postage,  process  serving,  et  cetera,  neces- 
sarily incurred  in  the  appraisal  of  estates,  not  exceeding  ten  thousand 
five  hundred  dollars  a  year  in  New  York  county,  and  one  thousand 
five  hundred  dollars  a  year  in  Kings  county. 

§  232.  Appeal  and  other  proceedings. — The  state  comptroller  or 
any  person  dissatisfied  with  the  appraisement  or  assessment  and  de- 
termination of  tax  may  appeal  therefrom  to  the  surrogate  within  sixty 
days  from  the  fixing,  assessing  and  determination  of  tax  by  the  surro- 
gate as  herein  provided,  upon  filing  in  the  office  of  the  surrogate  a 
written  notice  of  appeal,  which  shall  state  the  grounds  upon  which 
32 


498  PRIOR   STATUTES 

the  appeal  is  taken;  but  no  costs  shall  be  allowed  by  the  surrogate  on 
such  appeal.  Within  two  years  after  the  entry  of  an  order  or  decree 
of  a  surrogate  determining  the  value  of  an  estate  and  assessing  the 
tax  thereon,  the  state  comptroller  may,  if  he  believes  that  such  ap- 
praisal, assessment  or  determination  has  been  fraudulently,  collusively, 
or  erroneously  made,  make  application  to  a  justice  of  the  supreme 
court  of  the  judicial  district  embracing  the  surrogate's  court  in  which 
the  order  or  decree  has  been  filed,  for  a  reappraisal  thereof.  The  jus- 
tice to  whom  such  application  is  made  may  thereupon  appoint  a  com- 
petent person  to  reappraise  such  estate.  Such  appraiser  shall  possess 
the  powers  and  be  subject  to  the  duties  of  an  appraiser  under  section 
two  hundred  and  thirty  and  shall  receive  compensation  at  the  rate  of 
five  dollars  per  day  for  every  day  actually  and  necessarily  employed  in 
such  appraisal.  Such  compensation  shall  be  payable  by  the  state 
comptroller  or  county  treasurer  out  of  any  funds  he  may  have  on  ac- 
count of  any  tax  imposed  under  the  provisions  of  this  article,  upon 
the  certificate  of  the  justice  appointing  him.  The  report  of  such  ap- 
praiser shall  be  filed  with  the  justice  by  whom  he  was  appointed,  and 
thereafter  the  same  proceedings  shall  be  taken  and  had  by  and  before 
such  justice  as  are  herein  provided  to  be  taken  and  had  by  and  before 
the  surrogate.  The  determination  and  assessment  of  such  justice  shall 
supersede  the  determination  and  assessment  of  the  surrogate,  and 
shall  be  filed  by  such  justice  in  the  office  of  the  state  comptroller,  and 
a  certified  copy  thereof  transmitted  to  the  surrogate's  court  of  the 
proper  county. 

§  235.  Proceedings  by  district  attorneys. — If,  after  the  expiration 
of  eighteen  months  from  the  accrual  of  any  tax  under  this  article, 
such  tax  shall  remain  due  and  unpaid,  after  the  refusal  or  neglect  of 
the  persons  liable  therefor  to  pay  the  same,  the  state  comptroller  shall 
notify  the  district  attorney  of  the  county,  in  writing,  of  such  failure 
or  neglect,  and  such  district  attorney  shall  apply  to  the  surrogate's 
court  for  a  citation,  citing  the  persons  liable  to  pay  such  tax  to  appear 
before  the  court  on  the  day  specified,  not  more  than  three  months  after 
the  date  of  such  citation,  and  show  cause  why  the  tax  should  not  be 
paid.  The  surrogate,  upon  such  application,  and  whenever  it  shall 
appear  to  him  that  any  such  tax  accruing  under  this  article  has  not 
been  paid  as  required  by  law,  shall  issue  such  citation  and  the  service 
of  such  citation,  and  the  time,  manner  and  proof  thereof,  and  the  hear- 
ing and  determination  thereon  and  the  enforcement  of  the  determina- 
tion or  order  made  by  the  surrogate  shall  conform  to  the  provisions 
of  the  code  of  civil  procedure  for  the  service  of  citations  out  of  the  sur- 
rogate's court,  and  the  hearing  and  determination  thereon  and  its 
enforcement  so  far  as  the  same  may  be  applicable.  The  surrogate 
or  his  clerk  shall,  upon  request  of  the  district  attorney  or  the  state 
comptroller,  furnish,  without  fee,  one  or  more  transcripts  of  such 
decree;  which  shall  be  docketed  and  filed  by  the  county  clerk  of  any 


LAWS  OF    1908,   CHAP.   310  499 

county  of  the  state  without  fee,  in  the  same  manner  and  with  the  same 
effect  as  provided  by  law  for  filing  and  docketing  transcripts  of  decrees 
of  the  surrogate's  court.  The  cost  awarded  by  any  such  decree  after 
the  collection  and  payment  of  the  tax  to  the  state  comptroller  or  county 
treasurer  may  be  retained  by  the  district  attorney  for  his  own  use. 
Such  costs  shall  be  fixed  by  the  surrogate  in  his  discretion,  but  shall 
not  exceed  in  any  case  where  there  has  not  been  a  contest,  the  sum  of 
one  hundred  dollars,  or  where  there  has  been  a  contest  the  sum  of 
two  hundred  and  fifty  dollars.  Whenever  the  surrogate  shall  certify 
that  there  was  probable  cause  for  issuing  a  citation  and  taking  the 
proceedings  specified  in  this  section,  the  state  comptroller,  after  the 
same  shall  have  been  audited  by  him,  shall  pay  all  expenses  incurred 
for  the  service  of  citations  and  other  lawful  disbursements  not  other- 
wise paid,  from  funds  in  his  hands  on  account  of  such  tax,  or  hi  a 
county  in  which  the  office  of  appraiser  is  not  salaried,  by  a  warrant 
upon  the  county  treasurer  of  such  county  for  the  payment  by  him  of 
the  same  from  funds  in  his  hands  on  account  of  such  tax.  In  proceed- 
ings to  which  the  state  comptroller  is  cited  as  a  party  under  sections 
two  hundred  and  twenty-eight  and  two  hundred  and  thirty  of  this 
article,  he  is  authorized  to  designate  and  retain  counsel  to  represent 
him  to  pay  the  expenses  thereby  incurred  out  of  the  funds  which  may 
be  in  his  hands  on  account  of  this  tax  hi  any  case  in  a  county  where 
the  office  of  appraiser  is  salaried,  and  in  any  other  county  the  state 
comptroller  shall  by  warrant  direct  the  county  treasurer  to  pay  such 
expenses  out  of  any  funds  which  may  be  in  his  hands  on  account  of 
this  tax;  provided,  however,  that  in  the  collection  of  taxes  upon  estates 
of  nonresident  decedents  the  state  comptroller  shall  not  allow  for 
legal  services  up  to  and  including  the  entry  of  the  order  of  the  surro- 
gate fixing  the  tax  a  sum  exceeding  ten  per  centum  of  the  taxes  and 
penalties  collected. 

§  237.  Fees  of  county  treasurer. — The  treasurer  of  each  county 
in  which  the  office  of  appraiser  is  not  salaried  shall  be  allowed  to  retain 
on  all  taxes  paid  and  accounted  for  by  him  each  fiscal  year  under  this 
article,  five  per  centum  on  the  first  fifty  thousand  dollars,  two  and  one- 
half  per  centum  on  the  next  fifty  thousand  dollars,  and  one  per  centum 
on  all  additional  sums.  Such  fees  shall  be  in  addition  to  the  salaries 
and  fees  now  allowed  by  law  to  such  officers. 


500  PRIOR  STATUTES 

t 

Laws  of  1909,  Chap.  62,  in  effect  February  17,  1909. 

ARTICLE  10. 
TAXABLE  TRANSFERS. 

Section  220.  Taxable  transfers. 

221.  Exceptions  and  limitations. 

222.  Accrual  and  payment  of  tax. 

223.  Discount  and  interest. 

224.  Lien  of  tax  and  collection  by  executors,  adminis- 

trators and  trustees. 

225.  Refund  of  tax  erroneously  paid. 

226.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 

missions. 

227.  Liability  of  certain  corporations  to  tax. 

228.  Jurisdiction  of  the  surrogate. 

229.  Appointment  of  appraisers,   stenographers  and 

clerks. 

230.  Proceedings  by  appraiser. 

231.  Determination  of  surrogate. 

232.  Appeal  and  other  proceedings. 

233.  Composition  of  transfer  tax  upon  certain  estates. 

234.  Surrogates'  assistants  in  New  York,  Kings  and 

other  counties. 

235.  Proceedings  by  district  attorneys. 

236.  Receipts  from  county  treasurer  or  comptroller. 

237.  Fees  of  county  treasurer. 

238.  Books  and  forms  to  be  furnished  by  the  state 

comptroller. 

239.  Reports  of  surrogate  and  county  clerk. 

240.  Reports  of  county  treasurer. 

241.  Report  of  state  comptroller;  payment  of  taxes. 

242.  Application  of  taxes. 

243.  Definitions. 

244.  Exemptions  in  article  one  not  applicable. 

245.  Limitation  of  time. 

§  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby  im- 
posed upon  the  transfer  of  any  property,  real  or  personal,  of 
the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 


LAWS   OP    1909,    CHAP.    62  501 

therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons 
or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of 
this  state  from  any  person  dying  seized  or  possessed  of  the 
property  while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property 
within  the  state,  and  the  decedent  was  a  nonresident  of  the 
state  at  the  time  of  his  death. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the 
property  of  a  nonresident  decedent  within  this  state,  trans- 
ferred by  will,  is  not  specifically  bequeathed  or  devised,  such 
property  shall,  for  the  purposes  of  this  article,  be  deemed  to  be 
transferred  proportionately  to,  and  divided  pro  rata  among  all 
the  general  legatees  and  devisees  named  in  said  decedent's  will, 
including  all  transfers  under  a  residuary  clause  of  such  will. 

4.  When  the  transfer  is  of  property  made  by  a  resident  or 
by  a  nonresident  when  such  nonresident's  property  is  within 
this  state,  by  deed,  grant,  bargain,  sale  or  gift  made  hi  con- 
templation of  the  death  of  the  grantor,  vendor  or  donor,  or  in- 
tended to  take  effect  hi  possession  or  enjoyment  at  or  after 
such  death. 

5.  When  any  such  person  or  corporation  becomes  beneficially 
entitled,  in  possession  or  expectancy,  to  any  property  or  the 
income  thereof  by  any  such  transfer,  whether  made  before  or 
after  the  passage  of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise  a  power 
of  appointment  derived  from  any  disposition  of  property  made 
either  before  or  after  the  passage  of  this  chapter,  such  appoint- 
ment when  made  shall  be  deemed  a  transfer  taxable  under  the 
provisions  of  this  chapter  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely 
to  the  donee  of  such  power  and  had  been  bequeathed  or  devised 
by  such  donee  by  will;  and  whenever  any  person  or  corporation 
possessing  such  a  power  of  appointment  so  derived  shall  omit 
or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of 
this  chapter  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though  the  persons 
or  corporations  thereby  becoming  entitled  to  the  possession  or 
enjoyment  of  the  property  to  which  such  power  related  had 
succeeded  thereto  by  a  will  of  the  donee  of  the  power  failicg 


502  PRIOR  STATUTES 

to  exercise  such  power,  taking  effect  at  the  time  of  such  omis- 
sion or  failure. 

7.  The  tax  imposed  hereby  shall  be  at  the  rate  of  five  per 
centum  upon  the  clear  market  value  of  such  property,  except  as 
otherwise  prescribed  in  the  next  section. 

§  221.  Exceptions  and  limitations. — When  property,  real 
or  personal,  or  any  beneficial  interest  therein,  of  the  value  of 
less  than  ten  thousand  dollars,  passes  by  any  such  transfer 
to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daugh- 
ter, or  any  child  or  children  adopted  as  such  in  conformity  with 
the  laws  of  this  state,  of  the  decedent,  grantor,  donor  or  vendor, 
or  to  any  child  to  whom  any  such  decedent,  grantor,  donor  or 
vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood 
in  the  mutually  acknowledged  relation  of  a  parent,  provided, 
however,  such  relationship  began  at  or  before  the  child's  fif- 
teenth birthday,  and  was  continuous  for  said  ten  years  there- 
after, and  provided  also  that,  except  in  the  case  of  a  stepchild, 
the  parents  of  such  child  shall  have  been  deceased  when  such 
relationship  commenced,  or  to  any  lineal  descendant  of  such 
decedent,  grantor,  donor  or  vendor  born  in  lawful  wedlock, 
such  transfer  of  property  shall  not  be  taxable  under  this  article; 
if  real  or  personal  property,  or  any  beneficial  interest  therein, 
so  transferred  is  of  the  value  of  ten  thousand  dollars  or  more, 
it  shall  be  taxable  under  this  article  at  the  rate  of  one  per  cen- 
tum upon  the  clear  market  value  of  such  property.  But  any 
property  devised  or  bequeathed  to  any  person  who  is  a  bishop 
or  to  any  religious,  educational,  charitable,  missionary,  benevo- 
lent, hospital  or  infirmary  corporation,  including  corporations 
organized  exclusively  for  bible  or  tract  purposes,  shall  be  ex- 
empted from  and  not  subject  to  the  provisions  of  this  article. 
There  shall  also  be  exempted  from  and  not  subject  to  the  provi- 
sions of  this  article  personal  property  other  than  money  or 
securities  bequeathed  to  a  corporation  or  association  organized 
exclusively  for  the  moral  or  mental  improvement  of  men  or 
women  or  for  scientific,  literary,  library,  patriotic,  cemetery  or 
historical  purposes  or  for  the  enforcement  of  laws  relating  to 
children  or  animals  or  for  two  or  more  of  such  purposes  and 
used  exclusively  for  carrying  out  one  or  more  of  such  purposes. 
But  no  such  corporation  or  association  shall  be  entitled  to  such 
exemption  if  any  officer,  member  or  employee  thereof  shall  re- 
ceive or  may  be  lawfully  entitled  to  receive  any  pecuniary 


LAWS  OF    1909,   CHAP.    62  503 

profit  from  the  operations  thereof  except  reasonable  compensa- 
tion for  services  in  effecting  one  or  more  of  such  purposes  or  as 
proper  beneficiaries  of  its  strictly  charitable  purposes;  or  if 
the  organization  thereof  for  any  such  avowed  purpose  be  a 
guise  or  pretense  for  directly  or  indirectly  making  any  other 
pecuniary  profit  for  such  corporation  or  association  or  for  any 
of  its  members  or  employees  or  if  it  be  not  in  good  faith  or- 
ganized or  conducted  exclusively  for  one  or  more  of  such  pur- 
poses. 

§  222.  Accrual  and  payment  of  tax. — Ah1  taxes  imposed  by 
this  article  shall  be  due  and  payable  at  the  time  of  the  transfer, 
except  as  herein  otherwise  provided.  Taxes  upon  the  transfer 
of  any  estate,  property  or  interest  therein  limited,  conditioned, 
dependent  or  determinable  upon  the  happening  of  any  contin- 
gency or  future  event  by  reason  of  which  the  fair  market  value 
thereof  can  not  be  ascertained  at  the  time  of  the  transfer  as 
herein  provided,  shall  accrue  and  become  due  and  payable  when 
the  persons  or  corporations  beneficially  entitled  thereto  shall 
come  into  actual  possession  or  enjoyment  thereof.  Such  tax 
shall  be  paid  to  the  state  comptroller  in  a  county  in  which  the 
office  of  appraiser  is  salaried,  and  in  other  counties,  to  the 
county  treasurer,  and  said  state  comptroller  or  county  treasurer 
shall  give,  and  every  executor,  administrator  or  trustee  shall 
take,  duplicate  receipts  from  him  of  such  payment  as  provided 
in  section  two  hundred  and  thirty-six. 

§  223.  Discount  and  interest. — If  such  tax  is  paid  within 
six  months  from  the  accrual  thereof,  a  discount  of  five  per 
centum  shall  be  allowed  and  deducted  therefrom.  If  such  tax 
is  not  paid  within  eighteen  months  from  the  accrual  thereof, 
interest  shall  be  charged  and  collected  thereon  at  the  rate  of 
ten  per  centum  per  annum  from  the  time  the  tax  accrued; 
unless  by  reason  of  claims  made  upon  the  estate,  necessary 
litigation  or  other  unavoidable  cause  of  delay,  such  tax  can  not 
be  determined  and  paid  as  herein  provided,  in  which  case  in- 
terest at  the  rate  of  six  per  centum  per  annum  shall  be  charged 
upon  such  tax  from  the  accrual  thereof  until  the  cause  of  such 
delay  is  removed,  after  which  ten  per  centum  shall  be  charged. 

§  224.  Lien  of  tax  and  collection  by  executors,  adminis- 
trators and  trustees. — Every  such  tax  shall  be  and  remain  a 
lien  upon  the  property  transferred  until  paid  and  the  person 
to  whom  the  property  is  so  transferred,  and  the  executors, 
administrators  and  trustees  of  every  estate  so  transferred  shall 


504  PRIOR   STATUTES 

be  personally  liable  for  such  tax  until  its  payment.  Every  execu- 
tor, administrator  or  trustee  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  him  to  pay 
such  tax  in  the  same  manner  as  he  might  be  entitled  by  law  to 
do  for  the  payment  of  the  debts  of  the  testator  or  intestate. 
Any  such  executor,  administrator  or  trustee  having  in  charge 
or  in  trust  any  legacy  or  property  for  distribution  subject  to 
such  tax  shall  deduct  the  tax  therefrom  and  shall  pay  over  the 
same  to  the  state  comptroller  or  county  treasurer,  as  herein 
provided.  If  such  legacy  or  property  be  not  in  money,  he  shall 
collect  the  tax  thereon  upon  the  appraised  value  thereof  from 
the  person  entitled  thereto.  He  shall  not  deliver  or  be  com- 
pelled to  deliver  any  specific  legacy  or  property  subject  to  tax 
under  this  article  to  any  person  until  he  shall  have  collected 
the  tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or 
payable  out  of  real  property,  the  heir  or  devisee  shall  deduct 
such  tax  therefrom  and  pay  it  to  the  executor,  administrator 
or  trustee,  and  the  tax  shall  remain  a  lien  or  charge  on  such  real 
property  until  paid;  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  payment  of  the  legacy  might  be  enforced,  or  by  the  dis- 
trict attorney  under  section  two  hundred  and  thirty-five  of 
this  chapter.  If  any  such  legacy  shall  be  given  in  money  to 
any  such  person  for  a  limited  period,  the  executor,  administrator 
or  trustee  shall  retain  the  tax  upon  the  whole  amount,  but  if  it 
be  not  in  money,  he  shall  make  application  to  the  court  having 
jurisdiction  of  an  accounting  by  him,  to  make  an  apportion- 
ment, if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands 
by  such  legatees,  and  for  such  further  order  relative  thereto  as 
the  case  may  require. 

§  225.  Refund  of  tax  erroneously  paid. — If  any  debts  shall 
be  proven  against  the  estate  of  a  decedent  after  the  payment  of 
any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the 
person  entitled  to  such  legacy  or  distributive  share,  and  such 
person  is  required  by  order  of  the  surrogate  having  jurisdiction, 
on  notice  to  the  state  comptroller,  to  refund  the  amount  of 
such  debts  or  any  part  thereof,  an  equitable  proportion  of  the 
tax  shall  be  repaid  to  him  by  the  executor,  administrator  or 
trustee,  if  the  tax  has  not  been  paid  to  the  state  comptroller 
or  county  treasurer;  or  if  such  tax  has  been  paid  to  such  state 
comptroller  or  county  treasurer,  such  officer  shall  refund  out  of 


LAWS    OP    1909,    CHAP.    62  505 

the  funds  in  his  hands  or  custody  to  the  credit  of  such  taxes 
such  equitable  proportion  of  the  tax,  and  credit  himself  with 
the  same  in  the  account  required  to  be  rendered  by  him  under 
this  article.  If  after  the  payment  of  any  tax  in  pursuance  of  an 
order  fixing  such  tax,  made  by  the  surrogate  having  jurisdiction, 
such  order  be  modified  or  reversed  within  two  years  from  and 
after  the  date  of  entry  of  the  order  fixing  the  tax,  on  due  notice 
to  the  state  comptroller,  the  state  comptroller  shall,  if  such  tax 
was  paid  in  a  county  in  which  the  office  of  appraiser  is  salaried, 
refund  to  the  executor,  administrator,  trustee,  person  or  persons 
by  whom  such  tax  was  paid,  the  amount  of  any  moneys  paid 
or  deposited  on  account  of  such  tax  in  excess  of  the  amount  of 
the  tax  fixed  by  the  order  modified  or  reversed,  out  of  the  funds 
in  his  hands  or  custody  to  the  credit  of  such  taxes,  and  to  credit 
himself  with  the  same  in  the  account  required  to  be  rendered 
by  him  under  this  article,  or  if  paid  in  a  county  in  which  the 
office  of  appraiser  is  not  salaried,  he  shall  by  warrant  direct  and 
allow  the  county  treasurer  of  the  county  to  refund  such  amount 
in  the  same  manner;  but  no  application  for  such  refund  shall 
be  made  after  one  year  from  such  reversal  or  modification,  and 
the  representatives  of  the  estate,  legatees,  devisees  or  distribu- 
tees entitled  to  any  refund  under  this  section  shall  not  be  en- 
titled to  any  interest  upon  such  refund,  and  the  state  comp- 
troller shall  deduct  from  the  fees  allowed  by  this  article  to  the 
county  treasurer  the  amount  theretofore  allowed  him  upon  such 
overpayment.  Where  it  shall  be  proved  to  the  satisfaction  of 
the  surrogate  that  deductions  for  debts  were  allowed  upon  the 
appraisal,  since  proved  to  have  been  erroneously  allowed,  it 
shall  be  lawful  for  such  surrogate  to  enter  an  order  assessing 
the  tax  upon  the  amount  wrongfully  or  erroneously  deducted. 

§  226.  Taxes  upon  devises  and  bequests  in  lieu  of  commis- 
sions.— If  a  testator  bequeaths  or  devises  property  to  one  or 
more  executors  or  trustees  in  lieu  of  their  commissions  or  al- 
lowances, or  makes  them  his  legatees  to  an  amount  exceeding 
the  commissions  or  allowances  prescribed  by  law  for  an  executor 
or  trustee,  the  excess  in  value  of  the  property  so  bequeathed 
or  devised  above  the  amount  of  commissions  or  allowances 
prescribed  by  law  in  similar  cases  shall  be  taxable  under  this 
article. 

§  227.  Liability  of  certain  corporations  to  tax. — If  a  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligations  in  this  state  standing  in  the  name  of  a 


506  PRIOR  STATUTES 

decedent,  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the 
tax  shall  be  paid  to  the  state  comptroller  or  the  treasurer  of 
the  proper  county  on  the  transfer  thereof.  No  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institu- 
tion, person  or  persons  having  in  possession  or  under  control 
securities,  deposits,  or  other  assets  belonging  to  or  standing  in 
the  name  of  a  decedent  who  was  a  resident  or  nonresident,  or 
belonging  to,  or  standing  in  the  joint  names  of  such  a  decedent 
and  one  or  more  persons,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making  the 
delivery  or  transfer  herein  provided,  shall  deliver  or  transfer 
the  same  to  the  executors,  administrators  or  legal  representa- 
tives of  said  decedent,  or  to  the  survivor  or  survivors  when  held 
in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or 
upon  their  order  or  request,  unless  notice  of  the  time  and  place 
of  such  intended  delivery  or  transfer  be  served  upon  the  state 
comptroller  at  least  ten  days  prior  to  said  delivery  or  transfer; 
nor  shall  any  such  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution,  person  or  persons  deliver 
or  transfer  any  securities,  deposits  or  other  assets  belonging  to 
or  standing  in  the  name  of  a  decedent,  or  belonging  to,  or  stand- 
ing in  the  joint  names  of  a  decedent  and  one  or  more  persons, 
including  the  shares  of  the  capital  stock  of,  or  other  interests 
in,  the  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax 
and  interest  which  may  thereafter  be  assessed  on  account  of 
the  delivery  or  transfer  of  such  securities,  deposits  or  other 
assets,  including  the  shares  of  the  capital  stock  of,  or  other  in- 
terests in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution  making  the  delivery  or  transfer, 
under  the  provisions  of  this  article,  unless  the  state  comptroller 
consents  thereto  in  writing.  And  it  shall  be  lawful  for  the  said 
state  comptroller,  personally  or  by  representative,  to  examine 
said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or 
transfer.  Failure  to  serve  such  notice  or  failure  to  allow  such 
examination  or  failure  to  retain  a  sufficient  portion  or  amount 
to  pay  such  tax  and  interest  as  herein  provided  shall  render 
said  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution,  person  or  persons  liable  to  the  payment  of 
the  amount  of  the  tax  and  interest  due  or  thereafter  to  become 


LAWS   OF    1909,    CHAP.    62  507 

due  upon  said  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe 
deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer,  and  in  addition 
thereto,  a  penalty  of  not  less  than  five  or  more  than  twenty- 
five  thousand  dollars;  and  the  payment  of  such  tax  and  interest 
thereon,  or  of  the  penalty  above  prescribed,  or  both,  may  be 
enforced  in  an  action  brought  by  the  state  comptroller  in  any 
court  of  competent  jurisdiction. 

§  228.  Jurisdiction  of  the  surrogate. — The  surrogate's  court 
of  every  county  of  the  state  having  jurisdiction  to  grant  letters 
testamentary  or  of  administration  upon  the  estate  of  a  de- 
cedent whose  property  is  chargeable  with  any  tax  under  this 
article,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 
or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to 
hear  and  determine  all  questions  arising  under  the  provisions 
of  this  article,  and  to  do  any  act  in  relation  thereto  authorized 
by  law  to  be  done  by  a  surrogate  in  other  matters  or  proceedings 
coming  within  his  jurisdiction;  and  if  two  or  more  surrogates' 
courts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the 
surrogate  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same  to  the  exclusion  of  every  other  surrogate.  Every 
petition  for  ancillary  letters  testamentary  or  ancillary  letters 
of  administration  made  in  pursuance  of  the  provisions  of  article 
seven,  title  three,  chapter  eighteen  of  the  code  of  civil  procedure 
shall  set  forth  the  name  of  the  state  comptroller  as  a  person 
to  be  cited  as  therein  prescribed,  and  a  true  and  correct  state- 
ment of  all  the  decedent's  property  in  this  state  and  the  value 
thereof;  and  upon  the  presentation  thereof  the  surrogate  shall 
issue  a  citation  directed  to  the  state  comptroller;  and  upon  the 
return  of  the  citation  the  surrogate  shall  determine  the  amount 
of  the  tax  which  may  be  or  become  due  under  the  provisions 
of  this  article  and  his  decree  awarding  the  letters  may  contain 
any  provision  for  the  payment  of  such  tax  or  the  giving  of  secu- 
rity therefor  which  might  be  made  by  such  surrogate  if  the  state 
comptroller  were  a  creditor  of  the  decedent. 

§  229.  Appointment  of  appraisers,  stenographers  and  clerks. 
— The  state  comptroller  shall  appoint  and  may  at  pleasure  re- 
move not  to  exceed  six  persons  in  the  county  of  New  York; 
three  persons  in  the  county  of  Kings,  and  one  person  in  the 
counties  of  Albany,  Dutchess,  Erie,  Monroe,  Nassau,  Oneida, 
Onondaga,  Orange,  Queens,  Rensselaer,  Richmond,  Suffolk, 


508  PRIOR   STATUTES 

and  Westchester,  to  act  as  appraisers  therein.  The  appraisers 
so  appointed  shall  receive  an  annual  salary  to  be  fixed  by  the 
state  comptroller,  together  with  their  actual  and  necessary 
traveling  expenses  and  witness  fees,  as  hereinafter  provided, 
payable  monthly  by  the  state  comptroller  out  of  any  funds  in 
his  hands  or  custody  on  account  of  transfer  tax.  The  salaries 
of  each  of  the  appraisers  so  appointed  shall  not  exceed  the  fol- 
lowing amounts:  In  New  York  county,  four  thousand  dollars; 
in  Kings  county,  four  thousand  dollars;  in  Erie  county,  three 
thousand  dollars;  in  Westchester  and  Albany  counties,  twenty- 
five  hundred  dollars;  in  Nassau  county,  two  thousand  dollars; 
in  Queens,  Monroe  and  Onondaga  counties,  one  thousand  five 
hundred  dollars;  in  Dutchess,  Oneida,  Orange,  Rensselaer, 
Richmond  and  Suffolk  counties,  one  thousand  dollars.  Each 
of  the  said  appraisers  shall  file  with  the  state  comptroller  his 
oath  of  office  and  his  official  bond  in  the  penal  sum  of  not  less 
than  one  thousand  dollars,  in  the  discretion  of  the  state  comp- 
troller, conditioned  for  the  faithful  performance  of  his  duties 
as  such  appraiser,  which  bond  shall  be  approved  by  the  attorney- 
general  and  the  state  comptroller.  The  state  comptroller  shall 
retain  out  of  any  funds  in  his  hands  on  account  of  said  tax  the 
following  amounts:  First,  a  sum  sufficient  to  provide  the  ap- 
praisers of  New  York  County  with  six  stenographers,  three 
clerks  and  an  examiner  of  values,  of  Kings  county  with  three 
stenographers,  and  of  Erie  county  with  one  clerk,  appointed  by 
the  state  comptroller,  whose  salary  shall  not  exceed  fifteen 
hundred  dollars  a  year  each.  Second,  a  sum  to  be  used  in  de- 
fraying the  expenses  for  office  rent,  stationery,  postage,  process 
serving  and  other  similar  expenses  necessarily  incurred  in  the 
appraisal  of  estates,  not  exceeding  ten  thousand  five  hundred 
dollars  a  year  in  New  York  county,  and  three  thousand  dollars 
a  year  in  Kings  county.  (Thus  amended  by  L.  1909,  ch.  283, 
in  effect  May  4,  1909.) 

§  230.  Proceedings  by  appraiser. — In  each  county  in  which 
the  office  of  appraiser  is  not  salaried  the  county  treasurer  shall 
act  as  appraiser.  The  surrogate,  either  upon  his  own  motion, 
or  upon  the  application  of  any  interested  person,  including  the 
state  comptroller,  shall  by  order  direct  the  person  or  one  of  the 
persons  appointed  pursuant  to  section  two  hundred  and  twenty- 
nine  of  this  article  in  counties  in  which  the  office  of  appraiser 
is  salaried,  and  in  other  counties,  the  county  treasurer,  to  fix 
the  fair  market  value  of  property  of  persons  whose  estates 


LAWS   OF   1909,   CHAP.   62  509 

shall  be  subject  to  the  payment  of  any  tax  imposed  by  this 
article. 

Every  such  appraiser  shall  forth  with,  give  notice  by  mail  to 
all  persons  known  to  have  a  claim  or  interest  in  the  property 
to  be  appraised,  including  the  state  comptroller,  and  to  such 
persons  as  the  surrogate  may  by  order  direct,  of  the  time  and 
place  when  he  will  appraise  such  property.  He  shall  at  such 
time  and  place  appraise  the  same  at  its  fair  market  value  as 
herein  prescribed;  and  for  that  purpose  the  said  appraiser  is 
authorized  to  issue  subpoenas  and  to  compel  the  attendance  of 
witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof;  and 
he  shall  make  report  thereof  and  of  such  value  in  writing,  to 
the  said  surrogate,  together  with  the  depositions  of  the  wit- 
nesses examined,  and  such  other  facts  in  relation  thereto  and 
to  said  matter  as  the  surrogate  may  order  or  require.  Every 
appraiser,  except  in  the  counties  in  which  the  office  of  appraiser 
is  salaried,  for  which  provision  is  hereinbefore  made,  shall  be 
paid  by  the  state  comptroller  and  after  the  audit  of  said  state 
comptroller,  his  actual  and  necessary  traveling  expenses  and 
the  fees  paid  such  witnesses,  which  fees  shall  be  the  same  as 
those  now  paid  to  witnesses  subpoenaed  to  attend  in  courts  of 
record,  payment  to  be  made  out  of  funds  in  the  hands  of  the 
county  treasurer  of  the  proper  county  on  account  of  the  tax 
imposed  under  the  provisions  of  this  article. 

The  value  of  every  future  or  limited  estate,  income,  interest 
or  annuity  dependent  upon  any  life  or  lives  in  being,  shall  be 
determined  by  the  rule,  method  and  standard  of  mortality  and 
value  employed  by  the  superintendent  of  insurance  in  ascer- 
taining the  value  of  policies  of  life  insurance  and  annuities  for 
the  determination  of  liabilities  of  life  insurance  companies, 
except  that  the  rate  of  interest  for  making  such  computation 
shall  be  five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in  property, 
to  the  beneficial  enjoyment  or  possession  whereof  there  are  per- 
sons or  corporations  presently  entitled  thereto,  no  allowance  shall 
be  made  on  account  of  any  contingent  incumbrance  thereon, 
nor  on  account  of  any  contingency  upon  the  happening  of  which 
the  estate  or  property  or  some  part  thereof  or  interest  therein 
might  be  abridged,  defeated  or  diminished;  provided,  however, 
that  in  the  event  of  such  incumbrance  taking  effect  as  an  ac- 
tual burden  upon  the  interest  of  the  beneficiary,  or  in  the  event 


510  PRIOR   STATUTES 

of  the  abridgment,  defeat  or  diminution  of  said  estate  or  prop- 
erty or  interest  therein  as  aforesaid,  a  return  shall  be  made  to 
the  person  properly  entitled  thereto  of  a  proportionate  amount 
of  such  tax  on  account  of  the  incumbrance  when  taking  effect, 
or  so  much  as  will  reduce  the  same  to  the  amount  which  would 
have  been  assessed  on  account  of  the  actual  duration  or  extent 
of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be 
made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article. 

Where  any  property  shall,  after  the  passage  of  this  chapter, 
be  transferred  subject  to  any  charge,  estate  or  interest,  deter- 
minable  by  the  death  of  any  person,  or  at  any  period  ascer- 
tainable  only  by  reference  to  death,  the  increase  accruing  to 
any  person  or  corporation  upon  the  extinction  or  determination 
of  such  charge,  estate  or  interest,  shall  be  deemed  a  transfer  of 
property  taxable  under  the  provisions  of  this  article  in  the  same 
manner  as  though  the  person  or  corporation  beneficially  en- 
titled thereto  had  then  acquired  such  increase  from  the  person 
from  whom  the  title  to  their  respective  estates  or  interests  is 
derived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in 
part  created,  defeated,  extended  or  abridged,  a  tax  shall  be 
imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would 
be  possible  under  the  provisions  of  this  article,  and  such  tax 
so  imposed  shall  be  due  and  payable  forthwith  by  the  executors 
or  trustees  out  of  the  property  transferred;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or 
corporation  exempt  from  taxation  under  the  provisions  of  this 
article,  or  to  any  person  taxable  at  a  rate  less  than  the  rate 
imposed  and  paid,  such  person  or  corporation  shall  be  entitled 
to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the 
difference  between  the  amount  paid  and  the  amount  which 
said  person  or  corporation  should  pay  under  the  provisions  of 
this  article,  with  interest  thereon  at  the  rate  of  three  per  centum 
per  annum  from  the  time  of  payment.  Such  return  of  over- 
payment shall  be  made  in  the  manner  provided  by  section  two 
hundred  and  twenty-five  of  this  article. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and 


LAWS  OF    1909,   CHAP.    62  511 

in  which  proceedings  for  the  determination  of  the  tax  have  not 
been  taken  or  where  the  taxation  thereof  has  been  held  in 
abeyance,  shall  be  appraised  at  their  full,  undiminished  value 
when  the  persons  entitled  thereto  shall  come  into  the  beneficial 
enjoyment  or  possession  thereof,  without  diminution  for  or  on 
account  of  any  valuation  theretofore  made  of  the  particular 
estates  for  purposes  of  taxation,  upon  which  said  estates  in 
expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the 
act  or  omission  of  the  legatee  or  devisee  it  shall  be  taxed  as  if 
there  were  no  possibility  of  such  divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one  of 
which  duplicates  shall  be  filed  in  the  office  of  the  surrogate  and 
the  other  in  the  office  of  the  state  comptroller. 

§  231.  Determination  of  surrogate. — From  such  report  of 
appraisal  and  other  proof  relating  to  any  such  estate  before 
the  surrogate,  the  surrogate  shall  forthwith,  as  of  course,  deter- 
mine the  cash  value  of  all  estates  and  the  amount  of  tax  to 
which  the  same  are  liable;  or  the  surrogate  may  so  determine 
the  cash  value  of  all  such  estates  and  the  amount  of  tax  to  which 
the  same  are  liable,  without  appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  application  of 
any  surrogate,  determine  the  value  of  any  such  future  or  con- 
tingent estates,  income  or  interest  therein  limited,  contingent, 
dependent  or  determinable  upon  the  life  or  lives  of  persons  in 
being,  upon  the  facts  contained  in  any  such  appraiser's  report, 
and  certify  the  same  to  the  surrogate,  and  his  certificate  shall 
be  conclusive  evidence  that  the  method  of  computation  adopted 
therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the  deter- 
mination by  him  as  to  the  value  of  any  estate  which  is  taxable 
under  this  article,  and  of  the  tax  to  which  it  is  liable,  to  all  per- 
sons known  to  be  interested  therein,  and  shall  immediately 
forward  a  copy  of  such  taxing  order  to  the  state  comptroller. 
The  surrogate  shall  also  forward  to  the  state  comptroller  copies 
of  all  orders  entered  by  him  in  relation  to  or  affecting  hi  any 
way  the  transfer  tax  on  any  estate,  including  orders  of  exemp- 
tion. 

If,  however,  it  appear  at  any  stage  of  the  proceedings  that 
any  of  such  persons  known  to  be  interested  in  the  estate  is  an 
infant  or  an  incompetent,  the  surrogate  may,  if  the  interest  of 
such  infant  or  incompetent  is  presently  involved  and  is  adverse 


512  PRIOR  STATUTES 

to  that  of  any  of  the  other  persons  interested  therein,  appoint 
a  special  guardian  of  such  infant;  but  nothing  in  this  provision 
shall  affect  the  right  of  an  infant  over  fourteen  years  of  age  or 
of  any  one  on  behalf  of  an  infant  under  fourteen  years  of  age  to 
nominate  and  apply  for  the  appointment  of  a  special  guardian 
for  such  infant  at  any  stage  of  the  proceedings. 

§  232.  Appeal  and  other  proceedings. — The  state  comptroller 
or  any  person  dissatisfied  with  the  appraisement  or  assess- 
ment and  determination  of  tax  may  appeal  therefrom  to  the 
surrogate  within  sixty  days  from  the  fixing,  assessing  and  deter- 
mination of  tax  by  the  surrogate  as  herein  provided,  upon  filing 
in  the  office  of  the  surrogate  a  written  notice  of  appeal,  which 
shall  state  the  grounds  upon  which  the  appeal  is  taken;  but  no 
costs  shall  be  allowed  by  the  surrogate  on  such  appeal. 

Within  two  years  after  the  entry  of  an  order  or  decree  of  a 
surrogate  determining  the  value  of  an  estate  and  assessing  the 
tax  thereon,  the  state  comptroller  may,  if  he  believes  that  such 
appraisal,  assessment  or  determination  has  been  fraudulently, 
collusively  or  erroneously  made,  make  application  to  a  justice 
of  the  supreme  court  of  the  judicial  district  embracing  the  sur- 
rogate's court  in  which  the  order  or  decree  has  been  filed,  for  a 
reappraisal  thereof.  The  justice  to  whom  such  application  is 
made  may  thereupon  appoint  a  competent  person  to  reappraise 
such  estate.  Such  appraiser  shall  possess  the  powers  and  be 
subject  to  the  duties  of  an  appraiser  under  section  two  hundred 
and  thirty  and  shall  receive  compensation  at  the  rate  of  five 
dollars  per  day  for  every  day  actually  and  necessarily  employed 
in  such  appraisal.  Such  compensation  shall  be  payable  by  the 
state  comptroller  or  county  treasurer  out  of  any  funds  he  may 
have  on  account  of  any  tax  imposed  under  the  provisions  of 
this  article,  upon  the  certificate  of  the  justice  appointing  him. 
The  report  of  such  appraiser  shall  be  filed  with  the  justice  by 
whom  he  was  appointed,  and  thereafter  the  same  proceedings 
shall  be  taken  and  had  by  and  before  such  justice  as  are  herein 
provided  to  be  taken  and  had  by  and  before  the  surrogate.  The 
determination  and  assessment  of  such  justice  shall  supersede 
the  determination  and  assessment  of  the  surrogate,  and  shall 
be  filed  by  such  justice  in  the  office  of  the  state  comptroller, 
and  a  certified  copy  thereof  transmitted  to  the  surrogate's  court 
of  the  proper  county. 

§  233.  Composition  of  transfer  tax  upon  certain  estates. — 
The  state  comptroller,  by  and  with  the  consent  of  the  attorney- 


LAWS  OF    1909,   CHAP.    62  513 

general  expressed  in  writing,  is  hereby  empowered  and  au- 
thorized to  enter  into  an  agreement  with  the  trustees  of  any 
estate  in  which  remainders  or  expectant  estates  have  been  of 
such  a  nature,  or  so  disposed  and  circumstanced,  that  the  taxes 
therein  were  held  not  presently  payable,  or  where  the  interests 
of  the  legatees  or  devisees  were  not  ascertainable  under  the 
provisions  of  chapter  four  hundred  and  eighty-three  of  the  laws 
of  eighteen  hundred  and  eighty-five;  chapter  three  hundred  and 
ninety-nine  of  the  laws  of  eighteen  hundred  and  ninety-two, 
or  chapter  nine  hundred  and  eight  of  the  laws  of  eighteen  hun- 
dred and  ninety-six,  and  the  several  acts  amendatory  thereof 
and  supplemental  thereto;  and  to  compound  such  taxes  upon 
such  terms  as  may  be  deemed  equitable  and  expedient;  and  to 
grant  discharge  to  said  trustees  upon  the  payment  of  the  taxes 
provided  for  in  such  composition,  provided,  however,  that  no 
such  composition  shall  be  conclusive  in  favor  of  said  trustees 
as  against  the  interest  of  such  cestuis  que  trust  as  may  possess 
either  present  rights  of  enjoyment,  or  fixed,  absolute  or  inde- 
feasible rights  of  future  enjoyment,  or  of  such  as  would  possess 
such  rights  in  the  event  of  the  immediate  termination  of  par- 
ticular estates,  unless  they  consent  thereto,  either  personally, 
when  competent,  or  by  guardian  or  committee.  Composition 
or  settlement  made  or  effected  under  the  provisions  of  this 
section  shall  be  executed  in  triplicate,  and  one  copy  filed  in  the 
office  of  the  state  comptroller,  one  copy  in  the  office  of  the  surro- 
gate of  the  county  in  which  the  tax  was  paid,  and  one  copy  de- 
livered to  the  executors,  administrators  or  trustees  who  shall 
be  parties  thereto. 

§  234.  Surrogates'  assistants  in  New  York,  Kings  and  other 
counties. — The  state  comptroller  may,  upon  the  recommenda- 
tion of  the  surrogate,  appoint,  and  may  at  pleasure  remove, 
assistants  and  clerks  in  the  surrogate's  offices  of  the  following 
counties,  at  annual  salaries  to  be  fixed  by  him  not  to  exceed 
the  amounts  hereinafter  specified: 

1.  In  New  York  county,  a  transfer  tax  assistant,  four  thou- 
sand dollars;  a  transfer  tax  clerk,  two  thousand  four  hundred 
dollars;  an  assistant  clerk,  eighteen  hundred  dollars;  a  recording 
clerk,  thirteen  hundred  dollars;  a  stenographer,  eight  hundred 
dollars;  and  shall  be  entitled  to  expend  not  more  than1  seven 
hundred  and  fifty  dollars  a  year  in  such  office  for  expenses 
necessarily  incurred  in  the  assessment  and  collection  of  taxes 
under  this  article. 
33 


514  PRIOR   STATUTES 

2.  In  Kings  county,  a  transfer  tax  assistant,  four  thousand 
dollars;  a  transfer  tax  clerk,  two  thousand  dollars;  an  assistant 
clerk,  fifteen  hundred  dollars;  and  shall  be  entitled  to  expend 
not  more  than  five  hundred  dollars  a  year  for  expenses  neces- 
sarily incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

3.  In  Erie  county,  a  transfer  tax  clerk,  eighteen  hundred 
dollars. 

4.  In  Westchester  county,  a  transfer  tax  assistant,  two  thou- 
sand five  hundred  dollars. 

5.  In  Albany  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

6.  In  Queens  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

7.  In  Onondaga  county,  a  transfer  tax  clerk,  twelve  hundred 
dollars. 

8.  In  Monroe  county,  two  transfer  tax  clerks,  seven  hundred 
and  fifty  dollars  each;  and  shall  be  entitled  to  expend  not  more 
than  two  hundred  dollars  a  year  for  expenses  necessarily  incurred 
in  the  assessment  and  collection  of  taxes  under  this  article. 

9.  In  Dutchess  county,  a  transfer  tax  clerk,  nine  hundred 
dollars. 

10.  In  Oneida  county,  not  more  than  two  transfer  tax  clerks, 
twelve  hundred  dollars  in  the  aggregate. 

11.  In  Suffolk  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

12.  In  Ulster  county,  a  transfer  tax  clerk,  seven  hundred 
and  twenty  dollars. 

Such  salaries  and  expenses  shall  be  paid  monthly  by  the 
state  comptroller,  upon  proper  vouchers,  out  of  any  funds  in 
his  hands  on  account  of  taxes  collected  under  this  article. 

§  235.  Proceedings  by  district  attorneys. — If,  after  the  ex- 
piration of  eighteen  months  from  the  accrual  of  any  tax  under 
this  article,  such  tax  shall  remain  due  and  unpaid,  after  the 
refusal  or  neglect  of  the  persons  liable  therefor  to  pay  the  same, 
the  state  comptroller  shall  notify  the  district  attorney  of  the 
county,  in  writing,  of  such  failure  or  neglect,  and  such  district 
attorney  shall  apply  to  the  surrogate's  court  for  a  citation, 
citing  the  persons  liable  to  pay  such  tax  to  appear  before  the 
court  on  the  day  specified,  not  more  than  three  months  after 
the  date  of  such  citation,  and  show  cause  why  the  tax  should 
not  be  paid.  The  surrogate,  upon  such  application,  and  when- 


LAWS   OF    1909,    CHAP.    62  515 

ever  it  shall  appear  to  him  that  any  such  tax  accruing  under 
this  article  has  not  been  paid  as  required  by  law,  shall  issue  such 
citation,  and  the  service  of  such  citation,  and  the  time,  manner 
and  proof  thereof,  and  the  hearing  and  determination  thereon 
and  the  enforcement  of  the  determination  or  order  made  by  the 
surrogate  shall  conform  to  the  provisions  of  the  code  of  civil 
procedure  for  the  service  of  citations  out  of  the  surrogate's 
court,  and  the  hearing  and  determination  thereon  and  its  en- 
forcement so  far  as  the  same  may  be  applicable.  The  surrogate 
or  his  clerk  shall,  upon  request  of  the  district  attorney  or  the 
state  comptroller,  furnish,  without  fee,  one  or  more  transcripts 
of  such  decree,  which  shall  be  docketed  and  filed  by  the  county 
clerk  of  any  county  of  the  state  without  fee,  in  the  same  manner 
and  with  the  same  effect  as  provided  by  law  for  filing  and  docket- 
ing transcripts  of  decrees  of  the  surrogate's  court.  The  costs 
awarded  by  any  such  decree  after  the  collection  and  payment 
of  the  tax  to  the  state  comptroller  or  county  treasurer  may  be 
retained  by  the  district  attorney  for  his  own  use.  Such  costs 
shall  be  fixed  by  the  surrogate  in  his  discretion,  but  shall  not 
exceed  in  any  case  where  there  has  not  been  a  contest,  the  sum 
of  one  hundred  dollars,  or  where  there  has  been  a  contest,  the 
sum  of  two  hundred  and  fifty  dollars.  Whenever  the  surrogate 
shall  certify  that  there  was  probable  cause  for  issuing  a  citation 
and  taking  the  proceedings  specified  in  this  section,  the  state 
comptroller,  after  the  same  shall  have  been  audited  by  him, 
shall  pay  all  expenses  incurred  for  the  service  of  citations  and 
other  lawful  disbursements  not  otherwise  paid,  from  funds  in 
his  hands  on  account  of  such  tax,  or  in  a  county  in  which  the 
office  of  appraiser  is  not  salaried,  by  a  warrant  upon  the  county 
treasurer  of  such  county  for  the  payment  by  him  of  the  same 
from  funds  in  his  hands  on  account  of  such  tax.  In  proceedings 
to  which  the  state  comptroller  is  cited  as  a  party  under  sections 
two  hundred  and  twenty-eight  and  two  hundred  and  thirty  of 
this  article,  he  is  authorized  to  designate  and  retain  counsel  to 
represent  him  and  to  pay  the  expenses  thereby  incurred  out  of 
the  funds  which  may  be  in  his  hands  on  account  of  this  tax  in 
any  case  in  a  county  where  the  office  of  appraiser  is  salaried, 
and  in  any  other  county  the  state  comptroller  shall  by  warrant 
direct  the  county  treasurer  to  pay  such  expenses  out  of  any 
funds  which  may  be  in  his  hands  on  account  of  this  tax;  pro- 
vided, however,  that  in  the  collection  of  taxes  upon  estates  of 
nonresident  decedents  the  state  comptroller  shall  not  allow  for 


516  PRIOR   STATUTES 

legal  services  up  to  and  including  the  entry  of  the  order  of  the 
surrogate  fixing  the  tax  a  sum  exceeding  ten  per  centum  of  the 
taxes  and  penalties  collected. 

§  236.  Receipts  from  county  treasurer  or  comptroller. — One 
of  the  duplicate  receipts  issued  for  the  payment  of  any  tax 
under  this  article,  as  provided  by  section  two  hundred  and 
twenty-two,  shall  be  countersigned  by  the  state  treasurer  if 
the  same  was  issued  by  the  state  comptroller,  and  by  the  state 
comptroller  if  issued  by  any  county  treasurer.  The  officer  so 
countersigning  the  same  shall  charge  the  officer  receiving  the 
tax  with  the  amount  thereof  and  affix  the  seal  of  his  office  to 
the  same  and  return  to  the  proper  person;  but  no  executor,  ad- 
ministrator or  trustee  shall  be  entitled  to  a  final  accounting  of 
an  estate  in  settlement  of  which  a  tax  is  due  under  the  provisions 
of  this  article  unless  he  shall  produce  a  receipt  so  sealed  and 
countersigned,  or  a  certified  copy  thereof.  Any  person  shall, 
upon  the  payment  of  fifty  cents  to  the  officer  issuing  such  re- 
ceipt, be  entitled  to  a  duplicate  thereof,  to  be  signed,  sealed  and 
countersigned  in  the  same  manner  as  the  original. 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be  entitled 
to  a  certificate  of  the  state  comptroller  that  the  tax  upon  the 
transfer  of  any  real  estate  of  which  any  decedent  died  seized 
has  been  paid,  such  certificate  to  designate  the  real  property 
upon  which  such  tax  is  paid,  the  name  of  the  person  so  paying 
the  same,  and  whether  in  full  of  such  tax.  Such  certificate  may 
be  recorded  in  the  office  of  the  county  clerk  or  register  of  the 
county  where  such  real  property  is  situate,  in  a  book  to  be  kept 
by  him  for  that  purpose,  which  shall  be  labeled  "transfer  tax." 

§  237.  Fees  of  county  treasurer. — The  treasurer  of  each 
county  in  which  the  office  of  appraiser  is  not  salaried  shall  be 
allowed  to  retain,  on  all  taxes  paid  and  accounted  for  by  him 
each  fiscal  year  under  this  article,  five  per  centum  on  the  first 
fifty  thousand  dollars,  two  and  one-half  per  centum  on  the 
next  fifty  thousand  dollars,  and  one  per  centum  on  all  additional 
sums.  Such  fees  shall  be  in  addition  to  the  salaries  and  fees 
now  allowed  by  law  to  such  officers. 

§  238.  Books  and  forms  to  be  furnished  by  the  state  comp- 
troller.— The  state  comptroller  shall  furnish  to  each  surrogate 
a  book,  which  shall  be  a  public  record,  and  in  which  he  shall 
enter  the  name  of  every  decedent  upon  whose  estate  an  applica- 
tion to  him  has  been  made  for  the  issue  of  letters  of  administra- 
tion, or  letters  testamentary,  or  ancillary  letters,  the  date  and 


LAWS   OF    1909,    CHAP.    62  517 

place  of  death  of  such  decedent,  the  estimated  value  of  his  real 
and  personal  property,  the  names,  places  of  residence  and  rela- 
tionship to  him  of  his  heirs-at-law,  the  names  and  places  of 
residence  of  the  legatees  and  devisees  in  any  will  of  any  such 
decedent,  the  amount  of  each  legacy  and  the  estimated  value  of 
any  real  property  devised  therein,  and  to  whom  devised.  These 
entries  shall  be  made  from  the  data  contained  in  the  papers 
filed  on  any  such  application,  or  in  any  proceeding  relating  to 
the  estate  of  the  decedent.  The  surrogate  shall  also  enter  in 
such  book  the  amount  of  the  personal  property  of  any  such 
decedent,  as  shown  by  the  inventory  thereof  when  made  and 
filed  in  his  office,  and  the  returns  made  by  any  appraiser  ap- 
pointed by  him  under  this  article,  and  the  value  of  annuities, 
life  estates,  terms  of  years,  and  other  property  of  any  such 
decedent  or  given  by  him  in  his  will  or  otherwise,  as  fixed  by 
the  surrogate,  and  the  tax  assessed  thereon,  and  the  amounts 
of  any  receipts  for  payment  of  any  tax  on  the  estate  of  such 
decedent  under  this  article  filed  with  him.  The  state  comp- 
troller shall  also  furnish  to  each  surrogate  forms  for  the  reports 
to  be  made  by  such  surrogate,  which  shall  correspond  with  the 
entries  to  be  made  in  such  book. 

§  239.  Reports  of  surrogate  and  county  clerk. — Each  sur- 
rogate shall,  on  January,  April,  July  and  October  first  of  each 
year,  make  a  report,  upon  the  forms  furnished  by  the  comp- 
troller containing  all  the  data  and  matters  required  to  be  en- 
tered in  such  book,  which  shall  be  immediately  forwarded  to  the 
state  comptroller.  The  county  clerk  of  each  county,  except  in 
the  counties  where  the  registers  perform  the  duties  of  the  county 
clerk  with  respect  to  the  recording  of  deeds,  and  when  in  such 
counties  the  registers,  shall,  at  the  same  times,  make  reports 
containing  a  statement  of  any  deed  or  other  conveyance  filed 
or  recorded  in  his  office,  of  any  property,  which  appears  to  have 
been  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  or  vendor,  with  the  name 
and  place  of  residence  of  such  grantor  or  vendor,  the  name  and 
place  of  residence  of  the  grantee  or  vendee,  and  a  description 
of  the  property  transferred,  which  shall  be  immediately  for- 
warded to  the  state  comptroller. 

§  240.  Reports  of  county  treasurer. — Each  county  treas- 
urer in  a  county  in  which  the  office  of  appraiser  is  not  salaried 
shall  make  a  report,  under  oath,  to  the  state  comptroller,  on 
January,  April,  July  and  October  first  of  each  year,  of  all  taxes 


518  PRIOR   STATUTES 

received  by  him  under  this  article,  stating  for  what  estate  and 
by  whom  and  when  paid.  The  form  of  such  report  may  be 
prescribed  by  the  state  comptroller.  He  shall,  at  the  same  time, 
pay  the  state  treasurer  all  taxes  received  by  him  under  this 
article  and  not  previously  paid  into  the  state  treasury,  and  for 
all  such  taxes  collected  by  him  and  not  paid  into  the  state 
treasury  within  thirty  days  from  the  times  herein  required,  he 
shall  pay  interest  at  the  rate  of  ten  per  centum  per  annum. 

§  241.  Report  of  state  comptroller;  payment  of  taxes. — The 
state  comptroller  shall  deposit  all  taxes  collected  by  him  under 
this  article  in  a  responsible  bank,  banking  house  or  trust  com- 
pany in  the  city  of  Albany,  which  shall  pay  the  highest  rate  of 
interest  to  the  state  for  such  deposit,  to  the  credit  of  the  state 
comptroller  on  account  of  the  transfer  tax.  And  every  such 
bank,  banking  house  or  trust  company  shall  execute  and  file  in 
his  office  an  undertaking  to  the  state,  in  the  sum,  and  with  such 
sureties,  as  are  required  and  approved  by  the  comptroller,  for 
the  safe  keeping  and  prompt  payment  on  legal  demand  therefor 
of  all  such  moneys  held  by  or  on  deposit  in  such  bank,  banking 
house  or  trust  company,  with  interest  thereon  on  daily  balances 
at  such  rate  as  the  comptroller  may  fix.  Every  such  undertaking 
shall  have  indorsed  thereon,  or  annexed  thereto,  the  approval 
of  the  attorney-general  as  to  its  form.  The  state  comptroller 
shall  on  the  first  day  of  each  month  make  a  verified  return  to 
the  state  treasurer  of  all  taxes  received  by  him  under  this  ar- 
ticle, stating  for  what  estate,  and  by  whom  and  when  paid; 
and  shall  credit  himself  with  all  expenditures  made  since  his 
last  previous  return  on  account  of  such  taxes,  for  salary,  re- 
funds or  other  purposes  lawfully  chargeable  thereto.  He  shall 
on  or  before  the  tenth  day  of  each  month  pay  to  the  state  treas- 
urer the  balance  of  such  taxes  remaining  in  his  hands  at  the 
close  of  business  on  the  last  day  of  the  previous  month,  as  ap- 
pears from  such  returns. 

§  242.  Application  of  taxes. — All  taxes  levied  and  collected 
under  this  article  when  paid  into  the  treasury  of  the  state  shall 
be  applicable  to  the  expenses  of  the  state  government  and  to 
such  other  purposes  as  the  legislature  shall  by  law  direct. 

§  243.  Definitions. — The  words  "estate"  and  "property," 
as  used  in  this  article,  shall  be  taken  to  mean  the  property  or 
interest  therein  of  the  testator,  intestate,  grantor,  bargainer 
or  vendor,  passing  or  transferred  to  those  not  herein  specifically 
exempted  from  the  provisions  of  this  article,  and  not  as  the 


LAWS   OF    1910,    CHAP.    600  519 

property  or  interest  therein  passing  or  transferred  to  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees, 
and  shall  include  all  property  or  interest  therein,  whether 
situated  within  or  without  this  state.  The  word  "transfer," 
as  used  hi  this  article,  shall  be  taken  to  include  the  passing  of 
property  or  any  interest  therein  in  possession  or  enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  bequest, 
grant,  deed,  bargain,  sale  or  gift,  in  the  manner  herein  pre- 
scribed. The  words  "county  treasurer"  and  "district  attor- 
ney," as  used  in  this  article,  shall  be  taken  to  mean  the  treas- 
urer or  the  district  attorney  of  the  county  of  the  surrogate 
having  jurisdiction  as  provided  in  section  two  hundred  and 
twenty-eight  of  this  article. 

§  244.  Exemptions  in  article  one  not  applicable. — The  ex- 
emptions enumerated  in  section  four  of  this  chapter  shall  not 
be  construed  as  being  applicable  hi  any  manner  to  the  pro- 
visions of  this  article. 

§  245.  Limitation  of  time. — The  provisions  of  the  code  of 
civil  procedure  relative  to  the  limitation  of  time  of  enforcing  a 
civil  remedy  shall  not  apply  to  any  proceeding  or  action  taken 
to  levy,  appraise,  assess,  determine  or  enforce  the  collection  of 
any  tax  or  penalty  prescribed  by  this  article,  and  this  section 
shall  be  construed  as  having  been  in  effect  as  of  date  of  the 
original  enactment  of  the  inheritance  tax  law,  provided,  how- 
ever, that  as  to  real  estate  in  the  hands  of  bona  fide  purchasers, 
the  transfer  tax  shall  be  presumed  to  be  paid  and  cease  to  be 
a  lien  as  against  such  purchasers  after  the  expiration  of  six 
years  from  the  date  of  accrual. 

Amendment  by  Laws  1910,  Chap.  600, 

In  effect  June  23,  1911,  amended  section  221,  by  adding  the  words 
"  for  religious  ceremonies,  observances  or  commemorative  services  of 
or  for  the  deceased  donor,  or  "  to  the  second  sentence  of  section  221 
between  the  words  "  devised  or  bequeathed,"  and  the  words  "to  any 
person  "  in  said  sentence.  Vide  post,  page  521. 


520  PRIOR   STATUTES 


Amendment  by  Laws  of  1910,  Chap.  706, 

In  effect  July  11,  1910,a  amended  sections  220,  221,  229  and  243, 

to- wit: 

Section  1.  Section  two  hundred  and  twenty  of  chapter 
L.  1909,  sixty-two  of  the  laws  of  nineteen  hundred  and  nine,  en- 

§h22o2'  titled  "An  act  in  relation  to  taxation,  constituting  chapter 

amended.         sixty  of  the  consolidated  laws,"  is  hereby  amended  to 

read  respectively  as  follows: 

§  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal  of  the  value  of  more 
than  one  hundred  dollars  l  or  of  any  interest  therein  or  income  there- 
from, in  trust  or  otherwise,  to  persons  or  corporations  not  exempt  by 
law  from  taxation  on  real  or  personal  property,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  dying  seized  or  possessed  of  the  property  while  a 
resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within 
the  state,  and  the  decedent  was  a  nonresident  of  the  state  at  the  tune 
of  his  death. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the  property 
of  a  nonresident  decedent  within  this  state,  transferred  by  will,  is  not 
specifically  bequeathed  or  devised,  such  property  shall,  for  the  pur- 
poses of  this  article,  be  deemed  to  be  transferred  proportionately  to, 
and  divided  pro  rata  among  all  the  general  legatees  and  devisees  named 
in  said  decedent's  will,  including  all  transfers  under  a  residuary  clause 
of  such  will. 

4.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non- 
resident when  such  nonresident's  property  is  within  this  state,  by 
deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  the  death 
of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

5.  When  any  such  person  or  corporation  becomes  beneficially  en- 
titled, in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage 
of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either 
before  or  after  the  passage  of  this  chapter,  such  appointment  when 
made  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this 
chapter  in  the  same  manner  as  though  the  property  to  which  such 
appointment  relates  belonged  absolutely  to  the  donee  of  such  power 

a  Vide  discussion  in  Matter  of  Lane,  157  App.  Div.  694-697,  post,  page  809. 
1  Formerly  "five  hundred  dollars  or  over." 


LAWS   OF    1910,    CHAP.    706  521 

and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and  when- 
ever any  person  or  corporation  possessing  such  a  power  of  appoint- 
ment so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time 
provided  therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the 
provisions  of  this  chapter  shall  be  deemed  to  take  place  to  the  extent 
of  such  omission  or  failure,  in  the  same  manner  as  though  the  persons 
or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded 
thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such  omission  or  failure. 

7.  The  tax  imposed  hereby  shall  be  at  the  rate  of  five  per  centum 
upon  the  clear  market  value  of  such  property,  except  as  otherwise 
prescribed  in  the  next  section. 

§  2.  Section  two  hundred  and  twenty-one  of  such  chap-    §  221,  as 
ter,  as  amended  by  chapter  six  hundred  of  the  laws  of   iTisiof  by 
nineteen  hundred  and  ten,  is  hereby  amended  to  read  as   further' 

follows:  amended. 

§  221.  Exceptions  and  limitations.  When  property,  real  or  per- 
sonal, or  any  beneficial  interest  therein,  of  the  value  of  not  more  than 
five  hundred  dollars,1  passes  by  any  such  transfer  to  or  for  the  use  of 
any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow 
of  a  son  or  the  husband  of  a  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  this  state,  of  the  decedent, 
grantor,  donor  or  vendor,  or  to  any  child  to  whom  any  such  decedent, 
grantor,  donor  or  vendor  for  not  less  than  ten  years  prior  to  such  trans- 
fer stood  in  the  mutually  acknowledged  relation  of  a  parent,  provided, 
however,  such  relationship  began  at  or  before  the  child's  fifteenth 
birthday,  and  was  continuous  for  said  ten  years  thereafter,  and  pro- 
vided also  that,  except  in  the  case  of  a  stepchild,  the  parents  of  such 
child  shall  have  been  deceased  when  such  relationship  commenced, 
or  to  any  lineal  descendant  of  such  decedent,  grantor,  donor  or  vendor 
born  in  lawful  wedlock,  such  transfer  of  property  shall  not  be  taxable 
under  this  article;  if  real  or  personal  property,  or  any  beneficial  interest 
therein,  so  transferred  is  of  the  value  of  more  than  five  hundred  dol- 
lars,2 it  shall  be  taxable  under  this  article  at  the  rate  of  one  per  centum 
upon  the  clear  market  value  of  such  property  3  except  as  herein  pro- 
vided. No  such  tax  shall  be  assessed  upon  property,  real  or  personal, 
or  any  beneficial  interest  therein  so  transferred  to  a  father,  mother, 
widow  or  minor  child  of  the  decedent,  grantor,  donor  or  vendor,  if  the 
amount  so  transferred  to  such  father,  mother,  widow  or  minor  child 
is  the  sum  of  five  thousand  dollars  or  less;  but  if  the  amount  so  trans- 
ferred to  a  father,  mother,  widow  or  a  minor  child  is  over  five  thousand 

1  Formerly  "of  less  than  ten  thousand  dollars." 

2  Formerly  "of  ten  thousand  dollars  or  more." 
8  Remainder  of  paragraph  new. 


522  PRIOR  STATUTES 

dollars  the  excess  shall  be  taxable  at  the  rate  of  one  per  centum  upon 
the  clear  market  value  of  such  property  as  hereinbefore  provided.  The 
rates  of  taxation  hereinbefore  prescribed  in  this  and  the  preceding 
section  are  hereby  designated  as  "primary  rates."  Whenever  any 
property,  real  or  personal,  or  any  beneficial  interest  therein  which 
passes  by  any  such  transfer  to  or  for  the  use  of  any  person  or  corpora- 
tion, shall  exceed  the  amount  of  twenty-five  thousand  dollars  over  and 
above  the  exemptions  hereinbefore  provided  the  rate  of  taxation  shall 
be  as  follows: 

1  Upon  all  amounts  in  excess  of  the  said  twenty-five  thousand  dollars 
and  up  to  and  including  the  sum  of  one  hundred  thousand  dollars, 
twice  the  primary  rates; 

1  Upon  all  amounts  in  excess  of  the  said  one  hundred  thousand  dol- 
lars and  up  to  and  including  the  sum  of  five  hundred  thousand  dollars, 
three  times  the  primary  rates; 

1  Upon  all  amounts  in  excess  of  the  said  five  hundred  thousand  dol- 
lars and  up  to  and  including  the  sum  of  one  million  dollars,  four  times 
the  primary  rates; 

2  Upon  all  amounts  in  excess  of  the  said  one  million  dollars,  five 
times  the  primary  rates.    But  any  property  devised  or  bequeathed 
for  religious  ceremonies,  observances  or  commemorative  services  of 
or  for  the  deceased  donor,  or  to  any  person  who  is  a  bishop  or  to  any 
religious,   educational,   charitable,   missionary,   benevolent,   hospital 
or  infirmary  corporation,  including  corporations  organized  exclusively 
for  bible  or  tract  purposes,  shall  be  exempted  from  and  not  subject 
to  the  provisions  of  this  article.    There  shall  also  be  exempted  from 
and  not  subject  to  the  provisions  of  this  article  personal  property  other 
than  money  or  securities  bequeathed  to  a  corporation  or  association 
organized  exclusively  for  the  moral  or  mental  improvement  of  men  or 
women  or  for  scientific,  literary,  library,  patriotic,  cemetery  or  his- 
torical purposes  or  for  the  enforcement  of  laws  relating  to  children 
or  animals  or  for  two  or  more  of  such  purposes  and  used  exclusively 
for  carrying  out  one  or  more  of  such  purposes.    But  no  such  corpora- 
tion or  association  shall  be  entitled  to  such  exemption  if  any  officer, 
member  or  employee  thereof  shall  receive  or  may  be  lawfully  entitled 
to  receive  any  pecuniary  profit  from  the  operations  thereof  except 
reasonable  compensation  for  services  in  effecting  one  or  more  of  such 
purposes  or  as  proper  beneficiaries  of  its  strictly  charitable  purposes; 
or  if  the  organization  thereof  for  any  such  avowed  purpose  be  a  guise 
or  pretense  for  directly  or  indirectly  making  any  other  pecuniary 
profit  for  such  corporation  or  association  or  for  any  of  its  members  or 
employees  or  if  it  be  not  in  good  faith  organized  or  conducted  exclu- 
sively for  one  or  more  of  such  purposes. 

1  Following  paragraph  new. 
1  Following  sentence  new. 


LAWS  OF  1910,  CHAP.  706  523 

§  3.  Section  two   hundred   and   twenty-nine  of  such   §  229,  as 
chapter,  as  amended  by  chapter  two  hundred  and  eighty-   1^1909,    y 
three  of  the  laws  of  nineteen  hundred  and  nine,  is  hereby    ^1^' 
amended  to  read  as  follows:  amended. 

§  229.  Appointment  of  appraisers,  stenographers,  and  clerks. — 
The  state  comptroller  shall  appoint  and  may  at  pleasure  remove  not 
to  exceed  six  persons  in  the  county  of  New  York;  three  persons  hi  the 
county  of  Kings,  and  one  person  in  the  counties  of  Albany,  Dutchess, 
Erie,  Monroe,  Nassau,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer, 
Richmond,  Suffolk  and  Westchester,  to  act  as  appraisers  therein. 
The  appraisers  so  appointed  shall  receive  an  annual  salary  to  be  fixed 
by  the  state  comptroller,  together  with  then*  actual  and  necessary 
traveling  expenses  and  witness  fees,  as  hereinafter  provided,  payable 
monthly  by  the  state  comptroller  out  of  any  funds  hi  his  hands  or  cus- 
tody on  account  of  transfer  tax.  The  salaries  of  each  of  the  appraisers 
so  appointed  shall  not  exceed  the  following  amounts:  In  New  York 
county,  four  thousand  dollars;  in  Kings  county,  four  thousand  dollars; 
in  Erie  county,  three  thousand  dollars;  in  Westchester  and  Albany 
counties,  twenty-five  hundred  dollars;  hi  Nassau  county,  two  thousand 
dollars;  in  Queens,  Monroe  and  Onondaga  counties,  one  thousand  five 
hundred  dollars;  in  Dutchess,  Oneida,  Orange,  Rensselaer,  Richmond 
and  Suffolk  counties,  one  thousand  dollars.  Each  of  the  said  appraisers 
shall  file  with  the  state  comptroller  his  oath  of  office  and  his  official 
bond  in  the  penal  sum  of  not  less  than  one  thousand  dollars,  hi  the 
discretion  of  the  state  comptroller,  conditioned  for  the  faithful  per- 
formance of  his  duties  as  such  appraiser,  which  bond  shall  be  approved 
by  the  attorney-general  and  the  state  comptroller.  The  state  comp- 
troller shall  retain  out  of  any  funds  in  his  hands  on  account  of  said 
tax  the  following  amounts:  First,  a  sum  sufficient  to  provide  the  ap- 
praisers of  New  York  county  with  six  stenographers,  three  clerks  and 
an  examiner  of  values,  of  Kings  county  with  three  stenographers,  and 
of  Erie  county  with  one  clerk,  appointed  by  the  state  comptroller, 
whose  salary  shall  not  exceed  fifteen  hundred  dollars  a  year  each. 
Second,  a  sum  to  be  used  in  defraying  the  expenses  for  office  rent, 
stationery,  postage,  process  serving  and  other  similar  expenses  neces- 
sarily incurred  hi  the  appraisal  of  estates,  not  exceeding  ten  thousand 
five  hundred  dollars  a  year  in  New  York  county,  and  three  thousand 
dollars  a  year  in  Kings  county.  1  Third,  a  sum  not  exceeding  ten 
thousand  dollars  to  be  used  in  defraying  the  expenses  for  extra  clerical 
and  stenographic  services  in  the  transfer  tax  bureau  of  the  comp- 
troller's office  at  Albany,  during  the  period  ending  September  thirtieth, 
nineteen  hundred  and  eleven. 

§  4.  Section  two  hundred  and  forty-three  of  such  chap-    §  243 
ter  is  hereby  amended  to  read  as  follows: 

1  Following  sentence  new. 


524  PRIOR   STATUTES 

§  243.  Definitions.  The  words  "estate"  and  "property,"  as  used 
in  this  article,  shall  be  taken  to  mean  the  property  or  interest  therein  » 
passing  or  transferred  to  individual  or  corporate  2  legatees,  devisees, 
heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  not  the  property 
or  interest  therein  of  the  decedent,  grantor,  donor  or  vendor  passing 
or  transferred,3  and  shall  include  all  property  or  interest  therein, 
whether  situated  within  or  without  this  state.  The  word  "transfer," 
as  used  in  this  article,  shall  be  taken  to  include  the  passing  of  property 
or  any  interest  therein  in  possession  or  enjoyment,  present  or  future, 
by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale 
or  gift,  in  the  manner  -herein  prescribed.  The  words  "  county  treasurer  " 
and  "district  attorney,"  as  used  in  this  article,  shall  be  taken  to  mean 
the  treasurer  or  the  district  attorney  of  the  county  of  the  surrogate 
having  jurisdiction  as  provided  in  section  two  hundred  and  twenty- 
eight  of  this  article. 

Amendment  by  Laws  of  1911,  Chap.  24, 

In  effect  September  1,  1911,  amends  section  447  of  Code  of  Civil 

Procedure. 


Amendment  by  Laws  of  1911,  Chap.  308, 

In  effect  June  12,  1911,  amended  section  225,  to-wit: 

Section  1.  Section   two   hundred  and   twenty-five   of 
L.  1909,  chapter  sixty-two  of  the  laws  of  nineteen  hundred  and 

§  225  '  nine,  entitled  "An  act  in  relation  to  taxation,  constituting 

chapter  sixty  of  the  consolidated  laws,"  is  hereby  amended 

to  read  as  follows: 

§  225.  Refund  of  tax  erroneously  paid.  If  any  debts  shall  be  proven 
against  the  estate  of  a  decedent  after  the  payment  of  any  legacy  or 
distributive  share  thereof,  from  which  any  such  tax  has  been  deducted 
or  upon  which  it  has  been  paid  by  the  person  entitled  to  such  legacy 
or  distributive  share,  and  such  person  is  required  by  order  of  the  surro- 
gate having  jurisdiction,  on  notice  to  the  state  comptroller,  to  refund 
the  amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion 
of  the  tax  shall  be  repaid  to  him  by  the  executor,  administrator  or 
trustee,  if  the  tax  has  not  been  paid  to  the  state  comptroller  or  county 

1  Words  "of  the  testator,  intestate,  grantor,  bargainer  or  vendor,  passing 
or  transferred  to  those  not  herein  specifically  exempted  from  the  provisions 
of  this  article,  and  not  as  the  property  or  interest,  therein,"  omitted. 

2  Words  "or  corporate,"  new. 

3  Words  "and  not  the  property  or  interest  therein  of  the  decedent, 
grantor,  donor  or  vendor  passing  or  transferred,"  new. 


LAWS   OF   1911,   CHAP.    308  525 

treasurer;  or  if  such  tax  has  been  paid  to  such  state  comptroller  or 
county  treasurer,  such  officer  shall  refund  out  of  the  funds  in  his  hands 
or  custody  to  the  credit  of  such  taxes  such  equitable  proportion  of 
the  tax,  and  credit  himself  with  the  same  in  the  account  required  to 
be  rendered  by  him  under  this  article.  If  after  the  payment  of  any  tax 
in  pursuance  of  an  order  fixing  such  tax,  made  by  the  surrogate  having 
jurisdiction,  such  order  be  modified  or  reversed  by  the  surrogate  hav- 
ing jurisdiction  l  within  two  years  from  and  after  the  date  of  entry  of 
the  order  fixing  the  tax,  or  be  modified  or  reversed  at  any  tune  on  an 
appeal  taken  therefrom  within  the  time  allowed  by  law  2  on  due  notice 
to  the  state  comptroller,  the  state  comptroller  shall,  if  such  tax  was 
paid  in  a  county  in  which  the  office  of  appraiser  is  salaried,  refund  to 
the  executor,  administrator,  trustee,  person  or  persons  by  whom  such 
tax  was  paid,  the  amount  of  any  moneys  paid  or  deposited  on  account 
of  such  tax  in  excess  of  the  amount  of  the  tax  fixed  by  the  order  modi- 
fied or  reversed,  out  of  the  funds  in  his  hands  or  custody  to  the  credit 
•  of  such  taxes,  and  to  credit  himself  with  the  same  in  the  account  re- 
quired to  be  rendered  by  him  under  this  article,  or  if  paid  in  a  county 
in  which  the  office  of  appraiser  is  not  salaried,  he  shall  by  warrant 
direct  and  allow  the  county  treasurer  of  the  county  to  refund  such 
amount  in  the  same  manner;  but  no  application  for  such  refund  shall 
be  made  after  one  year  from  such  reversal  or  modification,  unless  an 
appeal  shall  be  taken  therefrom,  in  which  case  no  such  application  shall 
be  made  after  one  year  from  the  final  determination  on  such  appeal 
or  of  an  appeal  taken  therefrom,3  and  the  representatives  of  the  estate, 
legatees,  devisees  or  distributees  entitled  to  any  refund  under  this  sec- 
tion shall  not  be  entitled  to  any  interest  upon  such  refund,  and  the 
state  comptroller  shall  deduct  from  the  fees  allowed  by  this  article  to 
the  county  treasurer  the  amount  theretofore  allowed  him  upon  such 
overpayment.  Where  it  shall  be  proved  to  the  satisfaction  of  the 
surrogate  that  deductions  for  debts  were  allowed  upon  the  appraisal, 
since  proved  to  have  been  erroneously  allowed,  it  shall  be  lawful  for 
such  surrogate  to  enter  an  order  assessing  the  tax  upon  the  amount 
wrongfully  or  erroneously  deducted.  4  This  section,  as  amended,  shall 
apply  to  appeals  and  proceedings  now  pending  and  taxes  heretofore 
paid  in  relation  to  which  the  period  of  one  year  from  such  reversal  or 
modification  has  not  expired  when  this  section,  as  amended,  takes 
effect. 

1  Words  "by  the  surrogate  having  jurisdiction,"  new. 

2  Words  "or  be  modified  or  reversed  at  any  time  on  an  appeal  taken 
therefrom  within  the  time  allowed  by  law,"  new. 

8  Words  "unless  an  appeal  .  .  .  taken  therefrom,"  new. 
4  Following  sentence  new. 


526  PRIOR   STATUTES 


Amendment  by  Laws  of  1911,  Chap.  732, 

In  effect  July  21,  1911,  added  a  new  section,  22la,  and  amended 
sections  220,  221  and  243,  to-wit: 

Section  1.  Section  two  hundred  and  twenty  of  chapter 
L.  1909,  sixty-two  of  the  laws  of  nineteen  hundred  and  nine,  en- 

as  amended'  titled  "An  act  in  relation  to  taxation,  constituting  chap- 
ch.  TOG,910'  ter  sixty  of  the  consolidated  laws,"  as  amended  by  chap- 
amended,  ter  seven  hundred  and  six  of  the  laws  of  nineteen  hundred 

and  ten,  is  hereby  amended  to  read  as  follows: 
§  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  tangible  property  within  the  state  and  of 
intangible  property,  or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons  or  corporations  in  the  following  cases, 
subject  to  the  exemptions  and  limitations  hereinafter  prescribed: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
of  any  intangible  property,  or  of  tangible  property  within  the  state, 
from  any  person  dying  seized  or  possessed  thereof  while  a  resident 
of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  tangible  property 
within  the  state,  and  the  decedent  was  a  non-resident  of  the  state  at 
the  time  of  his  death. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the  property 
of  a  nonresident  decedent  within  this  state,  transferred  by  will  is  not 
specifically  bequeathed  or  devised,  such  property  shall  for  the  purposes 
of  this  article,  be  deemed  to  be  transferred  proportionately  to  and 
divided  pro  rata  among  all  the  general  legatees  and  devisees  named  in 
said  decedent's  will,  including  all  transfers  under  a  residuary  clause  of 
such  will. 

4.  When  the  transfer  is  of  intangible  property,  or  of  tangible  prop- 
erty within  the  state,  made  by  a  resident,  or  of  tangible  property  within 
the  state  made  by  a  nonresident,  by  deed,  grant,  bargain,  sale  or  gift 
made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death. 

5.  When  any  such  person  or  corporation  becomes  beneficially  en- 
titled, in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer  whether  made  before  or  after  the  passage 
of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either 
before  or  after  the  passage  of  this  chapter,  such  appointment  when 
made  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this 
chapter  in  the  same  manner  as  though  the  property  to  which  such 


LAWS   OF    1911,    CHAP.    732  527 

appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will. 

7.  The  tax  imposed  hereby  shall  be  upon  the  clear  market  value  of 
such  property,  at  the  rates  hereinafter  prescribed. 

§  2.  Section  two  hundred  and  twenty-one  of  said  chap-   §  221,  as 
ter,  as  amended  by  chapters  six  hundred  and  seven  hun-   L?i9io,    y 
dred  and  six  of  the  laws  of  nineteen  hundred  and  ten,  is   $$?*•  6°°' 
hereby  amended  as  follows:  amended. 

§  221.  Exceptions  and  limitations.  Any  property  devised  or  be- 
queathed for  religious  ceremonies,  observances  or  commemorative 
services  of  or  for  the  deceased  donor,  or  to  any  person  who  is  a  bishop 
or  to  any  religious,  educational,  charitable,  missionary,  benevolent, 
hospital  or  infirmary  corporation,  wherever  incorporated,  including 
corporations  organized  exclusively  for  bible  or  tract  purposes  shall  be 
exempted  from  and  not  subject  to  the  provisions  of  this  article.  There 
shall  also  be  exempted  from  and  not  subject  to  the  provisions  of  this 
article  personal  property  other  than  money  or  securities  bequeathed 
to  a  corporation  or  association  wherever  incorporated  or  located, 
organized  exclusively  for  the  moral  or  mental  improvement  of  men 
or  women  or  for  scientific,  literary,  library,  patriotic,  cemetery  or  his- 
torical purposes  or  for  the  enforcement  of  laws  relating  to  children 
or  animals  or  for  two  or  more  of  such  purposes  and  used  exclusively 
for  carrying  out  one  or  more  of  such  purposes.  But  no  such  corpora- 
tion or  association  shall  be  entitled  to  such  exemption  if  any  officer, 
member  or  employee  thereof  shall  receive  or  may  be  lawfully  entitled 
to  receive  any  pecuniary  profit  from  the  operations  thereof  except 
reasonable  compensation  for  services  in  effecting  one  or  more  of  such 
purposes  or  as  proper  beneficiaries  of  its  strictly  charitable  purposes; 
or  if  the  organization  thereof  for  any  such  avowed  purpose  be  a  guise 
or  pretense  for  directly  or  indirectly  making  any  other  pecuniary  profit 
for  such  corporation  or  association  or  for  any  of  its  members  or  em- 
ployees or  if  it  be  not  in  good  faith  organized  or  conducted  exclusively 
for  one  or  more  of  such  purposes. 

§  3.  Said  chapter  is  hereby  amended  by  adding  after 
section  two  hundred  and  twenty-one  a  new  section  to  be      Idled, 
two  hundred  and  twenty-one-a,  and  is  to  road  as  follows: 

§  221-a.  Rates  of  tax.  1.  Upon  a  transfer  taxable  under  this  ar- 
ticle of  property  or  any  beneficial  interest  therein,  of  an  amount  in 
excess  of  the  value  of  five  thousand  dollars  to  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  or  any  child  or  children  adopted  as  such  in 
conformity  with  the  laws  of  this  state,  of  the  decedent,  grantor,  donor, 
or  vendor,  or  to  any  child  to  whom  any  such  decedent,  grantor,  donor, 
or  vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood  in  the 
mutually  acknowledged  relation  of  a  parent,  provided,  however,  such 
relationship  began  at  or  before  the  child's  fifteenth  birthday  and  was 


528  PRIOR   STATUTES 

continuous  for  said  ten  years  thereafter,  or  to  any  lineal  descendant 
of  such  decedent,  grantor,  donor,  or  vendor  born  in  lawful  wedlock, 
the  tax  on  such  transfer  shall  be  at  the  rate  of 

One  per  centum  on  any  amount  in  excess  of  five  thousand  dollars 
up  to  the  sum  of  fifty  thousand  dollars. 

Two  per  centum  on  any  amount  in  excess  of  fifty  thousand  dollars 
up  to  the  sum  of  two  hundred  and  fifty  thousand  dollars. 

Three  per  centum  on  any  amount  in  excess  of  two  hundred  and  fifty 
thousand  dollars  up  to  the  sum  of  one  million  dollars. 

Four  per  centum  on  any  amount  in  excess  of  one  million  dollars. 

2.  Upon  a  transfer  taxable  under  this  article  of  property  or  any 
beneficial  interest  therein  of  an  amount  in  excess  of  the  value  of  one 
thousand  dollars  to  any  person  or  corporation  other  than  those  enu- 
merated in  paragraph  one  of  this  section,  the  tax  shall  be  at  the  rate  of 

Five  per  centum  on  any  amount  in  excess  of  one  thousand  dollars 
up  to  the  sum  of  fifty  thousand  dollars. 

Six  per  centum  on  any  amount  in  excess  of  fifty  thousand  dollars 
up  to  the  sum  of  two  hundred  and  fifty  thousand  dollars. 

Seven  per  centum  on  /any  amount  in  excess  of  two  hundred  and 
fifty  thousand  dollars  up  to  the  sum  of  one  million  dollars. 

Eight  per  centum  on  any  amount  in  excess  of  one  million  dollars. 
§  243  as  §  4-  Section  two  hundred  and  forty-three  of  said  chap- 

|m«nded  by  ter  as  amended  by  chapter  seven  hundred  and  six  of  the 
ch.  706,'  laws  of  nineteen  hundred  and  ten  is  hereby  amended  to 

amended.  ,         ... 

read  as  follows: 

§  243.  Definitions.  The  words  "estate"  and  "property,"  as  used 
in  this  article,  shall  be  taken  to  mean  the  property  or  interest  therein 
passing  or  transferred  to  individual  or  corporate  legatees,  devisees, 
heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  not  as  the  prop- 
erty or  interest  therein  of  the  decedent,  grantor,  donor  or  vendor  1 
and  shall  include  all  property  or  interest  therein,  whether  situated 
within  or  without  this  state.  2The  words  "tangible  property"  as 
used  in  this  article  shall  be  taken  to  mean  corporeal  property  such 
as  real  estate  and  goods,  wares  and  merchandise,  and  slrall  not  be  taken 
to  mean  money,  deposits  in  bank,  shares  of  stock,  bonds,  notes,  credits 
or  evidences  of  an  interest  in  property  and  evidences  of  debt.  *  The 
words  "intangible  property"  as  used  in  this  article  shall  be  taken  to 
mean  incorporeal  property,  including  money,  deposits  in  bank,  shares 
of  stock,  bonds,  notes,  credits,  evidences  of  an  interest  in  property  and 
evidences  of  debt.  The  word  "transfer,"  as  used  in  this  article,  shall 
be  taken  to  include  the  passing  of  property  or  any  interest  therein  in 
the  possession  or  enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  bequest,  grant,  deed,  bargain,  sale  or  gift,  in  the  manner  herein 

1  Words  "passing  or  transferred,"  omitted. 
•Following  sentence  new. 


LAWS   OF    1911,   CHAP.    800  529 

prescribed.  The  words  "county  treasurer"  and  "district  attorney," 
as  used  in  this  article,  shall  be  taken  to  mean  the  treasurer  or  the  dis- 
trict attorney  of  the  county  of  the  surrogate  having  jurisdiction  as 
provided  hi  section  two  hundred  and  twenty-eight  of  this  article. 
1  The  words  "the  intestate  laws  of  this  state,"  as  used  in  this  article, 
shall  be  taken  to  refer  to  all  transfers  of  property,  or  any  beneficial 
interest  therein,  effected  by  the  statute  of  descent  and  distribution 
and  the  transfer  of  any  property,  or  any  beneficial  interest  therein, 
effected  by  operation  of  law  upon  the  death  of  a  person  omitting  to 
make  a  valid  disposition  thereof,  including  a  husband's  right  as  tenant 
by  the  curtesy  or  the  right  of  a  husband  to  succeed  to  the  personal 
property  of  his  wife  who  dies  intestate  leaving  no  descendants  her 
surviving. 

Amendment  by  Laws  of  1911,  Chap.  800, 

In  effect  July  28, 1911,  amended  sections  230, 240,  and  241,to  wit: 

Section  1.  Sections  two  hundred  and  thirty,  two  hun- 
dred and  forty  and  two  hundred  and  forty-one  of  chapter 
sixty-two  of  the  laws  of  nineteen  hundred  and  nine,  en-    62,  §§  230, ' 
titled  "An  act  in  relation  to  taxation,  constituting  chapter   funded, 
sixty  of  the  consolidated  laws,"  are  hereby  amended  to 
read,  respectively,  as  follows : 

§  230.  Proceedings  by  appraiser.  In  each  county  in  which  the 
office  of  appraiser  is  not  salaried  the  county  treasurer  shall  act  as  ap-, 
praiser.  The  surrogate,  either  upon  his  own  motion,  or  upon  the  ap- 
plication of  any  interested  person,  including  the  state  comptroller, 
shall  by  order  direct  the  person  or  one  of  the  persons  appointed  pur- 
suant to  section  two  hundred  and  twenty-nine  of  this  article  in  coun- 
ties in  which  the  office  of  appraiser  is  salaried,  and  in  other  counties, 
the  county  treasurer,  to  fix  the  fair  market  value  of  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  any  tax  imposed  by 
this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by  mail  to  all  per- 
sons known  to  have  a  claim  or  interest  in  the  property  to  be  appraised, 
including  the  state  comptroller,  and  to  such  persons  as  the  surrogate 
may  by  order  direct,  of  the  time  and  place  when  he  will  appraise  such 
property.  He  shall  at  such  time  and  place  appraise  the  same  at  its 
fair  market  value  as  herein  prescribed;  and  for  that  purpose  the  said 
appraiser  is  authorized  to  issue  subpoenas  and  to  compel  the  attend- 
ance of  witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof;  and  he 
shall  make  report  thereof  and  of  such  value  in  writing,  to  the  said  sur- 
rogate, together  with  the  depositions  of  the  witnesses  examined,  and 

1  Following  sentence  new. 

34 


530  PRIOR   STATUTES 

such  other  facts  in  relation  thereto  and  to  said  matter  as  the  surrogate 
may  order  or  require.  Every  appraiser,  except  in  the  counties  in  which 
the  office  of  appraiser  is  salaried,  for  which  provision  is  hereinbefore 
made,  shall  be  paid  by  the  state  comptroller  and  after  the  audit  of 
said  state  comptroller,  his  actual  and  necessary  traveling  expenses 
and  the  fees  paid  such  witnesses,  which  fees  shall  be  the  same  as  those 
now  paid  to  witnesses  subpoenaed  to  attend  in  courts  of  record,  pay- 
ment to  be  made  out  of  funds  in  the  hands  of  the  county  treasurer  of 
the  proper  county  on  account  of  the  tax  imposed  under  the  provisions 
of  this  article. 

The  value  of  every  future  or  limited  estate,  income,  interest  or  an- 
nuity dependent  upon  any  life  or  lives  in  being,  shall  be  determined 
by  the  rule,  method  and  standard  of  mortality  and  value  employed 
by  the  superintendent  of  insurance  in  ascertaining  the  value  of  policies 
of  life  insurance  and  annuities  for  the  determination  of  liabilities  of 
life  insurance  companies,  except  that  the  rate  of  interest  for  making 
such  computation  shall  be  five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the 
beneficial  enjoyment  or  possession  whereof  there  are  persons  or  cor- 
poration^ presently  entitled  thereto,  no  allowance  shall  be  made  on 
account  of  any  contingent  incumbrance  thereon,  nor  on  account  of 
any  contingency  upon  the  happening  of  which  the  estate  or  property 
or  some  part  thereof  or  interest  therein  might  be  abridged,  defeated 
or  diminished;  provided,  however,  that  in  the  event  of  such  incum- 
brance taking  effect  as  an  actual  burden  upon  the  interest  of  the  bene- 
ficiary, or  in  the  event  of  the  abridgment,  defeat  or  diminution  of  said 
estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall  be 
made  to  the  person  properly  entitled  thereto  of  a  proportionate  amount 
of  such  tax  on  account  of  the  incumbrance  when  talcing  effect,  or  so 
much  as  will  reduce  the  same  to  the  amount  which  would  have  been 
assessed  on  account  of  the  actual  duration  or  extent  of  the  estate  or 
interest  enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner  pro- 
vided by  section  two  hundred  and  twenty-five  of  this  article. 

Where  any  property  shall,  after  the  passage  of  this  chapter,  be 
transferred  subject  to  any  charge,  estate  or  interest,  determinable  by 
the  death  of  any  person,  or  at  any  period  ascertainable  only  by  refer- 
ence to  death,  the  increase  accruing  to  any  person  or  corporation  upon 
the  extinction  or  determination  of  such  charge,  estate  or  interest,  shall 
be  deemed  a  transfer  of  property  taxable  under  the  provisions  of  this 
article  in  the  same  manner  as  though  the  person  or  corporation  bene- 
ficially entitled  thereto  had  then  acquired  such  increase  from  the  per- 
son from  whom  the  title  to  their  respective  estates  or  interests  is  de- 
rived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights, 
interest  or  estates  of  the  transferees  are  dependent  upon  contingencies 
or  conditions  whereby  they  may  be  wholly  or  in  part  created,  de- 


LAWS   OF    1911,    CHAP.    800  531 

feated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer 
at  the  highest  rate  which,  on  the  happening  of  any  of  the  said  contin- 
gencies or  conditions,  would  be  possible  under  the  provisions  of  this 
article,  and  such  tax  so  imposed  shall  be  due  and  payable  forthwith 
by  the  executors  or  trustees  out  of  the  property  transferred,  and  the 
surrogate  shall  enter  a  temporary  order  determining  the  amount  of 
said  tax  in  accordance  with  this  provision; 1  provided,  however,  that 
on  the  happening  of  any  contingency  whereby  the  said  property,  or 
any  part  thereof,  is  transferred  to  a  person  or  corporation  exempt 
from  taxation  under  the  provisions  of  this  article,  or  to  any  person 
taxable  at  a  rate  less  than  the  rate  imposed  and  paid,  such  person  or 
corporation  shall  be  entitled  to  a  return  of  so  much  of  the  tax  imposed 
and  paid  as  is  the  difference  between  the  amount  paid  and  the  amount 
which  said  person  or  corporation  should  pay  under  the  provisions  of 
this  article;  2and  the  executor  or  trustee  of  each  estate,  or  the  legal 
representative  having  charge  of  the  trust  fund,  shall  immediately 
upon  the  happening  of  said  contingencies  or  conditions  apply  to  the 
surrogate  of  the  proper  county,  upon  a  verified  petition  setting  forth 
all  the  facts,  and  giving  at  least  ten  days'  notice  by  mail  to  all  interested 
persons  or  corporations,  for  an  order  modifying  the  temporary  taxing 
order  of  said  surrogate  so  as  to  provide  for  the  final  assessment  and 
determination  of  the  tax  in  accordance  with  the  ultimate  transfer  or 
devolution  of  said  property.  Such  return  of  overpayment  shall  be 
made  in  the  manner  provided  by  section  two  hundred  and  twenty-five 
of  this  article. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken 
or  where  the  taxation  thereof  has  been  held  in  abeyance,  shall  be  ap- 
praised at  their  full,  undiminished  value  when  the  persons  entitled 
thereto  shall  come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation  theretofore 
made  of  the  particular  estates  for  purposes  of  taxation,  upon  which 
said  estates  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or 
omission  of  the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no 
possibility  of  such  divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one  of  which 
duplicates  shall  be  filed  in  the  office  of  the  surrogate  and  the  other  in 
the  office  of  the  state  comptroller. 

§  240.  Reports  of  county  treasurer.  Each  county  treasurer  in  a 
county  in  which  the  office  of  appraiser  is  not  salaried  shall  make  a 
report,  under  oath,  to  the  state  comptroller,  on  January,  April,  July 

1  Words  "and  the  surrogate  shall  .  .  .  with  this  provision,"  new. 

2  Remainder  of  sentence  formerly  read:  "with  interest  thereon  at  the 
rate  of  three  per  centum  per  annum  from  the  time  of  payment." 


532  PRIOR   STATUTES 

and  October  first  of  each  year,  of  all  taxes  received  by  him  under  this 
article,  stating  for  what  estate  and  by  whom  and  when  paid.  The 
form  of  such  report  may  be  prescribed  by  the  state  comptroller.  He 
shall,  at  the  same  time,  pay  the  state  treasurer  all  taxes  received  by 
him  under  this  article  and  not  previously  paid  into  the  state  treasury, 
except  as  provided  hi  the  next  section,1  and  for  all  such  taxes  collected 
by  him  and  not  paid  into  the  state  treasury  within  thirty  days  from 
the  times  herein  required,  he  shall  pay  interest  at  the  rate  of  ten  per 
centum  per  annum. 

§241.  Report  of  state  comptroller,  payment  of  taxes;  refunds  in 
certain  cases.2  The  state  comptroller  shall  deposit  all  taxes  collected 
by  him  under  this  article,  except  as  hereinafter  otherwise  provided,3 
hi  a  responsible  bank,  banking  house  or  trust  company  hi  the  city  of 
Albany,  which  shall  pay  the  highest  rate  of  interest  to  the  state  for 
such  deposit,  to  the  credit  of  the  state  *comproller  on  account  of  the 
transfer  tax.  And  every  such  bank,  banking  house  or  trust  com- 
pany shall  execute  and  file  in  his  office  an  undertaking  to  the  state,  in 
the  sum,  and  with  such  sureties,  as  are  required  and  approved  by  the 
comptroller,  for  the  safe  keeping  and  prompt  payment  on  legal  demand 
therefor  of  all  such  moneys  held  by  or  on  deposit  in  such  bank,  banking 
house  or  trust  company,  with  interest  thereon  on  daily  balances  at 
such  rate  as  the  comptroller  may  fix.  Every  such  undertaking  shall 
have  indorsed  thereon,  or  annexed  thereto,  the  approval  of  the  attorney- 
general  as  to  its  form.  The  state  comptroller  shall  on  the  first  day  of 
each  month  make  a  verified  return  to  the  state  treasurer  of  all  taxes 
received  by  him  under  this  article,  stating  for  what  estate,  and  by  whom 
and  when  paid;  and  shall  credit  himself  with  all  expenditures  made 
since  his  last  previous  return  on  account  of  such  taxes,  for  salary, 
refunds  or  other  purposes  lawfully  chargeable  thereto.  He  shall  on 
or  before  the  tenth  day  of  each  month  pay  to  the  state  treasurer  the 
balance  of  such  taxes  remaining  in  his  hands  at  the  close  of  business 
on  the  last  day  of  the  previous  month,  as  appears  from  such  re- 
turns. 

4  Whenever  the  tax  on  a  contingent  remainder  has  been  determined 
at  the  highest  rate  which  on  the  happening  of  any  of  said  contingencies 
or  conditions  would  be  possible  under  the  provisions  of  this  article, 
the  state  comptroller,  in  the  counties  wherein  this  tax  is  payable  direct 
to  him,  and  in  all  other  counties  the  treasurer  of  said  counties,  respec- 
tively, when  such  tax  is  paid  shall  retain  and  hold  to  the  credit  of  said 
estate  so  much  of  the  tax  assessed  upon  such  contingent  remainders 
as  represents  the  difference  between  the  tax  at  the  highest  rate  and 

*  So  in  original. 

1  Words  "except  as  provided  in  the  next  section,"  new. 

*  Words  "refunds  in  certain  cases,"  new. 

3  Words  "except  as  hereinafter  otherwise  provided,"  new. 

4  Remainder  of  section  new, 


LAWS    OF    1911,    CHAP.    800  533 

the  tax  upon  such  remainders  which  would  be  due  if  the  contingencies 
or  conditions  had  happened  at  the  date  of  the  appraisal  of  said  estate, 
and  the  state  comptroller  or  the  county  treasurer  shall  deposit  the 
amount  of  tax  so  retained  hi  some  solvent  trust  company  or  trust  com- 
panies or  savings  banks  hi  this  state,  to  the  credit  of  such  estate,  pay- 
ing the  interest  thereon  when  collected  by  him  to  the  executor  or 
trustee  of  said  estate,  to  be  applied  by  said  executor  or  trustee  as  pro- 
vided by  the  decedent's  will.  Upon  the  happening  of  the  contingencies 
or  conditions  whereby  the  remainder  ultimately  vests  in  possession, 
if  the  remainder  then  passes  to  persons  taxable  at  the  highest  rate,  the 
state  comptroller  or  the  county  treasurer  shall  turn  over  the  amount 
so  retained  by  him  to  the  state  treasurer  as  provided  herein  and  by 
section  two  hundred  and  forty  of  this  article,  or  if  the  remainder  ulti- 
mately vests  in  persons  taxable  at  a  lower  rate  or  a  person  or  corpora- 
tion exempt  from  taxation  by  the  provisions  of  this  article,  the  state 
comptroller  or  the  county  treasurer  shall  refund  any  excess  of  tax  so 
held  by  him  to  the  executor  or  trustee  of  the  estate,  to  be  disposed  of 
by  said  executor  or  trustee  as  provided  by  the  decedent's  will.  Execu- 
tors or  trustees  of  any  estate  may  elect  to  assign  to  and  deposit  with 
the  state  comptroller  or  the  county  treasurer,  bonds  or  other  securities 
of  the  estate  approved  by  the  state  comptroller,  or  the  county  treas- 
urer, both  as  to  the  form  of  the  collateral  and  the  amount  thereof, 
for  the  purpose  of  securing  the  payment  of  the  difference  between  the 
tax  on  said  remainder  at  the  highest  rate  and  the  tax  upon  said  re- 
mainder which  would  be  due  if  the  contingencies  or  conditions  had 
happened  at  the  date  of  the  appraisal  of  said  estate,  and  cash  for  the 
balance  of  said  tax  as  assessed,  which  said  bonds  or  other  securities 
shall  be  held  by  the  state  comptroller,  or  the  county  treasurer,  to  the 
credit  of  said  estate  until  the  actual  vesting  of  said  remainders,  the 
income  therefrom  when  received  by  the  state  comptroller  or  the  county 
treasurer  to  be  paid  over  to  the  executor  or  trustee  during  the  con- 
tinuance of  the  trust  estates  and  then  to  be  finally  disposed  of  in  ac- 
cordance with  the  ultimate  transfer  or  devolution  of  said  remainders 
as  hereinbefore  provided;  and  it  shall  be  the  duty  of  the  executors  or 
trustees  of  such  estates  to  forthwith  notify  the  state  comptroller  of  the 
actual  vesting  of  all  such  contingent  remainders. 

If  any  executor  or  trustee  shall  have  deposited  with  the  state  comp- 
troller, or  the  county  treasurer,  cash  or  securities,  or  both  cash  and 
securities,  to  an  amount  in  excess  of  the  sum  necessary  to  pay  the 
transfer  tax  upon  such  contingent  remainders  at  the  highest  rate  as 
aforesaid,  the  excess  of  tax  so  deposited  shall  be  returned  to  the  execu- 
tor or  trustee,  or  if  any  executor  or  trustee  shall  have  deposited  with 
the  state  comptroller,  or  the  county  treasurer,  cash  or  securities,  or 
both  cash  and  securities,  to  an  amount  less  than  is  sufficient  to  pay  the 
tax  upon  such  contingent  remainders  as  finally  assessed  and  deter- 
mined, the  executor  or  trustee  of  said  estate  shall  forthwith,  upon  the 


534  PRIOR  STATUTES 

entry  of  the  order  determining  the  correct  amount  of  tax  due,  pay 
to  the  state  comptroller,  or  the  county  treasurer,  whichever  is  entitled 
under  the  provisions  of  this  article  to  receive  the  tax,  the  balance  due 
on  account  of  said  tax. 

Amendment  by  Laws  of  1912,  Chap.  206 

In  effect  April  8,  1912,  amends  section  221,  vide  supra,  page  42. 

Amendment  by  Laws  of  1913,  Chaps.  356  and  795 

Amend  section  221,  supra,  page  42. 

Amendment  by  Laws  of  1913,  Chap.  639 

Adds  section  221b,  supra,  page  43. 


DECEDENT  ESTATE  LAW 

Laws  1909,  chap.  18,  as  amended  by  Laws  1909,  chaps.  240 
and  304;  Laws  1911,  chaps.  244  and  867;  Laws  1912,  chap.  384 
and  by  Laws  1913,  chaps.  153  and  489. 

CHAPTER  13  OF  THE  CONSOLIDATED  LAWS 
DECEDENT  ESTATE  LAW 

Article  1.  Short  title  and  definitions  (§§  1,  2). 

2.  Wills'  (§§10-48). 

3.  Descent  and  distribution  (§§  80-104). 

4.  Executors,  administrators  and  testamentary  trustees 

(§§  110-122). 

5.  Laws  repealed;  when  to  take  effect  (§§  130, 131). 

ARTICLE  1 
Short  Title  and  Definitions 

Section  1.  Short  title. 
2.  Definitions. 

§  1.  Short  title.  This  chapter  shall  be  known  as  the  "De- 
cedent Estate  Law." 

§  2.  Definitions.  The  term  "will,"  as  used  hi  this  chapter, 
shall  include  all  codicils,  as  well  as  wills. 

ARTICLE  2 
Wills 

Section  10.  Who  may  devise. 

11.  What  real  property  may  be  devised. 

12.  Who  may  take  real  property  by  devise. 

14.  Wills  of  real  estate,  how  construed. 

15.  Who  may  make  wills  of  personal  estate. 

16.  Unwritten  wills  of  personal  property,  when  allowed. 

535 


536  DECEDENT   ESTATE    LAW 

Section  17.  Devise  or  bequest  to  certain  societies,  associations 
and  corporations. 

21.  Manner  of  execution  of  will. 

22.  Witnesses  to  will  to  write  names  and  places  of 

residence. 

23.  What  wills  may  be  proved. 

24.  Effect  of  change  of  residence  since  execution  of  will. 

25.  Application  of  certain  provisions  to  wills  previously 

made. 

26.  Child  born  after  making  of  will. 

27.  Devise  or  bequest  to  subscribing  witness. 

28.  Action  by  child  born  after  making  of  will,  or  by  sub- 

scribing witness. 

29.  Devise  or  bequest  to  child  or  descendant  or  to  a 

brother  or  sister  of  the  testator  not  to  lapse. 

30.  Reception  of  wills  for  safe  keeping. 

31.  Sealing  and  indorsing  wills  received  for  safe  keep- 

ing. 

32.  Delivery  of  wills  received  for  safe  keeping. 

33.  Opening  wills  received  by  surrogate  for  safe  keeping. 

34.  Revocation  and  cancellation  of  written  wills. 

35.  Revocation  by  marriage  and  birth  of  issue. 

36.  Will  of  unmarried  woman. 

37.  Bond  or  agreement  to  convey  property  devised  or 

bequeathed  not  a  revocation. 

38.  Charge  or  incumbrance  not  a  revocation. 

39.  Conveyance,  when  not  to  be  deemed  a  revocation. 

40.  Conveyance,  when  to  be  deemed  a  revocation. 

41.  Canceling  or  revocation  of  second  will  not  to  revive 

first. 

42.  Record  of  wills  in  county  clerk's  office. 

43.  County  clerk's  index  of  recorded  wills. 

44.  Recording  will  proved  in  another  state  or  foreign 

country.     (Amended  by  L.  1909,  ch.  240,  §  12.) 

45.  Authentication  of  papers  from  another  state  or  for- 

eign country  for  use  in  this  state. 

46.  Validity  of  purchase  notwithstanding  devise. 

47.  Validity  and  effect  of  testamentary  dispositions. 

48.  Application  of  certain  sections  in  this  article. 

§  10.  Who  may  devise.     All  persons,  except  idiots,  persons 
of  unsound  mind  and  infants,  may  devise  their  real  estate,  by  a 


MANNER   OF   EXECUTION    OF   WILL  537 

last  will  and  testament,  duly  executed,  according  to  the  pro- 
visions of  this  article. 

§  11.  What  real  property  may  be  devised.  Every  estate 
and  interest  in  real  property  descendible  to  heirs,  may  be 
so  devised. 

§  12.  Who  may  take  real  property  by  devise.  Such  a  de- 
vise of  real  property  may  be  made  to  every  person  capable  by 
law  of  holding  real  estate;  but  no  devise  to  a  corporation  shall  be 
valid,  unless  such  corporation  be  expressly  authorized  by  its 
charter,  or  by  statute,  to  take  by  devise. 

§  14.  Wills  of  real  estate,  how  construed.  Every  will  that 
shall  be  made  by  a  testator,  in  express  terms,  of  all  his  real 
estate,  or  in  any  other  terms  denoting  his  intent  to  devise  all  his 
real  property,  shall  be  construed  to  pass  all  the  real  estate,  which 
he  was  entitled  to  devise,  at  the  tune  of  his  death. 

§  15.  Who  may  make  wills  of  personal  estate.  Every  male 
person  of  the  age  of  eighteen  years  or  upwards,  and  every 
female  of  the  age  of  sixteen  years  or  upwards,  of  sound  mind 
and  memory,  and  no  others,  may  give  and  bequeath  his  or 
her  personal  estate,  by  will  in  writing. 

§  16.  Unwritten  wills  of  personal  property,  when  allowed. 

No  nuncupative  or  unwritten  will,  bequeathing  personal 
estate,  shall  be  valid,  unless  made  by  a  soldier  while  in  actual 
military  service,  or  by  a  mariner,  while  at  sea. 

§  17.  Devise  or  bequest  to  certain  societies,  associations 
and  corporations.  No  person  having  a  husband,  wife,  child  or 
parent,  shall,  by  his  or  her  last  will  and  testament,  devise 
or  bequeath  to  any  benevolent,  charitable,  literary,  scientific, 
religious  or  missionary  society,  association  or  corporation,  in 
trust  or  otherwise,  more  than  one-half  part  of  his  or  her  estate, 
after  the  payment  of  his  or  her  debts,  and  such  devise  or  bequest 
shall  be  valid  to  the  extent  of  one-half,  and  no  more. 

§  21.  Manner  of  execution  of  will.  Every  last  will  and 
testament  of  real  or  personal  property,  or  both,  shall  be  exe- 
cuted and  attested  in  the  following  manner: 

1.  It  shall  be  subscribed  by  the  testator  at  the  end  of  the  will. 


538  DECEDENT   ESTATE    LAW 

2.  Such  subscription  shall  be  made  by  the  testator  in  the 
presence  of  each  of  the  attesting  witnesses,  or  shall  be  acknowl- 
edged by  him,  to  have  been  so  made,  to  each  of  the  attesting 
witnesses. 

3.  The  testator,  at  the  time  of  making  such  subscription,  or  at 
the  time  of  acknowledging  the  same,  shall  declare  the  instrument 
so  subscribed,  to  be  his  last  will  and  testament. 

4.  There  shall  be  at  least  two  attesting  witnesses,  each  of 
whom  shall  sign  his  name  as  a  witness,  at  the  end  of  the  will,  at 
the  request  of  the  testator. 

§  22.  Witnesses  to  will  to  write  names  and  places  of  resi- 
dence. The  witnesses  to  any  will,  shall  write  opposite  to 
their  names  their  respective  places  of  residence;  and  every  per- 
son who  shall  sign  the  testator's  name  to  any  will  by  his  direc- 
tion, shall  write  his  own  name  as  a  witness  to  the  will.  Whoever 
shall  neglect  to  comply  with  either  of  these  provisions,  shall 
forfeit  fifty  dollars,  to  be  recovered  by  any  person  interested  in 
the  property  devised  or  bequeathed,  who  will  sue  for  the  same. 
Such  omission  shall  not  affect  the  validity  of  any  will;  nor  shall 
any  person  liable  to  the  penalty  aforesaid,  be  excused  or  in- 
capacitated on  that  account,  from  testifying  respecting  the 
execution  of  such  will. 

§  23.  What  wills  may  be  proved.  A  will  of  real  or  personal 
property,  executed  as  prescribed  by  the  laws  of  the  state, 
or  a  will  of  personal  property  executed  without  the  state,  and 
within  the  United  States,  the  Dominion  of  Canada,  or  the  King- 
dom of  Great  Britain  and  Ireland,  as  prescribed  by  the  laws  of 
the  state  or  country  where  it  is  or  was  executed,  or  a  will  of 
personal  property  executed  by  a  person  not  a  resident  of  the 
state,  according  to  the  laws  of  the  testator's  residence,  may  be 
admitted  to  probate  in  this  state. 

§  24.  Effect  of  change  of  residence  since  execution  of  will. 
The  right  to  have  a  will  admitted  to  probate,  the  validity  of 
the  execution  thereof,  or  the  validity  or  construction  of  any 
provision  contained  therein,  is  not  affected  by  a  change  of 
tne  testator's  residence  made  since  the  execution  of  the  will. 

§  25.  Application  of  certain  provisions  to  wills  previously 
made.  The  last  two  sections  apply  only  to  a  will  executed  by  a 


DEVISE    OR   BEQUEST   TO    SUBSCRIBING   WITNESS      539 

person  dying  after  April  eleventh,  eighteen  hundred  and  seventy- 
six,  and  they  do  not  invalidate  a  will  executed  before  that 
date,  which  would  have  been  valid  but  for  the  enactment  of 
sections  one  and  two  of  chapter  one  hundred  and  eighteen  of  the 
laws  of  eighteen  hundred  and  seventy-six,  except  where  such  a 
will  is  revoked  or  altered,  by  a  will  which  those  sections  ren- 
dered valid,  or  capable  of  being  proved  as  prescribed  in  article 
first  of  title  third  of  chapter  eighteen  of  the  code  of  civil  pro- 
cedure. 

§  26.  Child  born  after  making  of  will.  Whenever  a  testator 
shall  have  a  child  born  after  the  making  of  a  last  will,  either 
in  the  lifetime  or  after  the  death  of  such  testator,  and  shall 
die  leaving  such  child,  so  after-born,  unprovided  for  by  any 
settlement,  and  neither  provided  for,  nor  in  any  way  men- 
tioned in  such  will,  every  such  child  shall  succeed  to  the  same 
portion  of  such  parent's  real  and  personal  estate,  as  would  have 
descended  or  been  distributed  to  such  child,  if  such  parent  had 
died  intestate,  and  shall  be  entitled  to  recover  the  same  portion 
from  the  devisees  and  legatees,  in  proportion  to  and  out  of  the 
parts  devised  and  bequeathed  to  them  by  such  will. 

§  27.  Devise  or  bequest  to  subscribing  witness.  If  any 
person  shall  be  a  subscribing  witness  to  the  execution  of  any 
will,  wherein  any  beneficial  devise,  legacy,  interest  or  ap- 
pointment of  any  real  or  personal  estate  shall  be  made  to  such 
witness,  and  such  will  can  not  be  proved  without  the  testimony 
of  such  witness,  the  said  devise,  legacy,  interest  or  appoint- 
ment shall  be  void,  so  far  only  as  concerns  such  witness,  or  any 
claiming  under  him;  and  such  person  shall  be  a  competent  wit- 
ness, and  compellable  to  testify  respecting  the  execution  of  the 
said  will,  in  like  manner  as  if  no  such  devise  or  bequest  had  been 
made. 

But  if  such  witness  would  have  been  entitled  to  any  share  of 
the  testator's  estate,  in  case  the  will  was  not  established,  then  so 
much  of  the  share  that  would  have  descended,  or  have  been 
distributed  to  such  witness,  shall  be  saved  to  him,  as  will  not 
exceed  the  value  of  the  devise  or  bequest  made  to  him  in  the  will, 
and  he  shall  recover  the  same  of  the  devisees  or  legatees  named 
in  the  will,  in  proportion  to,  and  out  of,  the  parts  devised  and 
bequeathed  to  them. 


540  DECEDENT  ESTATE    LAW 

§  28.  Action  by  child  born  after  making  of  will,  or  by  sub- 
scribing witness.  A  child,  born  after  the  making  of  a  will, 
who  is  entitled  to  succeed  to  a  part  of  the  real  or  personal 
property  of  the  testator,  or  a  subscribing  witness  to  a  will, 
who  is  entitled  to  succeed  to  a  share  of  such  property,  may  main- 
tain an  action  against  the  legatees  or  devisees,  as  the  case  re- 
quires, to  recover  his  share  of  the  property;  and  he  is  subject  to 
the  same  liabilities,  and  has  the  same  rights,  and  is  entitled  to  the 
same  remedies,  to  compel  a  distribution  or  partition  of  the  prop- 
erty, or  a  contribution  from  other  persons  interested  in  the  es- 
tate, or  to  gain  possession  of  the  property,  as  any  other  person 
who  is  so  entitled  to  succeed. 

§  29.  Devise  or  bequest  to  child  or  descendant,  or  to  a  brother 
or  sister  of  the  testator  not  to  lapse.  Whenever  any  estate,  real 
or  personal,  shall  be  devised  or  bequeathed  to  a  child  or  other 
descendant  of  the  testator,  or  to  a  brother  or  sister  of  the  testa- 
tor, and  such  legatee  or  devisee  shall  die  during  the  lifetime  of 
the  testator,  leaving  a  child  or  other  descendant  who  shall  sur- 
vive such  testator,  such  devise  or  legacy  shall  not  lapse,  but  the 
property  so  devised  or  bequeathed  shall  vest  in  the  surviving 
child  or  other  descendant  of  the  legatee  or  devisee,  as  if  such 
legatee  or  devisee  had  survived  the  testator  and  had  died  intes- 
tate. (As  amended  by  L.  1912,  ch.  S84,  in  effect  May  5,  1912.) 

§  30.  Reception  of  wills  for  safe  keeping.  The  clerk  of 
every  county  in  this  state,  the  register  of  deeds  in  the  city 
and  county  of  New  York,  and  the  surrogate  of  every  county, 
upon  being  paid  the  fees  allowed  therefor  by  law,  shall  receive 
and  deposit  in  their  offices  respectively,  any  last  will  or  testa- 
ment which  any  person  shall  deliver  to  them  for  that  purpose, 
and  shall  give  a  written  receipt  therefor  to  the  person  depositing 
the  same. 

§  31.  Sealing  and  indorsing  wills  received  for  safe  keeping. 
Such  will  shall  be  inclosed  in  a  sealed  wrapper,  so  that  the 
contents  thereof  can  not  be  read,  and  shall  have  indorsed 
thereon  the  name  of  the  testator,  his  place  of  residence,  and  the 
day,  month  and  year  when  delivered;  and  shall  not,  on  any  pre- 
text whatever,  be  opened,  read  or  examined,  until  delivered  to  a 
person  entitled  to  the  same,  as  hereinafter  directed. 


REVOCATION   BY   MARRIAGE   AND    BIRTH    OF   ISSUE      541 

§  32.  Delivery  of  wills  received  for  safe  keeping.  Such  will 
shall  be  delivered  only, 

1.  To  the  testator  in  person;  or, 

2.  Upon  his  written  order,  duly  proved  by  the  oath  of  a  sub- 
scribing witness;  or, 

3.  After  his  death  to  the  persons  named  in  the  indorsement  on 
the  wrapper  of  such  will,  if  any  such  indorsement  be  made 
thereon;  or, 

4.  If  there  be  no  such  indorsement,  and  if  the  same  shall  have 
been  deposited  with  any  other  officer  than  a  surrogate,  then  to 
the  surrogate  of  the  county. 

§  33.  Opening  wills  received  by  surrogate  for  safe  keeping. 
If  such  will  shall  have  been  deposited  with  a  surrogate,  or 
shall  have  been  delivered  to  him  as  above  prescribed,  such 
surrogate,  after  the  death  of  the  testator,  shall  publicly  open  and 
examine  the  same,  and  make  known  the  contents  thereof,  and 
shall  file  the  same  in  his  office,  there  to  remain  until  it  shall  have 
been  duly  proved,  if  capable  of  proof,  and  then  to  be  delivered 
to  the  person  entitled  to  the  custody  thereof ;  or  until  required  by 
the  authority  of  some  competent  court  to  produce  the  same  in 
such  court. 

§  34.  Revocation  and  cancellation  of  written  wills.  No 
will  in  writing,  except  in  the  cases  hereinafter  mentioned, 
nor  any  part  thereof,  shall  be  revoked,  or  altered,  otherwise 
than  by  some  other  will  hi  writing,  or  some  other  writing  of 
the  testator,  declaring  such  revocation  or  alteration,  and  exe- 
cuted with  the  same  formalities  with  which  the  will  itself  was 
required  by  law  to  be  executed;  or  unless  such  will  be  burnt, 
torn,  canceled,  obliterated  or  destroyed,  with  the  intent  and  for 
the  purpose  of  revoking  the  same,  by  the  testator  himself,  or  by 
another  person  in  his  presence,  by  his  direction  and  consent;  and 
when  so  done  by  another  person,  the  direction  and  consent  of  the 
testator,  and  the  fact  of  such  injury  or  destruction,  shall  be 
proved  by  at  least  two  witnesses. 

§  36.  Revocation  by  marriage  and  birth  of  issue.  If  after 
the  making  of  any  will,  disposing  of  the  whole  estate  of  the 
testator,  such  testator  shall  marry,  and  have  issue  of  such  mar- 
riage, born  either  in  his  lifetime  or  after  his  death,  and  the  wife 
or  the  issue  of  such  marriage  shall  be  living  at  the  death  of  the 


542  DECEDENT   ESTATE    LAW 

testator,  such  will  shall  be  deemed  revoked,  unless  provision 
shall  have  been  made  for  such  issue  by  some  settlement,  or 
unless  such  issue  shall  be  provided  for  in  the  will,  or  in  such  way 
mentioned  therein,  as  to  show  an  intention  not  to  make  such  pro- 
vision; and  no  other  evidence  to  rebut  the  presumption  of  such 
revocation,  shall  be  received. 

§  36.  Will  of  unmarried  woman.  A  will  executed  by  an 
unmarried  woman,  shall  be  deemed  revoked  by  her  subsequent 
marriage. 

§  37.  Bond  or  agreement  to  convey  property  devised  or  be- 
queathed not  a  revocation.  A  bond,  agreement,  or  covenant, 
made  for  a  valuable  consideration,  by  a  testator,  to  convey 
any  property  devised  or  bequeathed  in  any  will  previously 
made,  shall  not  be  deemed  a  revocation  of  such  previous  de- 
vise or  bequest,  either  at  law  or  in  equity;  but  such  property 
shall  pass  by  the  devise  or  bequest,  subject  to  the  same  remedies 
on  such  bond,  agreement  or  covenant,  for  a  specific  performance 
or  otherwise,  against  the  devisees  or  legatees,  as  might  be  had  by 
law  against  the  heirs  of  the  testator,  or  his  next  of  kin,  if  the  same 
had  descended  to  them. 

§  38.  Charge  or  incumbrance  not  a  revocation.  A  charge 
or  incumbrance  upon  any  real  or  personal  estate,  for  the 
purpose  of  securing  the  payment  of  money,  or  the  performance 
of  any  covenant,  shall  not  be  deemed  a  revocation  of  any  will 
relating  to  the  same  estate,  previously  executed;  but  the  devises 
and  legacies  therein  contained,  shall  pass  and  take  effect,  subject 
to  such  charge  or  incumbrance. 

§  39.  Conveyance,  when  not  to  be  deemed  a  revocation. 
A  conveyance,  settlement,  deed,  or  other  act  of  a  testator, 
by  which  his  estate  or  interest  in  property,  previously  devised 
or  bequeathed  by  him,  shall  be  altered,  but  not  wholly  di- 
vested, shall  not  be  deemed  a  revocation  of  the  devise  or  bequest 
of  such  property;  but  such  devise  or  bequest  shall  pass  to  the 
devisee  or  legatee,  the  actual  estate  or  interest  of  the  testator, 
which  would  otherwise  descend  to  his  heirs,  or  pass  to  his  next 
of  kin;  unless  in  the  instrument  by  which  such  alteration  is 
made,  the  intention  is  declared,  that  it  shall  operate  as  a  revoca- 
tion of  such  previous  devise  or  bequest. 


COUNTY  CLERK'S  INDEX  OF  RECORDED  WILLS    543 

§  40.  Conveyance,  when  to  be  deemed  a  revocation.     But 

if  the  provisions  of  the  instrument  by  which  such  alteration 
is  made,  are  wholly  inconsistent  with  the  terms  and  nature 
of  such  previous  devise  or  bequest,  such  instrument  shall 
operate  as  a  revocation  thereof,  unless  such  provisions  depend 
on  a  condition  or  contingency,  and  such  condition  be  not  per- 
formed, or  such  contingency  do  not  happen. 

§  41.  Canceling  or  revocation  of  second  will  not  to  revive 
first.  If,  after  the  making  of  any  will,  the  testator  shall  duly 
make  and  execute  a  second  will,  the  destruction,  canceling 
or  revocation  of  such  second  will,  shall  not  revive  the  first  will, 
unless  it  appear  by  the  terms  of  such  revocation,  that  it  was  his 
intention  to  revive  and  give  effect  to  his  first  will;  or  unless 
after  such  destruction,  canceling  or  revocation,  he  shall  duly 
republish  his  first  will. 

§  42.  Record  of  wills  in  county  clerk's  office.  A  will  of 
real  property,  which  has  been,  at  any  time,  either  before  or 
after  this  chapter  takes  effect  duly  proved  in  the  supreme 
court,  or  the  court  of  chancery,  or  before  a  surrogate  of  the 
state  with  the  certificate  of  proof  thereof  annexed  thereto,  or 
indorsed  thereon,  or  an  exemplified  copy  thereof,  may  be  re- 
corded in  the  office  of  the  clerk  or  the  register,  as  the  case  re- 
quires, of  any  county  in  the  state,  in  the  same  manner  as  a  deed 
of  real  property.  Where  the  will  relates  to  real  property,  the 
executor  or  administrator,  with  the  will  annexed,  must  cause  the 
same,  or  an  exemplified  copy  thereof,  to  be  so  recorded,  in  each 
county  where  real  property  of  the  testator  is  situated,  within 
twenty  days  after  letters  are  issued  to  him.  An  exemplification 
of  the  record  of  such  a  will,  from  any  surrogate's  or  other  office 
where  the  same  has  been  so  recorded,  either  before  or  after  this 
chapter  takes  effect,  may  be  in  like  manner  recorded  in  the  office 
of  the  clerk  or  register  of  any  county.  Such  a  record  or  exempli- 
fication, or  an  exemplification  of  the  record  thereof,  must  be 
received  in  evidence,  as  if  the  original  will  was  produced  and 
proved. 

§  43.  County  clerk's  index  of  recorded  wills.  Upon  record- 
ing a  will  or  exemplification,  as  prescribed  in  the  last  section, 
the  clerk  or  register  must  index  it  in  the  same  books,  and  sub- 
stantially in  the  same  manner,  as  if  it  was  a  deed  recorded  in  his 
office. 


544  DECEDENT   ESTATE    LAW 

§  44.  Recording  will  proved  in  another  state  or  foreign 
country.  Where  real  property  situated  within  this  state, 
or  an  interest  therein,  is  devised  or  made  subject  to  a  power 
of  disposition  by  a  will  duly  executed  in  conformity  with  the 
laws  of  this  state,  of  a  person  who  was  at  the  tune  of  his,  or  her 
death,  a  resident  elsewhere  within  the  United  States,  or  in  a 
foreign  country,  and  such  will  has  been  admitted  to  probate 
within  the  state  or  territory,  or  foreign  country,  where  the  de- 
cedent so  resided,  and  is  filed  or  recorded  in  the  proper  office  as 
prescribed  by  the  laws  of  that  state  or  territory  or  foreign  coun- 
try, a  copy  of  such  will  or  of  the  record  thereof  and  of  the  proofs 
or  of  the  records  thereof,  or  if  the  proofs  are  not  on  file  or  re- 
corded in  such  office,  of  any  statement,  on  file  or  recorded  in  such 
office,  of  the  substance  of  the  proofs,  authenticated  as  prescribed 
in  section  forty-five  of  this  chapter,  or  if  no  proofs  and  no  state- 
ment of  the  substance  of  the  proofs  be  on  file  or  recorded  in 
such  office,  a  copy  of  such  will  or  of  the  record  thereof,  au- 
thenticated as  prescribed  in  said  section  forty-five,  accom- 
panied by  a  certificate  that  no  proofs  or  statement  of  the  sub- 
stance of  proof  of  such  will,  are  or  is  on  file  or  recorded  in  such 
office,  made  and  likewise  authenticated  as  prescribed  in  said  sec- 
tion forty-five,  may  be  recorded  in  the  office  of  the  surro- 
gate of  any  county  in  this  state  where  such  real  property  is 
situated;  and  such  record  in  the  office  of  such  surrogate  or  an 
exemplified  copy  thereof  shall  be  presumptive  evidence  of  such 
will  and  of  the  execution  thereof,  in  any  action  or  special  pro- 
ceeding relating  to  such  real  property.  (Thus  amended  by  L. 
1909,  ch.  240,  §  13,  in  effect  April  22, 1909.) 

Amendment  of  1909  changed  the  word  "found"  to  "proved"  in  the  title 
to  the  section. 

§  45.  Authentication  of  papers  from  another  state  or  for- 
eign country  for  use  in  this  state.  To  entitle  a  copy  of  a  will 
admitted  to  probate  or  of  letters  testamentary  or  of  letters 
of  administration,  granted  in  any  other  state  or  in  any  ter- 
ritory of  the  United  States,  and  of  the  proofs  or  of  any  statement 
of  the  substance  of  the  proofs  of  any  such  will,  or  of  the  record  of 
any  such  will,  letters,  proofs  or  statement,  to  be  recorded  or  used 
in  this  state  as  provided  in  article  seventh  of  title  third  of  chap- 
ter eighteenth  of  the  code  of  civil  procedure  or  in  section  forty- 
four  of  this  chapter,  such  copy  must  be  authenticated  by  the 
seal  of  the  court  or  officer  by  which  or  whom  such  will  was  ad- 


PAPERS    FROM   ANOTHER   STATE,    ETC.  545 

mitted  to  probate  or  such  letters  were  granted,  or  having  the 
custody  of  the  same  or  of  the  record  thereof,  and  the  signature 
of  a  judge  of  such  court  or  the  signature  of  such  officer  and  of  the 
clerk  of  such  court  or  officer  if  any;  and  must  be  further  au- 
thenticated by  a  certificate  under  the  great  or  principal  seal  of 
such  state  or  territory,  and  the  signature  of  the  officer  who  has 
the  custody  of  such  seal,  to  the  effect  that  the  court  or  officer  by 
which  or  whom  such  will  was  admitted  to  probate  or  such  letters 
were  granted,  was  duly  authorized  by  the  laws  of  such  state  or 
territory  to  admit  wills  to  probate  or  to  grant  letters  testamen- 
tary or  of  administration  and  to  keep  the  same  and  records 
thereof;  that  the  seal  of  such  court  or  officer  affixed  to  such 
copy  is  genuine,  and  that  the  officer  making  such  certificate 
under  such  seal  of  such  state  or  territory  verily  believes  that 
each  of  the  signatures  attesting  such  copy  is  genuine;  and 
to  entitle  any  certificate  concerning  proofs  accompanying  the 
copy  of  the  will  or  of  the  record  so  authenticated,  to  be  recorded 
or  used  in  this  state,  as  provided  in  said  article  or  section,  such 
certificate  must  be  under  the  seal  of  the  court  or  officer  by  which 
or  whom  such  will  was  admitted  to  probate,  or  having  the  cus- 
tody of  such  will  or  record,  and  the  signature  of  a  judge  or  the 
clerk  of  such  court,  or  the  signature  of  such  officer,  authenticated 
by  a  certificate  under  such  great  or  principal  seal  of  such  state  or 
territory,  and  the  signature  of  the  officer  having  the  custody 
thereof,  to  the  effect  that  the  seal  of  the  court  or  officer  affixed 
to  such  certificate  concerning  proofs  is  genuine,  and  that  such 
officer  making  such  certificate  under  such  seal  of  such  state  or 
territory,  verily  believes  that  the  signature  to  such  certificate 
concerning  proofs  is  genuine.  To  entitle  a  copy  of  a  will  admit- 
ted to  probate  or  of  letters  testamentary,  or  of  letters  of  admin- 
istration, granted  in  a  foreign  country,  and  of  the  proofs  or  of 
any  statement  of  the  substance  of  the  proofs  of  any  such  will, 
or  of  the  record  of  any  such  will,  letters,  proofs  or  statement,  to 
be  recorded  or  used  in  this  state,  as  provided  in  said  article  or 
section,  such  copy  must  be  authenticated  in  the  manner  pre- 
scribed by  the  laws  of  such  foreign  country,  and  must  be  further 
authenticated  by  a  certificate  of  a  judge  of  a  court  of  record 
or  by  the  chief  officer  of  the  department  of  justice  of  such 
foreign  country  to  the  effect  that  such  authentication  is  in 
conformity  with  the  laws  of  such  foreign  country,  and  that  the 
court  or  officer  by  which  or  by  whom  such  will  was  so  admitted 
to  probate,  or  such  letters  were  granted,  was  duly  authorized 
35 


54G  DECEDENT  ESTATE   LAW 

by  the  laws  of  such  foreign  country  to  admit  wills  to  probate, 
or  to  grant  letters  testamentary  or  of  administration,  and  to 
keep  the  same  and  records  thereof;  and  the  signature  and 
official  character  of  such  judge  or  court  of  record  or  of  such  chief 
officer  of  the  department  of  justice  shall  be  attested  by  a  consu- 
lar officer  of  the  United  States,  resident  in  such  foreign  country, 
under  the  seal  of  his  office;  and  to  entitle  any  certificate  con- 
cerning proofs  accompanying  the  copy  of  the  will  or  of  the 
records  so  authenticated,  to  be  used  and  recorded  in  this  state, 
as  provided  in  said  article  or  section,  such  certificate  concern- 
ing the  proofs  must  be  similarly  authenticated  and  attested. 
(Thus  amended  by  L.  1909,  ch.  304,  in  effect  September  1,  1909.) 

Amendment  of  1909  substituted  an  entirely  new  sentence  for  the  former 
second  sentence  which  read  as  follo.ws:  To  entitle  a  copy  of  a  will  admitted 
to  probate  or  of  letters  testamentary  or  of  letters  of  administration  granted 
in  a  foreign  country,  and  of  the  proofs  or  of  any  statement  of  the  substance 
of  the  proofs  of  any  such  will  or  of  the  record  of  any  such  will,  letters, 
proofs  or  statement  to  be  recorded  or  used  in  this  state,  as  provided  in  said 
article  or  section,  such  copy  must  be  authenticated  in  the  manner  prescribed 
by  the  laws  of  such  foreign  country  for  the  authentication  of  a  copy  of  such 
a  record  or  paper;  and  there  must  be  annexed  thereto  a  certificate  of  a 
consul-general,  vice-consul-general,  deputy-consul-general,  consul,  vice- 
consul  or  deputy  consul  of  the  United  Sta.tes  residing  within  the  country  in 
which  such  will  was  so  admitted  to  probate  or  such  letters  were  granted, 
under  his  seal  of  office  or  the  seal  of  the  consulate  to  which  he  is  attached,  to 
the  effect  that  such  authentication  is  regular  and  in  conformity  to  the  laws 
of  such  foreign  country,  and  also  that  the  court  or  officer  by  which  or  by 
whom  such  will  was  so  admitted  to  probate  or  such  letters  were  granted  was 
duly  authorized  by  the  laws  of  such  foreign  country  to  admit  wills  to 
probate  or  to  grant  letters  testamentary  or  of  administration  and  to  keep 
the  same  and  records  thereof;  and  to  entitle  any  certificate  concerning 
proofs  accompanying  the  copy  of  a  will,  or  of  the  record  so  authenticated,  to 
be  recorded  or  used  in  this  state,  as  provided  in  said  article  or  section,  such 
certificate  must  be  similarly  authenticated  and  there  must  be  annexed 
thereto  a  similar  certificate  by  a  consul-general,  vice-consul-general,  deputy- 
consul-general,  consul,  vice-consul  or  deputy  consul  of  the  United  States. 

§  46.  Validity  of  purchase  notwithstanding  devise.  The 
title  of  a  purchaser  in  good  faith  and  for  a  valuable  considera- 
tion, from  the  heir  of  a  person  who  died  seized  of  real  prop- 
erty, shall  not  be  affected  by  a  devise  of  the  property  made  by 
the  latter,  unless  within  four  years  after  the  testator's  death,  the 
will  devising  the  same  is  either  admitted  to  probate  and  re- 
corded as  a  will  of  real  property  in  the  office  of  the  surrogate 
having  jurisdiction,  or  established  by  the  final  judgment  of  a 
court  of  competent  jurisdiction  of  the  state,  in  an  action  brought 


APPLICATION  OF  CERTAIN  SECTIONS  IN  THIS  ARTICLE      547 

for  that  purpose.  But  if,  at  the  time  of  the  testator's  death,  the 
devisee  is  either  within  the  age  of  twenty-one  years,  or  insane,  or 
imprisoned  on  a  criminal  charge,  or  in  execution  upon  conviction 
of  a  criminal  offense,  for  a  term  less  than  for  life;  or  without  the 
state;  or,  if  the  will  was  concealed  by  one  or  more  of  the  heirs  of 
the  testator,  the  limitation  created  by  this  section  does  not  begin 
until  after  the  expiration  of  one  year  from  the  removal  of  such  a 
disability,  or  the  delivery  of  the  will  to  the  devisee  or  his  repre- 
sentative, or  to  the  proper  surrogate. 

§  47.  Validity  and  effect  of  testamentary  dispositions. 
The  validity  and  effect  of  a  testamentary  disposition  of  real 
property,  situated  within  the  state,  or  of  an  interest  in  real 
property  so  situated,  which  would  descend  to  the  heir  of  an  intes- 
tate, and  the  manner  in  which  such  property  or  such  an  interest 
descends,  where  it  is  not  disposed  of  by  will,  are  regulated  by  the 
laws  of  the  state,  without  regard  to  the  residence  of  the  decedent. 
Except  where  special  provision  is  otherwise  made  by  law,  the 
validity  and  effect  of  a  testamentary  disposition  of  any  other 
property  situated  within  the  state,  and  the  ownership  and  dis- 
position of  such  property,  where  it  is  not  disposed  of  by  will,  are 
regulated  by  the  laws  of  the  state  or  country,  of  which  the 
decedent  was  a  resident,  at  the  time  of  his  death.  Whenever  a 
decedent,  being  a  citizen  of  the  United  States,  wherever  resi- 
dent, shall  have  declared  in  his  will  and  testament  that  he 
elects  that  such  testamentary  disposition  shall  be  construed  and 
regulated  by  the  laws  of  this  state,  the  validity  and  effect  of 
such  dispositions  shall  be  determined  by  such  laws.  (As 
amended  by  L.  1911,  ch.  244)  in  effed  June  6, 1911.) 

§  48.  Application  of  certain  sections  in  this  article.  Section 
twenty-five  hundred  and  fourteen  of  the  code  of  civil  procedure 
is  applicable  to  the  provisions  of  sections  twenty-three  to 
twenty-five,  both  inclusive,  and  sections  forty-two  to  forty- 
seven,  both  inclusive,  of  this  chapter.  (Added  by  L.  1909, 
ch.  240,  §  16,  in  effect  April  22, 1909.) 


548  DECEDENT   ESTATE    LAW 

ARTICLE  3 
Descent  and  Distribution 

Section    80.  Definitions  and  use  of  terms;  effect  of  article. 

81.  General  rule  of  descent. 

82.  Lineal  descendants  of  equal  degree. 

83.  Lineal  descendants  of  unequal  degree. 

84.  When  father  inherits. 

85.  When  mother  inherits. 

86.  When  collateral  relatives  inherit;  collateral  rela- 

tives of  equal  degree. 

87.  Brothers  and  sisters  and  their  descendants. 

88.  Brothers  and  sisters  of  father  and  mother  and  their 

descendants  and  grandparents. 

89.  Illegitimate  children. 

90.  Relatives  of  the  half-blood. 

91.  Relatives  of  husband  or  wife. 

92.  Cases  not  hereinbefore  provided  for. 

93.  Posthumous  children  and  relatives. 

94.  Inheritance,  sole  or  in  common. 

95.  Alienism  of  ancestor. 

96.  Advancements  of  real  and  personal  estates. 

97.  How  advancement  adjusted. 

98.  Distribution  of  personal  property  of  decedent. 

99.  Advancements  of  personal  estates. 

100.  Estates  of  married  women. 

101.  Liability  of  heirs  and  devisees  for  debt  of  decedent. 

102.  Liability  of  heir  or  devisee  not  affected  where  will 

makes  specific  provision  for  payment  of  debt. 

103.  Action  against  husband  for  debts  of  deceased  wife. 

104.  Application  of  certain  sections  in  this  article. 

§  80.  Definitions  and  use  of  terms ;  effect  of  article. 

1.  The  term  "real  property"  as  used  in  this  article,  includes 
every  estate,  interest  and  right,  legal  and  equitable,  in  lands, 
tenements  and  hereditaments,  except  such  as  are  determined  or 
extinguished  by  the  death  of  an  intestate,  seized  or  possessed 
thereof,  or  in  any  manner  entitled  thereto;  leases  for  years, 
estates  for  the  life  of  another  person;  and  real  property  held  in 
trust,  not  devised  by  the  beneficiary.  "  Inheritance  "  means  real 


WHEN   FATHER   INHERITS  549 

property  as  herein  defined,  descended  according  to  the  provisions 
of  this  article. 

2.  The  expressions  "Where  the  inheritance  shall  have  come 
to  the  intestate  on  the  part  of  the  father"  or  "mother,"  as  the 
case  may  be,  include  every  case  where  the  inheritance  shall  have 
come  to  the  intestate  by  devise,  gift  or  descent  from  the  parent 
referred  to,  or  from  any  relative  of  the  blood  of  such  parent. 

3.  When  in  this  article  a  person  is  described  as  "living,"  it 
means  living  at  the  time  of  the  death  of  the  intestate  from  whom 
the  descent  came;  when  he  is  described  as  having  "died,"  it 
means  that  he  died  before  such  intestate. 

4.  This  article  does  not  affect  a  limitation  of  an  estate  by  deed 
or  will,  or  tenancy  by  the  courtesy  or  dower. 

§  81.  General  rule  of  descent.  The  real  property  of  a  per- 
son who  dies  without  devising  the  same  shall  descend: 

1.  To  his  lineal  descendants. 

2.  To  his  father. 

3.  To  his  mother;  and 

4.  To  his  collateral  relatives,  as  prescribed  in  the  following 
sections  of  this  article. 

§  82.  Lineal  descendants  of  equal  degree.  If  the  intestate 
leave  descendants  in  the  direct  line  of  lineal  descent,  all  of 
equal  degree  of  consanguinity  to  him,  the  inheritance  shall 
descend  to  them  in  equal  parts  however  remote  from  him  the 
common  degree  of  consanguinity  may  be. 

§  83.  Lineal  descendants  of  unequal  degree.  If  any  of  the 
descendants  of  such  intestate  be  living,  and  any  be  dead,  the 
inheritance  shall  descend  to  the  living,  and  the  descendants 
of  the  dead,  so  that  each  living  descendant  shall  inherit  such 
share  as  would  have  descended  to  him  had  all  the  descendants  in 
the  same  degree  of  consanguinity  who  shall  have  died  leaving 
issue  been  living;  and  so  that  issue  of  the  descendants  who  shall 
have  died  shall  respectively  take  the  shares  which  their  ancestors 
would  have  received. 

§  84.  When  father  inherits.  If  the  intestate  die  without 
lawful  descendants,  and  leave  a  father,  the  inheritance  shall 
go  to  such  father,  unless  the  inheritance  came  to  the  intestate  on 
the  part  of  his  mother,  and  she  be  living;  if  she  be  dead,  the  in- 


550  DECEDENT  ESTATE    LAW 

heritance  descending  on  her  part  shall  go  to  the  father  for  life, 
and  the  reversion  to  the  brothers  and  sisters  of  the  intestate  and 
their  descendants,  according  to  the  law  of  inheritance  by  col- 
lateral relatives  hereinafter  provided;  if  there  be  no  such  brothers 
or  sisters  or  their  descendants  living,  such  inheritance  shall 
descend  to  the  father  in  fee. 

§  85.  When  mother  inherits.  If  the  intestate  die  without 
descendants  and  leave  no  father,  or  leave  a  father  not  entitled  to 
take  the  inheritance  under  the  last  section,  and  leave  a  mother, 
and  a  brother  or  sister,  or  the  descendant  of  a  brother  or  sister, 
the  inheritance  shall  descend  to  the  mother  for  life,  and  the  re- 
version to  such  brothers  and  sisters  of  the  intestate  as  may  be 
living,  and  the  descendants  of  such  as  may  be  dead,  according  to 
the  same  law  of  inheritance  hereinafter  provided.  If  the  intes- 
tate in  such  case  leave  no  brother  or  sister  or  descendant  thereof, 
the  inheritance  shall  descend  to  the  mother  in  fee. 

§  86.  When  collateral  relatives  inherit;  collateral  relatives 
of  equal  degree.  If  there  be  no  father  or  mother  capable  of 
inheriting  the  estate,  it  shall  descend  in  the  cases  hereinafter 
specified  to  the  collateral  relatives  of  the  intestate;  and  if 
there  be  several  such  relatives,  all  of  equal  degree  of  con- 
sanguinity to  the  intestate,  the  inheritance  shall  descend  to  them 
in  equal  parts,  however  remote  from  him  the  cbmmon  degree  of 
consanguinity  may  be. 

§  87.  Brothers  and  sisters  and  their  descendants.  If  all 
the  brothers  and  sisters  of  the  intestate  be  living,  the  inherit- 
ance shall  descend  to  them ;  if  any  of  them  be  living  and  any  be 
dead,  to  the  brothers  and  sisters  living,  and  the  descendants,  in 
whatever  degree,  of  those  dead;  so  that  each  living  brother  or 
sister  shall  inherit  such  share  as  would  have  descended  to  him 
or  her  if  all  the  brothers  and  sisters  of  the  intestate  who  shall 
have  died,  leaving  issue,  had  been  living,  and  so  that  such  de- 
scendants in  whatever  degree  shall  collectively  inherit  the  share 
which  their  parent  would  have  received  if  living;  and  the  same 
rule  shall  prevail  as  to  all  direct  lineal  descendants  of  every 
brother  and  sister  of  the  intestate  whenever  such  descendants 
are  of  unequal  degrees. 

§  88.  Brothers  and  sisters  of  father  and  mother  and  their 
descendants  and  grandparents.  If  there  be  no  heir  entitled 


ILLEGITIMATE    CHILDREN  551 

to  take,  under  either  of  the  preceding  sections,  the  inheritance, 
if  it  shall  have  come  to  the  intestate  on  the  part  of  the  father, 
shall  descend: 

1.  To  the  brothers  and  sisters  of  the  father  of  the  intestate  hi 
equal  shares,  if  all  be  living. 

2.  If  any  be  living,  and  any  shall  have  died,  leaving  issue,  to 
such  brothers  and  sisters  as  shall  be  living  and  to  the  descendants 
of  such  as  shall  have  died. 

3.  If  all  such  brothers  and  sisters  shall  have  died,  to  their  de- 
scendants. 

4.  If  there  be  no  such  brothers  or  sisters  of  such  father,  nor 
any  descendants  of  such  brothers  or  sisters,  to  the  brothers  and 
sisters  of  the  mother  of  the  intestate,  and  to  the  descendants  of 
such  as  shall  have  died,  or  if  all  have  died,  to  their  descendants. 
But,  if  the  inheritance  shall  have  come  to  the  intestate  on  the 
part  of  his  mother,  it  shall  descend  to  her  brothers  and  sisters 
and  their  descendants;  and  if  there  be  none,  to  the  brothers  and 
sisters  of  the  father  and  their  descendants,  in  the  manner  afore- 
said.   If  the  inheritance  has  not  come  to  the  intestate  on  the 
part  of  either  father  or  mother,  it  shall  descend  to  the  brothers 
and  sisters  both  of  the  father  and  mother  of  the  intestate,  and 
their  descendants  in  the  same  manner.    In  all  cases  mentioned 
in  this  section  the  inheritance  shall  descend  to  the  brothers  and 
sisters  of  the  intestate's  father  or  mother,  as  the  case  may  be,  or 
to  their  descendants  in  like  manner  as  if  they  had  been  the 
brothers  and  sisters  of  the  intestate. 

5.  If  there  be  no  such  brothers  or  sisters  of  such  father  or 
mother,  nor  any  descendants  of  such  brothers  or  sisters,  the  in- 
heritance, if  it  shall  have  come  to  the  intestate  on  the  part  of  his 
father,  shall  descend  to  his  father's  parents,  then  living,  in  equal 
parts,  and  if  they  be  dead,  then  to  his  mother's  parents,  then 
living,  in  equal  parts;  but  if  the  inheritance  shall  have  come  to 
the  intestate  on  the  part  of  his  mother,  it  shall  descend  to  his 
mother's  parents,  then  living,  in  equal  parts,  and  if  they  be  dead, 
to  his  father's  parents,  then  living,  in  equal  parts.     If  the  in- 
heritance has  not  come  to  the  intestate  on  the  part  of  either 
father  or  mother,  it  shall  descend  to  his  living  grandparents  hi 
equal  parts. 

§  89.  Illegitimate  children.  If  an  intestate  who  shall  have 
been  illegitimate  die  without  lawful  issue,  or  illegitimate  issue 
entitled  to  take,  under  this  section,  the  inheritance  shall  descend 


552  DECEDENT   ESTATE    LAW 

to  his  mother;  if  she  be  dead,  to  his  relatives  on  her  part,  as 
if  he  had  been  legitimate.  If  a  woman  die  without  lawful 
issue,  leaving  an  illegitimate  child,  the  inheritance  shall  descend 
to  him  as  if  he  were  legitimate.  In  any  other  case  illegitimate 
children  or  relatives  shall  not  inherit. 

§  90.  Relatives  of  the  half-blood.  Relatives  of  the  half- 
blood  and  their  descendants,  shall  inherit  equally  with  those 
of  the  whole  blood  and  their  descendants,  in  the  same  degree, 
unless  the  inheritance  came  to  the  intestate  by  descent,  devise  or 
gift  from  an  ancestor;  in  which  case  all  those  who  are  not  of  the 
blood  of  such  ancestor  shall  be  excluded  from  such  inheritance. 

§  91.  Relatives  of  husband  or  wife.  When  the  inheritance 
shall  have  come  to  the  intestate  from  a  deceased  husband 
or  wife,  as  the  case  may  be,  and  there  be  no  person  entitled  to 
inherit  under  any  of  the  preceding  sections,  then  such  real  prop- 
erty of  such  intestate  shall  descend  to  the  heirs  of  such  deceased 
husband  or  wife,  as  the  case  may  be,  and  the  persons  entitled, 
under  the  provisions  of  this  section,  to  inherit  such  real  property, 
shall  be  deemjed  to  be  the  heirs  of  such  intestate. 

§  92.  Cases  not  hereinbefore  provided  for.  In  all  cases 
not  provided  for  by  the  preceding  sections  of  this  article,  the 
inheritance  shall  descend  according  to  the  course  of  the  common 
law. 

§  93.  Posthumous  children  and  relatives.  A  descendant 
or  a  relative  of  the  intestate  begotten  before  his  death,  but 
born  thereafter,  shall  inherit  in  the  same  manner  as  if  he  had 
been  born  in  the  lifetime  of  the  intestate  and  had  survived  him. 

§  94.  Inheritance,  sole  or  in  common.  When  there  is  but 
one  person  entitled  to  inherit,  he  shall  take  and  hold  the  in- 
heritance solely ;  when  an  inheritance  or  a  share  of  an  inheritance 
descends  to  several  persons  they  shall  take  as  tenants  in  com- 
mon, in  proportion  to  their  respective  rights. 

§  95.  Alienism  of  ancestor.  A  person  capable  of  inheriting 
under  the  provisions  of  this  article,  shall  not  be  precluded  from 
such  inheritance  by  reason  of  the  alienism  of  an  ancestor. 


DISTRIBUTION   OF   PERSONAL   PROPERTY  553 

§  96.  Advancements  of  real  and  personal  estates.       If  a 

child  of  an  intestate  shall  have  been  advanced  by  him,  by 
settlement  or  portion,  real  or  personal  property,  the  value 
thereof  must  be  reckoned  for  the  purposes  of  descent  and  dis- 
tribution as  part  of  the  real  and  personal  property  of  the  intes- 
tate descendible  to  his  heirs  and  to  be  distributed  to  his  next  of 
kin;  and  if  such  advancement  be  equal  to  or  greater  than  the 
amount  of  the  share  which  such  child  would  be  entitled  to  receive 
of  the  estate  of  the  deceased,  such  child  and  his  descendants 
shall  not  share  in  the  estate  of  the  intestate;  but  if  it  be  less, than 
such  share,  such  child  and  his  descendants  shall  receive  so  much, 
only,  of  the  personal  property,  and  inherit  so  much  only,  of  the 
real  property,  of  the  intestate,  as  shall  be  sufficient  to  make  all 
the  shares  of  all  the  children  in  the  whole  property,  including  the 
advancement,  equal.  The  value  of  any  real  or  personal  prop- 
erty so  advanced,  shall  be  deemed  to  be  that,  if  any,  which  was 
acknowledged  by  the  child  by  an  instrument  in  writing;  other- 
wise it  must  be  estimated  according  to  the  worth  of  the  property 
when  given.  Maintaining  or  educating  a  child,  or  giving  him 
money  without  a  view  to  a  portion  or  settlement  in  life  is  not  an 
advancement.  An  estate  or  interest  given  by  a  parent  to  a 
descendant  by  virtue  of  a  beneficial  power,  or  of  a  power  in  trust 
with  a  right  of  selection,  is  an  advancement. 

§  97.  How  advancement  adjusted.  When  an  advancement 
to  be  adjusted  consisted  of  real  property,  the  adjustment 
must  be  made  out  of  the  real  property  descendible  to  the  heirs. 
When  it  consisted  of  personal  property,  the  adjustment  must 
be  made  out  of  the  surplus  of  the  personal  property  to  be 
distributed  to  the  next  of  kin.  If  either  species  of  property  is 
insufficient  to  enable  the  adjustment  to  be  fully  made,  the  de- 
ficiency must  be  adjusted  out  of  the  other. 

§  98.  Distribution  of  personal  property  of  decedent.  If 
the  deceased  died  intestate,  the  surplus  of  his  personal  property 
after  payment  of  debts;  and  if  he  left  a  will,  such  surplus,  after 
the  payment  of  debts  and  legacies,  if  not  bequeathed,  must  be 
distributed  to  his  widow,  children,  or  next  of  kin,  in  manner 
following : 

1.  One-third  part  to  the  widow,  and  the  residue  in  equal  por- 
tions among  the  children,  and  such  persons  as  legally  represent 
the  children  if  any  of  them  have  died  before  the  deceased. 


554  DECEDENT   ESTATE   LAW 

2.  If  there  be  no  children,  nor  any  legal  representatives  of 
them,  then  one-half  of  the  whole  surplus  shall  be  allotted  to  the 
widow,  and  the  other  half  distributed  to  the  next  of  kin  of  the 
deceased,  entitled  under  the  provisions  of  this  section. 

3.  If  the  deceased  leaves  a  widow,  and  no  descendant,  parent, 
brother  or  sister,  nephew  or  niece,  the  widow  shall  be  entitled 
to  the  whole  surplus;  but  if  there  be  a  brother  or  sister,  nephew  or 
niece,  and  no  descendant  or  parent,  the  widow  shall  be  entitled 
to  one-half  of  the  surplus  as  above  provided,  and  to  the  whole  of 
the  residue  if  it  does  not  exceed  two  thousand  dollars;  if  the 
residue  exceeds  that  sum,  she  shall  receive  in  addition  to  the  one- 
half,  two  thousand  dollars;  and  the  remainder  shall  be  dis- 
tributed to  the  brothers  and  sisters  and  their  representatives. 

4.  If  there  be  no  widow,  the  whole  surplus  shall  be  distributed 
equally  to  and  among  the  children,  and  such  as  legally  represent 
them. 

5.  If  there  be  no  widow,  and  no  children,  and  no  representa- 
tives of  a  child,  the  whole  surplus  shall  be  distributed  to  the  next 
of  kin,  in  equal  degree  to  the  deceased,  and  their  legal  representa- 
tives; and  if  all  the  brothers  and  sisters  of  the  intestate  be  living, 
the  whole  surplus  shall  be  distributed  to  them;  if  any  of  them  be 
living  and  any  be  dead,  to  the  brothers  and  sisters  living,  and  the 
descendants  in  whatever  degree  of  those  dead;  so  that  to  each 
living  brother  or  sister  shall  be  distributed  such  share  as  would 
have  been  distributed  to  him  or  her  if  all  the  brothers  and  sisters 
of  the  intestate  who  shall  have  died  leaving  issue  had  been  living, 
and  so  that  there  shall  be  distributed  to  such  descendants  in 
whatever  degree,  collectively,  the  share  which  their  parent  would 
have  received  if  living;  and  the  same  rule  shall  prevail  as  to  all 
direct  lineal  descendants  of  every  brother  and  sister  of  the  intes- 
tate whenever  such  descendants  are  of  unequal  degrees. 

6.  If  the  deceased  leave  no  children  and  no  representatives  of 
them,  and  no  father,  and  leave  a  widow  and  a  mother,  the  half 
not  distributed  to  the  widow  shall  be  distributed  in  equal  shares 
to  his  mother  and  brothers  and  sisters,  or  the  representatives  of 
such  brothers  and  sisters;  and  if  there  be  no  widow,  the  whole 
surplus  shall  be  distributed  in  like  manner  to  the  mother,  and  to 
the  brothers  and  sisters,  or  the  representatives  of  such  brothers 
and  sisters. 

7.  If  the  deceased  leave  a  father  and  no  child  or  descendant, 
the  father  shall  take  one-half  if  there  be  a  widow,  and  the  whole, 
if  there  be  no  widow. 


DISTRIBUTION   OF   PERSONAL   PROPERTY  555 

8.  If  the  deceased  leave  a  mother,  and  no  child,  descendant, 
father,  brother,  sister,  or  representative  of  a  brother  or  sister,  the 
mother,  if  there  be  a  widow,  shall  take  one-half;  and  the  whole, 
if  there  be  no  widow. 

9.  If  the  deceased  was  illegitimate  and  leave  a  mother,  and  no 
child,  or  descendant,  or  widow,  such  mother  shall  take  the  whole 
and  shall  be  entitled  to  letters  of  administration  in  exclusion  of 
all  other  persons.    If  the  mother  of  such  deceased  be  dead,  the 
relatives  of  the  deceased  on  the  part  of  the  mother  shall  take  in 
the  same  manner  as  if  the  deceased  had  been  legitimate,  and  be 
entitled  to  letters  of  administration  in  the  same  order. 

10.  Where  the  descendants,  or  next  of  kin  of -the  deceased, 
entitled  to  share  in  his  estate,  are  all  in  equal  degree  to  the  de- 
ceased, their  shares  shall  be  equal. 

11.  When  such  descendants  or  next  of  kin  are  of  unequal  de- 
grees of  kindred,  the  surplus  shall  be  apportioned  among  those 
entitled  thereto,  according  to  their  respective  stocks;  so  that 
those  who  take  in  their  own  right  shall  receive  equal  shares,  and 
those  who  take  by  representation  shall  receive  the  share  to  which 
the  parent  whom  they  represent,  if  living,  would  have  been  en- 
titled. 

12.  No  representation  shall  be  admitted  among  collaterals 
after  brothers  and  sisters  descendants.    This  subdivision  shall 
not  apply  to  the  estate  of  a  decedent  who  shall  have  died  prior  to 
May  eighteenth,  nineteen  hundred  and  five.     (Sub.  12  thus 
amended  by  L.  1909,  ch.  240,  §  14,  in  effect  April  22,  1909.) 

Amendment  of  1909  struck  out  the  words  "the  time  this  act  shall  take 
effect"  which  preceded  "May." 

13.  Relatives  of  the  half-blood  shall  take  equally  with  those  of 
the  whole  blood  in  the  same  degree;  and  the  representatives  of 
such  relatives  shall  take  in  the  same  manner  as  the  representa- 
tives of  the  whole  blood. 

14.  Descendants  and  next  of  kin  of  the  deceased,  begotten 
before  his  death,  but  born  thereafter,  shall  take  in  the  same 
manner  as  if  they  had  been  born  in  the  lifetime  of  the  deceased, 
and  had  survived  him. 

15.  If  a  woman  die,  leaving  illegitimate  children,  and  no  law- 
ful issue,  such  children  inherit  her  personal  property  as  if  legiti- 
mate. 

15a.  If  there  be  no  husband  or  wife  surviving  and  no  children, 
and  no  representatives  of  a  child,  and  no  next  of  kin,  then  the 


556  DECEDENT   ESTATE    LAW 

whole  surplus  shall  be  allotted  to  a  surviving  child  of  the  hus- 
band or  wife  of  the  deceased,  or  if  there  be  more  than  one,  it 
shall  be  distributed  equally  among  them.  (Added  by  L.  1913, 
ch.  489,  in  effect  May  14, 1913.) 

16.  If  there  be  no  husband  or  wife  surviving  and  no  children, 
and  no  representatives  of  a  child,  and  no  next  of  kin,  and  no 
child  or  children  of  the  husband  or  wife  of  the  deceased,  then  the 
whole  surplus  shall  be  distributed  equally  to  and  among  the  next 
of  kin  of  the  husband  or  wife  of  the  deceased,  as  the  case  may 
be,  and  such  next  of  kin  shall  be  deemed  next  of  kin  of  the  de- 
ceased for  all  the  purposes  specified  in  this  article  or  in  chapter 
eighteen  of  the  code  of  civil  procedure;  but  such  surplus  shall 
not,  and  shall  not  be  construed  to,  embrace  any  personal  prop- 
erty except  such  as  was  received  by  the  deceased  from  such 
husband  or  wife,  as  the  case  may  be,  by  will  or  by  virtue  of  the 
laws  relating  to  the  distribution  of  the  personal  property  of  the 
deceased  person.  (4s  amended  by  L.  1913,  ch.  4^9,  in  effect 
May  14,  1913.) 

§  99.  Advancements  of  personal  estates.  If  any  child  of 
such  deceased  person  have  been  advanced  by  the  deceased, 
by  settlement  or  portion  of  real  or  personal  property,  the  value 
thereof  shall  be  reckoned  with  that  part  of  the  surplus  of  the 
personal  property,  which  remains  to  be  distributed  among  the 
children;  and  if  such  advancement  be  equal  or  superior  to  the 
amount,  which,  according  to  the  preceding  section,  would  be  dis- 
tributed to  such  child,  as  his  share  of  such  surplus  and  advance- 
ment, such  child  and  his  descendants  shall  be  excluded  from  any 
share  in  the  distribution  of  the  surplus.  If  such  advancement  be 
not  equal  to  such  amount,  such  child,  or  his  descendants,  shall  be 
entitled  to  receive  so  much  only,  as  is  sufficient  to  make  all  the 
shares  of  all  the  children,  in  such  surplus  and  advancement,  to  be 
equal,  as  near  as  can  be  estimated.  The  maintaining  or  educat- 
ing, or  the  giving  of  money  to  a  child,  without  a  view  to  a  portion 
or  settlement  in  life,  shall  not  be  deemed  an  advancement,  within 
the  meaning  of  this  section,  nor  shall  the  foregoing  provisions  of 
this  section  apply  in  any  case  where  there  is  any  real  property  of 
the  intestate  to  descend  to  his  heirs. 

§  100.  Estates  of  married  women.  The  provisions  of  this 
article  respecting  the  distribution  of  property  of  deceased 
persons  apply  to  the  personal  property  of  married  women  dying, 
leaving  descendants  them  surviving.  The  husband  of  any  such 


APPLICATION  OF  CERTAIN  SECTIONS  IN  THIS  ARTICLE      557 

deceased  married  woman  shall  be  entitled  to  the  same  distribu- 
tive share  in  the  personal  property  of  his  wife  to  which  a  widow  is 
entitled  in  the  personal  property  of  her  husband  by  the  provi- 
sions of  this  article  and  no  more. 

§  101.  Liability  of  heirs  and  devisees  for  debt  of  decedent. 

The  heirs  of  an  intestate,  and  the  heirs  and  devisees  of  a  testator, 
are  respectively  liable  for  the  debts  of  the  decedent,  arising  by 
simple  contract,  or  by  specialty,  to  the  extent  of  the  estate, 
interest,  and  right  in  the  real  property,  which  descended  to 
them  from,  or  was  effectually  devised  to  them  by,  the  decedent. 

§  102.  Liability  of  heir  or  devisee  not  affected  where  will 
makes  specific  provision  for  payment  of  debt.  The  preceding 
section  and  article  two  of  title  three  of  chapter  fifteen  of  the 
code  of  civil  procedure  do  not  affect  the  liability  of  an  heir  or 
devisee,  for  a  debt  of  a  testator,  where  the  will  expressly  charges 
the  debt  exclusively  upon  the  real  property  descended  or 
devised,  or  makes  it  payable  exclusively  by  the  heir  or  devisee, 
or  out  of  the  real  property  descended  or  devised,  before  resorting 
to  the  personal  property,  or  to  any  other  real  property  descended 
or  devised. 

§  103.  Action  against  husband  for  debts  of  deceased  wife. 

If  a  surviving  husband  does  not  take  out  letters  of  administra- 
tion on  the  estate  of  his  deceased  wife,  he  is  presumed  to  have 
assets  in  his  hands  sufficient  to  satisfy  her  debts,  and  is  liable 
therefor.  A  husband  is  liable  as  administrator  for  the  debts 
of  his  wife  only  to  the  extent  of  the  assets  received  by  him. 
If  he  dies  leaving  any  assets  of  his  wife  unadministered,  except 
as  otherwise  provided  by  law,  they  pass  to  his  executors  or 
administrators  as  part  of  his  personal  property,  but  are  liable  for 
her  debts  in  preference  to  the  creditors  of  the  husband.  (Thus 
amended  by  L.  1909,  ch.  240,  §  15,  in  effect  April  22,  1909.) 

Amendment  of  1909  changed  the  first  word  "  the  "  in  the  third  sentence  to 
"his." 

§  104.  Application  of  certain  sections  in  this  article.  Section 
twenty-five  hundred  and  fourteen  of  the  code  of  civil  procedure 
is  applicable  to  the  provisions  of  sections  ninety-eight  to  one 
hundred,  both  inclusive,  and  section  one  hundred  and  three,  of 
this  chapter.  (Added  by  L.  1909,  ch.  240,  §  16,  in  effect.  April  22, 
1909.) 


558  DECEDENT   ESTATE    LAW 

ARTICLE  4 
Executors,  Administrators  and  Testamentary  Trustees 

Section  110.  Sales  of  real  estate  by  executors  under  authority  of 
will. 

111.  *Investment  of  trust  funds  by  executor  or  admin- 

istrator. 

112.  Executors  de  son  tort  abolished. 

113.  Special  promise  to  answer  for  debt  of  testator  or 

intestate. 

114.  Liability  of  executors  and  administrators  of  execu- 

tors and  administrators. 

115.  Rights  of  administrators  de  bonis  non. 

116.  Actions  upon  contract  by  and  against  executors. 

117.  Administrators  to  have  same  rights  and  liabilities 

as  executors. 

118.  Actions  of  trespass  by  executors  and  administra- 

tors. 

119.  Actions  of  trespass  against  executors  and  adminis- 

trators. 

120.  Actions  for  wrongs,  by  or  against  executors  and 

administrators. 

121.  Action  or  proceeding  by  executor  of  executor. 

122.  Appraisal  of  estate  of  deceased  person. 

§  110.  Sales  of  real  estate  by  executors  under  authority  of 
will.  Sales  of  real  estate  situate  within  the  state  of  New  York, 
made  by  executors  in  pursuance  of  an  authority  given  by  any 
last  will,  unless  otherwise  directed  in  such  will,  may  be  public 
or  private  and  on  such  terms  as  in  the  opinion  of  the  executor 
shall  be  most  advantageous  to  those  interested  therein. 

§  111.  Investment  of  trust  funds.  An  executor,  administra- 
tor, trustee  or  other  person  holding  trust  funds  for  investment 
may  invest  the  same  in  the  same  kind  of  securities  as  those  in 
which  savings  banks  of  this  state  are*  by  law  authorized  to  invest 
the  money  deposited  therein,  and  the  income  derived  therefrom, 
and  in  bonds  and  mortgages  on  unincumbered  real  property 
in  this  state  worth  fifty  per  centum  more  than  the  amount 

*So  in  original. 


RIGHTS   OF   ADMINISTRATORS   DE    BONIS   NON         559 

loaned  thereon.  Any  executor,  administrator,  trustee  or  other 
person  holding  trust  funds  may  require  such  personal  bonds  or 
guaranties  of  payment  to  accompany  investments  as  may  seem 
prudent,  and  all  premiums  paid  on  such  guaranties  may  be 
charged  to  or  paid  out  of  income,  providing  that  such  charge  or 
payment  be  not  more  than  at  the  rate  of  one-half  of  one  per 
centum  per  annum  on  the  par  value  of  such  investments.  But 
no  trustee  shall  purchase  securities  hereunder  from  himself. 

§  112.  Executors  de  son  tort  abolished.  No  person  shall 
be  liable  to  an  action  as  executor  of  his  own  wrong,  for  hav- 
ing received,  taken  or  interfered  with,  the  property  or  effects  of 
a  deceased  person;  but  shall  be  responsible  as  a  wrong-doer  in  the 
proper  action  to  the  executors,  or  general  or  special  adminis- 
trators, of  such  deceased  person,  for  the  value  of  any  property  or 
effects  so  taken  or  received,  and  for  all  damages  caused  by  his 
acts,  to  the  estate  of  the  deceased. 

§  113.  Special  promise  to  answer  for  debt  of  testator  or 
intestate.  No  executor  or  administrator  shall  be  chargeable 
upon  any  special  promise  to  answer  damages,  or  to  pay  the 
debts  of  the  testator  or  intestate,  out  of  his  own  estate,  unless 
the  agreement  for  that  purpose,  or  some  memorandum  or 
note  thereof,  be  in  writing,  and  signed  by  such  executor  or  ad- 
ministrator, or  by  some  other  person  by  him  thereunto  specially 
authorized. 

§  114.  Liability  of  executors  and  administrators  of  execu- 
tors and  administrators.  The  executors  and  administrators  of 
every  person,  who,  as  executor,  either  of  right  or  in  his  own 
wrong,  or  as  administrator,  shall  have  wasted  or  converted  to 
his  own  use,  any  goods,  chattels,  or  estate,  of  any  deceased 
person,  shall  be  chargeable  in  the  same  manner  as  their  testator 
or  intestate  would  have  been,  if  living. 

§  115.  Rights  of  administrators  de  bonis  non.  When  ad- 
ministration of  the  effects  of  a  deceased  person,  which  shall 
have  been  left  unadministered  by  any  previous  executor  or  ad- 
ministrator of  the  same  estate,  shall  be  granted  to  any  person, 
such  person  may  appeal  from  any  judgment  obtained  against 
such  previous  executor  or  administrator  of  the  same  estate,  or 
against  the  original  testator  or  intestate;  and  shall  defend  any 


560  DECEDENT   ESTATE    LAW 

appeal  from  any  such  judgment;  and  shall  have  the  same  reme- 
dies, in  the  prosecution  or  defense  of  any  action,  by  or  against 
such  previous  executors  or  administrators,  and  for  the  collection 
and  enforcing  of  any  judgment  obtained  by  them,  as  they  would 
have  by  law. 

§  116.  Actions  upon  contract  by  and  against  executors. 
Actions  of  account,  and  all  other  actions  upon  contract,  may 
be  maintained  by  and  against  executors,  in  all  cases  in  which 
the  same  might  have  been  maintained,  by  or  against  their  re- 
spective testators. 

§  117.  Administrators  to  have  same  rights  and  liabilities 
as  executors.  Administrators  shall  have  actions  to  demand 
and  recover  the  debts  due  to  their  intestate,  and  the  per- 
sonal property  and  effects  of  their  intestate;  and  shall  answer 
and  be  accountable  to  others  to  whom  the  intestate  was  holden 
or  bound,  in  the  same  manner  as  executors. 

§  118.  Actions  of  trespass  by  executors  and  administrators. 
Executors  and  administrators  shall  have  actions  of  trespass 
against  any  person  who  shall  have  wasted,  destroyed,  taken 
or  carried  away,  or  converted  to  his  own  use,  the  goods  of 
their  testator  or  intestate  in  his  lifetime.  They  may  also  main- 
tain actions  for  trespass  committed  on  the  real  estate  of  the  de- 
ceased, in  his  lifetime. 

§  119.  Actions  of  trespass  against  executors  and  adminis- 
trators. Any  person,  or  his  personal  representatives,  shall 
have  actions  of  trespass  against  the  executor  or  administrator 
of  any  testator  or  intestate,  who  in  his  lifetime  shall  have 
wasted,  destroyed,  taken  or  carried  away,  or  converted  to  his 
own  use,  the  goods  or  chattels  of  any  such  person,  or  committed 
any  trespass  on  the  real  estate  of  any  such  person. 

§  120.  Actions  for  wrongs,  by  or  against  executors  and  ad- 
ministrators. For  wrongs  done  to  the  property,  rights  or 
interests  of  another,  for  which  an  action  might  be  maintained 
against  the  wrong-doer,  such  action  may  be  brought  by  the 
person  injured,  or  after  his  death,  by  his  executors  or  adminis- 
trators, against  such  wrong-doer,  and  after  his  death  against 
his  executors  or  administrators,  in  the  same  manner  and  with 


WHEN    TO    TAKE    EFFECT  561 

the  like  effect  in  all  respects,  as  actions  founded  upon  contracts. 
This  section  shall  not  extend  to  an  action  for  personal  injuries, 
as  such  action  is  defined  in  section  thirty-three  hundred  and 
forty-three  of  the  code  of  civil  procedure;  except  that  nothing 
herein  contained  shall  affect  the  right  of  action  now  existing  to 
recover  damages  for  injuries  resulting  in  death.  (Added  by  L. 
1909,  ch.  240,  §  16,  in  effect  April  22, 1909.) 

§  121.  Action  or  proceeding  by  executor  of  executor.      An 

executor  of  an  executor  shall  have  no  authority  to  commence 
or  maintain  any  action  or  proceeding  relating  to  the  estate, 
effects  or  rights  of  the  testator  of  the  first  executor,  or  to  take 
any  charge  or  control  thereof,  as  such  executor.  (Added  by 
L.  1909,  ch.  240,  §  16,  in  effect  April  22, 1909.) 

§  122.  Appraisal  of  estate  of  deceased  person.  Whenever 
by  reason  of  the  provisions  of  any  law  of  this  state  it  shall 
become  necessary  to  appraise  in  whole  or  in  part  the  estate 
of  any  deceased  person,  the  persons  whose  duty  it  shall  be  to 
make  such  appraisal  shall  value  the  real  estate  at  its  full  and  true 
value,  taking  into  consideration  actual  sales  of  neighboring  real 
estate  similarly  situated  during  the  year  immediately  preceding 
the  date  of  such  appraisal,  if  any;  and  they  shall  value  all  such 
property,  stocks,  bonds,  or  securities  as  are  customarily  bought 
or  sold  in  open  markets  in  the  city  of  New  York  or  elsewhere,  for 
the  day  on  which  such  appraisal  or  report  may  be  required,  by 
ascertaining  the  range  of  the  market  and  the  average  of  prices  as 
thus  found,  running  through  a  reasonable  period  of  time.  (Re- 
numbered by  L.  1909,  ch.  240,  §17.  Formerly  §  120.) 

ARTICLE  5 
Laws  Repealed;  When  to  Take  Effect 

Section  130.  Laws  repealed. 

131.  When  to  take  effect. 

§  130.  Laws  repealed.  Of  the  laws  enumerated  in  the 
schedule  hereto  annexed,  that  portion  specified  in  the  last 
column  is  hereby  repealed. 

§  131.  When  to  take  effect.     This  chapter  shall  take  effect 
immediately. 
36 


562  DECEDENT   ESTATE    LAW 

SCHEDULE  OF  LAWS  REPEALED 

Revised  Statutes Part  2,  chapter  6,  title  1,  §§  1-5,  21,  22, 

40-53,  69-71. 

Revised  Statutes Part  2,  chapter  6,  title  4,  §§  55,  58. 

Revised  Statutes Part  2,  chapter  6,  title  5,  §§  1-6,  23. 

Revised  Statutes Part  3,  chapter  7,  title  3,  §§  67-70. 

Revised  Statutes ....  Part  3,  chapter  8,  title  3,  §§  17,  18. 
*Revised  Statutes. . .   Part  3,  chapter  8,  title  3,  §§  1,  2,  11. 


Laws  of 

Chapter 

Section. 

1787  

47  

All. 

1799  

75  

All. 

1801  

9  

All. 

R.  L.  1813... 

23  

All. 

R.  L.  1813... 

75  

All. 

1815  

157  

All. 

1821  

207  

All. 

1828  

21  

1,  ff  83,  95,  196,  336,  544  (2d 

meet.) 

1828  

313  

All. 

1829  

148  

All. 

1835  

264  

All. 

1837.*.  

234  

All. 

1840  

348  

1. 

1848  

319  

Proviso  in  §  6. 

1860  

360  

All. 

1865  

368  

Proviso  in  §  6. 

1867..  

782  

3,4. 

1869  

22  

All. 

1873  

397  

Proviso  in  §  5. 

1875  

267  

Proviso  in  §  7. 

1875  

343  

Proviso  in  §  5. 

1876  

118  

All. 

1883  

65  

All. 

1886  

236  

Proviso  in  §  7. 

1887  

315  

Proviso  in  §  5. 

1887  

317  

Proviso  in  §  7. 

1890  

286  

Proviso  in  §  6. 

1891  

34  

1,  pt.  relating  to  estates  of  de- 

ceased persons. 

*  Inserted  and 

expressly  repealed 

by  L.  1909,  ch.  240,  §  93.    In  effect 

April  22,  1909. 

LAWS   REPEALED  563 

Laws  of  Chapter  Section. 

1893 100 All. 

1896 547 280-296. 

1897 417 9,  pt.  relating  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 

1902 295 1,  pt.  amending  L.  1897,  Ch. 

417,  §  9,  as  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 

1903 623 Pt.  amending  the  proviso  in  L. 

1848,  Ch.  319,  §  6. 

*1904 106 All. 

1904 146 All. 

1907 669 1,  pt.  amending  L.  1897,  Ch. 

417,  §  9,  as  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 
Code  Civil  Procedure  §§  1843,  1859,  1868,  2611,  2628,  2633; 

§  2634,  to  and  including  words  "in  his  office";  §  2660,  words 

"If  a  surviving  husband"   to   "creditors  of  the  husband"; 

§§  2694,  2703,  2704,  2732;  §  2733,  except  last  two  sentences; 

§  2734. 

*  Inserted  and  expressly  repealed  by  L.  1909,  ch.  240,  §  106.    In  effect 
April  22,  1909. 


STOCK  TRANSFER  STATUTE 


The  statute  relating  to  tax  on  transfers  of  stock  is 
Article  12  of  The  Tax  Law,  and  as  amended  reads  as  fol- 
lows: 

ARTICLE  12 


Tax  on  Transfers  of  Stock 


Section  270. 
271. 


Amount  of  tax. 

Stamps,     how     pre- 
pared and  sold. 
271a.  Sale  of  stamps. 
272.     Penalty  for  failure  to 
pay  tax. 

Canceling        stamp; 
penalty  for  failure. 

Contracts  for  dies;  ex- 
penses how  paid. 

Illegal         use         of 
stamps;  penalty. 


273. 


274. 


275. 


Section  275a.  Registration;  penalty 
for  failure. 

276.  Power  of  state  comp- 

troller. 

277.  Civil  penalties;  how 

recovered. 

278.  Effect   of   failure   to 

pay  tax. 

279.  Application  of  taxes. 

280.  Refund  of  tax  erro- 

neously paid. 


§  270.  Amount  of  tax.  There  is  hereby  imposed  and  shall  im- 
mediately accrue  and  be  collected  a  tax,  as  herein  provided,  on  all 
sales,  or  agreements  to  sell,  or  memoranda  of  sales  of  stock,  and  upon 
any  and  all  deliveries  or  transfers  of  shares  or  certificates  of  stock,  in 
any  domestic  or  foreign  association,  company  or  corporation,  made 
after  the  first  day  of  June,  nineteen  hundred  and  five,  whether  made 
upon  or  shown  by  the  books  of  the  association,  company  or  corporation, 
or  by  any  assignment  in  blank,  or  by  any  delivery,  or  by  any  paper  or 
agreement  or  memorandum  or  other  evidence  of  sale  or  transfer, 
whether  intermediate  or  final,  and  whether  investing  the  holder  with  the 
beneficial  interest  in  or  legal  title  to  said  stock,  or  merely  with  the 
possession  or  use  thereof  for  any  purpose,  or  to  secure  the  future  pay- 
ment of  money,  or  the  future  transfer  of  any  stock,  on  each  hundred 
dollars  of  face  value  or  fraction  thereof,  two  cents,  except  in  cases  where 
the  shares  or  certificates  of  stock  are  issued  without  designated  mone- 
tary value,  in  which  cases  the  tax  shall  be  at  the  rate  of  two  cents  for 
each  and  every  share  of  such  stock.  It  shall  be  the  duty  of  the  person 
or  persons  making  or  effectuating  the  sale  or  transfer  to  procure,  affix 
and  cancel  the  stamps  and  pay  the  tax  provided  by  this  article.  It  is 
not  intended  by  this  act  to  impose  a  tax  upon  an  agreement  evidencing 
the  deposit  of  stock  certificates  as  collateral  security  for  money  loaned 
564 


STAMPS,    HOW   PREPARED   AND    SOLD  565 

thereon,  which  stock  certificates  are  not  actually  sold,  nor  upon  such 
stock  certificates  so  deposited,  nor  upon  mere  loans  of  stock  or  the  re- 
turn thereof.  The  payment  of  such  tax  shall  be  denoted  by  an  adhesive 
stamp  or  stamps  affixed  as  follows:  In  the  case  of  a  sale  or  transfer, 
where  the  evidence  of  the  transaction  is  shown  only  by  the  books  of  the 
association,  company  or  corporation,  the  stamp  shall  be  placed  upon 
such  books,  and  it  shall  be  the  duty  of  the  person  making  or  effectuating 
such  sale  or  transfer  to  procure  and  furnish  to  the  association,  com- 
pany or  corporation  the  requisite  stamps,  and  of  such  association, 
company  or  corporation  to  affix  and  cancel  the  same.  Where  the 
transaction  is  effected  by  the  delivery  or  transfer  of  a  certificate,  the 
stamp  shall  be  placed  upon  the  surrendered  certificate  and  canceled, 
and  in  cases  of  an  agreement  to  sell,  or  where  the  sale  is  effected  by 
delivery  of  the  certificate  assigned  in  blank,  there  shall  be  made  and 
delivered  by  the  seller  to  the  buyer,  a  bill  or  memorandum  of  such 
sale  to  which  the  stamp  provided  for  by  this  article  shall  be  affixed  and 
canceled.  Every  such  bill  or  memorandum  of  sale  or  agreement  to  sell 
shall  show  the  date  of  the  transaction  which  it  evidences,  the  name  of 
the  seller,  the  stock  to  which  it  relates,  and  the  number  of  shares 
thereof.  All  such  bills  or  memoranda  of  sale  shall  bear  a  number  upon 
the  face  thereof  and  no  more  than  one  such  bill  or  memorandum  of 
sale  made  by  the  seller  on  any  given  day  shall  bear  the  same  number. 
The  aforesaid  identification  number  of  the  bill  or  memorandum  of 
sale  shall  in  all  cases  be  entered  and  recorded  in  the  book  of  account 
required  to  be  kept  by  section  two  hundred  and  seventy-six  of  this 
chapter;  and  no  further  tax  is  hereby  imposed  upon  the  delivery  of  the 
certificate  of  stock,  or  upon  the  actual  issue  of  a  new  certificate  when 
the  original  certificate  of  stock  is  accompanied  by  the  duly  stamped 
memorandum  of  sale  as  herein  provided.  (Thus  am'd  by  L.  1910, 
chap.  88;  L.  1911,  chap.  352;  L.  1912,  ch.  292;  L.  1913,  chap.  779,  in 
effect  July  1,1913.) 

§  271.  Stamps,  how  prepared  and  sold.  Adhesive  stamps  for  the 
purpose  of  paying  the  state  tax  provided  for  by  this  article  shall  be 
prepared  by  the  state  comptroller,  in  such  form,  and  of  such  denomina- 
tions and  in  such  quantities  as  he  may  from  time  to  time  prescribe,  and 
shall  be  sold  by  him  to  the  person  or  persons  desiring  to  purchase  the 
same;  he  shall  make  provision  for  the  sale  of  such  stamps  by  such  per- 
sons, in  such  place  and  at  such  times  as  in  his  judgment  he  may  deem 
necessary. 

He  may  from  time  to  time  and  as  often  as  he  deems  advisable  provide 
for  the  issuance  and  exclusive  use  of  stamps  of  a  new  design  and  forbid 
the  use  of  stamps  of  any  other  design.  In  order  to  effect  such  a  change 
and  to  discontinue  the  use  of  stamps  of  a  former  design  he  shall  publish 
or  cause  to  be  published  once  in  each  week  for  each  of  three  months  im- 
mediately preceding  the  time  for  taking  effect  of  such  change,  in  one  or 


566  STOCK  TRANSFER  STATUTE 

more  daily  newspapers  published  in  each  of  the  first  and  second  class 
cities  of  the  state,  a  notice  to  the  effect  that  after  a  certain  day,  which 
shall  be  at  least  three  months  after  the  first  publication  of  said  notice, 
none  other  than  the  new  issue  or  design  of  stamps  shall  be  accepted  or 
made  use  of  in  payment  of  the  tax  provided  for  by  this  article.  After 
such  date  it  shall  be  unlawful  for  any  person  to  make  use  of  any  other 
than  the  new  issue  or  design  of  stamps  in  payment  of  such  tax.  Any 
person  violating  any  of  the  provisions  of  this  section  shall  be  guilty  of 
a  misdemeanor. 

Any  person  lawfully  in  possession  of  unused  stamps  of  an  old  or 
superseded  issue  or  design  may,  within  ninety  days_from  the  time 
when  such  change  becomes  effective  as  aforesaid,  surrender  the  same 
to  the  comptroller  together  with  a  sworn  statement  setting  forth  the 
name  and  address  of  the  owner  and  party  surrendering  said  stamps, 
how,  when  and  from  whom  the  same  were  acquired  and  such  other  per- 
tinent information  as  the  comptroller  may  require;  whereupon  the 
comptroller  shall  redeem  such  unused  and  surrendered  stamps  by  ex- 
changing therefor  stamps  of  a  like  denomination  of  the  new  issue  or 
design.  Failure  or  refusal  of  the  comptroller  to  redeem  the  same  by 
such  an  exchange  may  be  enforced  by  mandamus.  (Thus  am'd  by 
L.  1913,  chap.  811,  in  effect  Nov.  14,  1913.) 

§  271a.  Sale  of  stamps.  No  person,  firm,  company,  association 
or  corporation  other  than  a  corporation  organized  under  the  banking 
law  of  this  state  or  under  the  national  bank  act  of  the  United  States,  or 
a  duly  authorized  agent  of  the  comptroller,  shall  sell  or  expose  for  sale 
any  stamp  issued  pursuant  to  this  article,  and  purchased  or  acquired 
by  him  after  the  time  when  this  act  shall  take  effect,  without  *  his 
obtaining  from  the  comptroller  his  written  consent  to  sell  such  stamps, 
except  that  in  connection  with  a  sale  of  or  agreement  to  sell  stock  a 
broker  or  agent  of  the  principal  making  such  sale  or  agreement  to  sell 
may  supply  and  affix  the  stamp  or  stamps  required  by  this  article. 
No  person  shall  sell  any  stamp  so  purchased  or  acquired  for  a  sum  less 
than  the  face  value  thereof  without  the  written  consent  of  the  comp- 
troller. Any  person  violating  any  of  the  provisions  of  this  section 
shall  be  guilty  of  a  misdemeanor.  (Thus  am'd  by  L.  1913,  chap.  811, 
in  effect  Nov.  14,  1913.) 

§  272.  Penalty  for  failure  to  pay  tax.  Any  person  or  persons  liable 
to 'pay  the  tax  by  this  article  imposed,  and  any  one  who  acts  in  the 
matter  as  agent  or  broker  for  such  person  or  persons,  who  shall  make 
any  sale,  transfer  or  delivery  of  shares  or  certificates  of  stock,  without 
paying  the  tax  by  this  article  imposed,  and  any  person  who  shall  in 
pursuance  of  any  sale,  transfer  or  agreement,  deliver  any  stock  or 
evidence  of  the  sale  or  transfer  of  or  agreement  to  sell  any  stock,  or  bill 

*  So  in  original. 


ILLEGAL  USE  OF  STAMPS;  PENALTY        567 

or  memorandum  thereof,  or  who  shall  transfer  or  cause  the  same  to  be 
transferred  upon  the  books  or  records  of  the  association,  company  or 
corporation,  and  any  association,  company  or  corporation  whose  stock 
is  sold  or  transferred,  which  shall  transfer  or  cause  the  same  to  be 
transferred  upon  its  books,  without  having  the  stamps  provided  for  in 
this  article  affixed  thereto,  shall  be  deemed  guilty  of  a  misdemeanor, 
and  upon  conviction  thereof  shall  pay  a  fine  of  not  less  than  five  hun- 
dred nor  more  than  one  thousand  dollars,  or  be  imprisoned  for  not  more 
than  six  months  or  by  both  such  fine  and  imprisonment,  in  the  discre- 
tion of  the  court.  (Thus  am'd  by  L.  1911,  chap.  352,  L.  1912,  ch.  292,  in 
effect  May  1,1912.) 

§  273.  Canceling  stamps ;  penalty  for  failure.  In  every  case  where 
an  adhesive  stamp  shall  be  used  to  denote  the  payment  of  the  tax  pro- 
vided by  this  article,  the  person  using  or  affixing  the  same  shall  write  or 
stamp  thereupon  the  initials  of  his  name  and  the  date  upon  which  the 
same  shall  be  attached  or  used,  and  shall  cut  or  perforate  the  stamp  in  a 
substantial  manner,  so  that  such  stamp  cannot  be  again  used;  and  if 
any  person  makes  use  of  an  adhesive  stamp  to  denote  the  payment  of 
the  tax  imposed  by  this  article,  without  so  effectually  canceling  the 
same,  such  person  shall  be  deemed  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof  shall  pay  a  fine  of  not  less  than  two  hundred  nor 
more  than  five  hundred  dollars  or  be  imprisoned  for  not  less  than  six 
months,  or  both,  in  the  discretion  of  the  court.  (Thus  am'd  by  L.  1911, 
chap.  352,  in  effect  June  15, 1911.) 

§  274.  Contracts  for  dies ;  expenses  how  paid.  The  state  comptrol- 
ler is  hereby  directed  to  make,  enter  into  and  execute  for  and  in  behalf 
of  the  state  such  contract  or  contracts  for  dies,  plates  and  printing  nec- 
essary for  the  manufacture  of  the  stamps  provided  for  by  this  article, 
and  provide  such  stationery  and  clerk  hire  together  with  such  books 
and  blanks  as  in  his  discretion  may  be  necessary  for  putting  into  opera- 
tion the  provisions  of  this  article;  he  shall  be  the  custodian  of  all  stamps, 
dies,  plates  or  other  material  or  thing  furnished  by  him  and  used  in  the 
manufacture  of  such  state  tax  stamps,  and  all  expenses  incurred  by 
him  and  under  his  direction  in  carrying  out  the  provisions  of  this 
article  shall  be  paid  to  him  by  the  state  treasurer  from  any  moneys 
appropriated  for  such  purpose. 

§  275.  Illegal  use  of  stamps;  penalty.  Any  person  who  shall  will- 
fully remove  or  alter  or  knowingly  permit  to  be  removed  or  altered  the 
canceling  or  defacing  marks  of  any  stamp  provided  for  by  this  article 
with  intent  to  use  such  stamp,  or  who  shall  knowingly  or  willfully  buy, 
prepare  for  use,  use,  have  in  his  possession  or  suffer  to  be  used  any 
washed,  restored  or  counterfeit  stamp,  and  any  person  who  shall  in- 
tentionally remove  or  cause  to  be  removed  or  knowingly  permit  to  be 


568  STOCK   TRANSFER   STATUTE 

removed  any  stamp,  affixed  pursuant  to  the  requirements  of  this 
article,  shall  be  guilty  of  a  misdemeanor  and  on  conviction  thereof  shall 
be  liable  to  a  fine  of  not  less  than  five  hundred  nor  more  than  one  thou- 
sand dollars,  or  be  imprisoned  for  not  more  than  one  year,  or  by 
both  such  fine  and  imprisonment,  at  the  discretion  of  the  court. 
(Thus  am'd  by  L.  1911,  chap.  12;  L.  1912,  chap.  292,  in  effect  May  1, 
1912.) 

§  275a.  Registration;  penalty  for  failure.  Every  person,  firm,  com- 
pany, association  or  corporation  engaged  in  whole  or  in  part  in  the 
making  or  negotiating  of  sales,  agreements  to  sell,  deliveries  or  transfers 
of  shares  or  certificates  of  stock,  or  conducting  or  transacting  a  stock 
brokerage  business,  and  every  association,  company  or  corporation 
which  shall  keep  or  cause  to  be  kept  within  the  state  of  New  York  a 
place  for  the  sale,  transfer  or  delivery  of  its  stock,  shall  within  ten 
days  after  this  act  shall  take  effect,  or  if  at  the  time  this  act  shall  take 
effect,  not  engaged  in  such  business  or  maintaining  such  a  place  for  the 
sale  or  transfer  of  its  stock,  within  ten  days  after  engaging  in  such 
business  or  after  establishing  such  place  for  the  sale  or  transfer  of  its 
stock,  as  the  case  may  be,  file  in  the  office  of  the  comptroller  a  certificate 
setting  forth  the  name  under  which  such  business  is,  or  is  to  be,  con- 
ducted or  transacted,  and  the  true  or  real  full  name  or  names  of  the 
person  or  persons  conducting  or  transacting  the  same,  with  the  post- 
office  address  or  addresses  of  said  person  or  persons,  unless  the  party 
so  certifying  be  a  corporation,  in  which  event  it  shall  set  forth  its  said 
place  of  business  and  when  and  where  incorporated.  Said  certificate 
shall  be  executed  and  duly  acknowledged  by  the  person  or  persons  so 
conducting  or  intending  to  conduct  said  business  or  by  the  president 
or  secretary  of  the  corporation  as  the  case  may  be. 

In  the  event  of  a  change  in  the  persons  composing  such  firm,  com- 
pany or  association  or  of  the  address  of  any  such  person,  firm,  com- 
pany, association  or  corporation,  or  termination  of  such  business  or 
relationship,  a  like  certificate  setting  forth  the  facts  with  respect  to 
such  change  or  termination  shall  within  ten  days  thereafter  be  filed 
in  the  office  of  the  comptroller. 

Any  such  person,  firm,  company,  association  or  corporation  who 
shall  fail  to  comply  with  the  provisions  of  this  section  shall  be  guilty 
of  a  misdemeanor,  and  upon  conviction  thereof  shall  pay  a  fine  of  not 
less  than  one  hundred  dollars  nor  more  than  five  hundred  dollars  or 
be  imprisoned  for  not  more  than  six  months  or  by  both  such  fine  and 
imprisonment,  in  the  discretion  of  the  court.  (Thus  added  by  L. 
1913,  chap.  779,  in  effect  July  1, 1918.) 

§  276.  Power  of  state  comptroller.  Every  person,  firm,  company, 
association  or  corporation,  engaged  in  whole  or  in  part  in  the  making  or 
negotiating  of  sales,  agreements  to  sell,  deliveries  or  transfers  of  shares 


POWER   OF   STATE    COMPTROLLER  569 

or  certificates  of  stock,  or  conducting  or  transacting  a  brokerage  busi- 
ness, shall  keep  or  cause  to  be  kept  at  some  accessible  place  within  the 
state  of  New  York,  a  just  and  true  book  of  account,  in  such  form  as 
may  be  prescribed  by  the  comptroller,  wherein  shall  be  plainly  and 
legibly  recorded  in  separate  columns,  the  date  of  making  every  sale, 
agreement  to  sell,  delivery  or  transfer  of  shares  or  certificates  of  stock, 
the  name  of  the  stock  and  the  number  of  shares  thereof,  the  face 
value  of  the  stock,  the  name  of  the  seller  or  transferor,  the  name  of 
the  purchaser  or  transferee  and  the  number  and  face  value  of  the 
adhesive  stamps  affixed  and  the  identifying  number  of  the  bill  or 
memorandum  of  sale  as  used  as  provided  for  by  section  two  hun- 
dred and  seventy  of  this  chapter. 

Every  association,  company  or  corporation  shall  keep  or  cause  to 
be  kept  at  some  accessible  place  within  the  state  of  New  York  a  stock 
certificate  book  and  a  just  and  true  book  of  account,  transfer  ledger  or 
register,  in  such  form  as  may  be  prescribed  by  the  comptroller,  wherein 
shall  be  plainly  and  legibly  recorded  in  separate  columns  the  date  of 
making  every  transfer  of  stock,  the  name  of  the  stock  and  the  number 
of  shares  thereof,  the  serial  number  of  each  surrendered  certificate,  the 
name  of  the  party  surrendering  such  certificate,  the  serial  number  of 
the  certificate  issued  in  exchange  therefor,  the  number  of  shares  covered 
by  said  certificate,  the  name  of  the  party  to  whom  said  certificate 
was  issued  and  evidence  of  the  payment  of  the  tax  provided  for  by 
section  two  hundred  and  seventy  of  this  chapter,  which  evidence, 
however,  shall  be  provided  in  one  of  the  following,  manners  and  not 
otherwise,  to  wit : 

(a)  By  attaching  to  the  stock  certificate  surrendered  for  transfer, 
the  stamps  required  for  such  transfer,  or 

(b)  If  the  stamps  are  not  attached  to  the  certificate,  but  are  at- 
tached to  the  bill  or  memorandum  of  sale  effecting  or  evidencing  the 
transfer  of  such  certificate,  by  attaching  to  said  certificate  the  said 
bill  or  memorandum  of  sale  with  stamps  attached,  or 

(c)  If  the  stamps  covering  the  transfer  are  attached  to  a  bill  or 
memorandum  effecting  a  transfer  of  one  or  more  certificates  or  to 
one  or  more  certificates  included  in  said  transfer,  a  notation  must  be 
made  upon  such  certificates,  bill  or  memorandum,  as  the  case  may  be, 
clearly  specifying  and  identifying  the  certificate  or  certificates  of 
stock  to  the  sale  or  transfer  of  which  the  said  stamps  apply,  or 

(d)  If  the  bill  or  memorandum  bearing  such  stamps  is  not  at- 
tached to  the  surrendered  certificate  or  certificates  to  which  it  applies, 
a  notation  must  be  made  upon  such  bill  or  memorandum  stating  the 
serial  number  or  numbers  of  the  certificates  to  which  said  bill  or  mem- 
orandum applies,  as  provided  by  section  two  hundred  and  seventy 
of  this  chapter.    It  shall  also  retain  and  keep  all  surrendered  or  can- 
celed shares  or  certificates  of  its  stock  and  all  memoranda  relating 
to  the  sale  or  transfer  or  any  thereof.     All  such  books  of  account, 


570  STOCK  TRANSFER  STATUTE 

transfer  ledgers,  registers  and  stock  certificate  books  shall  be  retained 
and  kept  as  aforesaid  for  a  period  of  at  least  two  years  subsequent  to 
the  date  of  the  last  entry  made  therein  as  herein  required;  and  all 
such  surrendered  or  canceled  shares  or  certificates  of  stock  and  mem- 
oranda relating  to  the  sale  or  transfer  of  stock,  shall  be  retained  and 
kept  for  a  period  of  at  least  two  years  from  the  date  of  the  delivery 
thereof.  For  the  purpose  of  ascertaining  whether  the  tax  imposed  by 
this  article  has  been  paid,  all  such  books  of  account,  transfer  ledgers, 
registers,  stock  certificate  books,  surrendered  or  canceled  shares  or 
certificates  of  stock  and  memoranda  relating  to  the  sale  or  transfer 
thereof,  shall  at  all  times  between  the  hours  of  ten  o'clock  in  the  fore- 
noon and  three  o'clock  in  the  afternoon,  except  Saturdays,  Sundays 
and  legal  holidays,  be  open  to  examination  by  the  comptroller  or  his 
duly  authorized  representative. 

The  comptroller  may  enforce  his  right  to  examine  such  books  of 
account  and  bills  of  memoranda  of  sale  or  transfer;  and  such  transfer 
ledger,  register  and  stock  certificate  books  and  surrendered  or  canceled 
shares  or  certificates  of  stock  by  mandamus.  If  the  comptroller 
ascertains  that  the  tax  provided  for  in  this  article  has  not  been 
paid,  he  shall  bring  an  action  in  his  name  as  such  comptroller,  in 
any  court  of  competent  jurisdiction  for  the  recovery  of  such  tax  and 
for  any  penalty  incurred  by  any  person  under  the  provisions  of  this 
article. 

Every  person,  firm,  company,  association  or  corporation  who  shall 
fail  to  keep  such  book  of  account  or  bills  or  memoranda  of  sale  or 
transfer,  or  transfer  ledger,  register  or  stock  certificate  book  or  sur- 
rendered or  canceled  shares  or  certificates  of  stock  as  herein  required, 
or  who  alters,  cancels,  obliterates  or  destroys  any  part  of  said  records, 
or  makes  any  false  entry  therein,  or  who  shall  refuse  to  permit  the 
comptroller  or  any  of  his  authorized  representatives  freely  to  examine 
any  of  said  books,  records  or  papers  at  any  of  the  times  herein  pro- 
vided, or  who  shall  in  any  other  respect  violate  any  of  the  provisions 
of  this  section  shall  be  deemed  guilty  of  a  misdemeanor  and  on  con- 
viction thereof  shall  for  each  and  every  such  offense  pay  a  fine  of  not 
less  than  five  hundred  dollars  nor  more  than  five  thousand  dollars,  or 
be  imprisoned  not  less  than  three  months  nor  more  than  two  years,  or 
both  in  the  discretion  of  the  court.  (Thus  am'd  by  L.  1910,  chap.  453; 
L.  1911,  chap.  352;  L.  1912,  chap.  292;  L.  1913,  chap.  779,  in  effect 
July  1, 1918.) 

§  277.  Civil  penalties;  how  recovered.  Any  person,  firm,  company, 
association  or  corporation  who  shall  violate  any  of  the  provisions  of 
section  two  hundred  and  seventy  or  section  two  hundred  and  seventy- 
two  of  this  chapter  shall  in  addition  to  the  penalties  herein  provided 
forfeit  to  the  people  of  the  state  a  civil  penalty  of  ten  dollars  for  each 
and  every  share  of  stock  so  sold  or  transferred,  or  transferred  or  entered 


EEFUND  OF  TAX  ERRONEOUSLY  PAID       571 

upon  the  books  of  the  corporation,  as  the  case  may  be,  without  the 
payment  of  the  tax  by  this  article  imposed  thereon.  Any  person  who 
shall  violate  any  of  the  other  provisions  of  this  article  shall  in  addition 
to  the  penalties  hereinbefore  provided  forfeit  to  the  people  of  the  state 
a  civil  penalty  of  five  hundred  dollars  for  each  and  every  such  violation. 
The  state  comptroller  shall  bring  action  in  his  name  as  such  comp- 
troller in  any  court  of  competent  jurisdiction  for  the  recovery  of  any 
civil  penalty;  and  all  moneys  collected  by  him  shall  be  paid  into  the 
state  treasury.  In  an  action  against  a  corporation  or  its  transfer  agent 
to  recover  a  penalty  because  of  its  transfer  of  stock  upon  the  books  or 
records  of  the  corporation  without  requiring  the  payment  of  the  tax 
by  this  article  imposed,  the  failure  of  the  corporation  or  its  transfer 
agent,  on  the  demand  of  the  comptroller  or  his  duly  authorized  repre- 
sentative, to  produce  the  surrender  certificate  or  memoranda  of  sale 
with  the  required  stamps  attached,  shall  constitute  prima  facie  proof 
of  the  nonpayment  of  the  tax  imposed  by  section  two  hundred  and 
seventy  of  this  chapter.  (Thus  am'd  by  L.  1912,  chap.  292,  in  effect 
May  1,  1912.} 

§  278.  Effect  of  failure  to  pay  tax.  No  transfer  of  stock  made  after 
June  first,  nineteen  hundred  and  five,  on  which  a  tax  is  imposed  by  this 
article,  and  which  tax  is  not  paid  at  the  time  of  such  transfer,  shall  be 
made  the  basis  of  any  action  or  legal  proceedings,  nor  shall  proof  thereof 
be  offered  or  received  in  evidence  in  any  court  in  this  state. 

§  279.  Application  of  taxes.  The  taxes  imposed  under  this  article 
and  the  revenues  thereof  shall  be  paid  by  the  state  comptroller  into 
the  state  treasury  and  be  applicable  to  the  general  fund,  and  to  the 
payment  of  all  claims  and  demands  which  are  a  lawful  charge  thereon. 

§  280.  Refund  of  tax  erroneously  paid.  If  any  stamp  or  stamps 
shall  have  been  erroneously  affixed  to  any  book,  certificate  of  stock,  or 
bill  or  memorandum  of  sale,  the  comptroller  may,  upon  presentation  of 
a  claim  for  the  amount  of  such  stamp  or  stamps  and  upon  the  produc- 
tion of  evidence  satisfactory  to  him  that  such  stamp  or  stamps  was  or 
were  so  erroneously  affixed  as  to  cause  loss  to  the  person  or  persons 
making  such  claim,  pay  such  amount,  or  such  part  thereof  as  he  may  al- 
low, to  such  claimant  out  of  any  moneys  appropriated  for  that  purpose. 
Such  claims  shall  be  presented  to  the  comptroller  in  writing,  duly  veri- 
fied, and  shall  state  the  full  name  and  address  of  the  claimant,  the  date 
of  such  erroneous  affixing,  the  face  value  of  such  stamp  or  stamps  and 
shall  describe  the  instrument  to  which  the  stamp  or  stamps  were 
affixed  and  contain  such  evidence  as  may  be  available  upon  which 
the  demand  for  such  refund  is  based.  Such  claims  shall  be  presented 
within  ninety  days  after  such  erroneous  affixing  unless  such  affixing 
shall  have  taken  place  prior  to  the  date  on  which  this  act  shall  take 


572  STOCK  TRANSFER  STATUTE 

effect,  in  which  case  such  claim  shall  be  presented  within  ninety  days 
after  the  date  on  which  this  act  shall  take  effect.  If  the  comptroller 
rejects  a  claim  or  any  part  thereof,  the  claimant  may  file  a  claim  for  the 
recovery  of  such  sum  as  the  comptroller  shall  have  refused  to  allow, 
with  the  court  of  claims,  which  shall  constitute  a  private  claim  against 
the  state  and  shall  be  subject  to  all  the  provisions  of  law  governing  such 
claims,  except  that  all  claims  so  presented  shall  be  filed  with  the  court  of 
claims  within  ninety  days  from  the  date  on  which  such  claim  shall  be 
rejected  by  the  comptroller.  For  the  purposes  of  this  section,  the 
comptroller's  decision  shall  be  deemed  to  have  been  made  at  the  time 
of  the  depositing  of  a  copy  of  such  decision  in  the  post-office  inclosed  in 
a  duly  post-paid  wrapper  and  directed  to  the  person  making  such  claim 
at  the  address  contained  in  the  verified  claim  presented  to  the  comp- 
troller as  hereinbefore  provided.  (Added  by  L.  1910,  chap.  186,  in  effect 
April  29,  1910.) 


TAXES  ON  TRANSFERS  OF  STOCK 

RULINGS   OF   THE   STATE    COMPTROLLER 

For  the  information  of  the  public  the  Comptroller,  under  date 
of  July  1,  1913,  issued  the  following  statement  of  the  more 
general  rules  and  regulations  governing  the  imposition  and 
collection  of  stock  transfer  taxes,  prepared  pursuant  to  the 
rulings  made  by  the  Attorney-General. 

1.  The  application  and  scope  of  the  Stock  Transfer  Tax  Law  has 
been  considerably  broadened  by  the  amendments  thereto,  effected  by 
chapter  352  of  the  Laws  of  1911,  chapter  292  of  the  Laws  of  1912,  and 
chapter  779  of  the  Laws  of  1913,  with  the  result  that  the  rulings  hereto- 
fore made  asserting  exemptions  from  the  tax  are  not  now  as  a  rule  con- 
trolling. 

2.  By  the  statute  as  amended,  a  tax  is  imposed  upon  all  sales  or 
agreements  to  sell  and  upon  all  deliveries  or  transfers  of  shares  or 
certificates  of  stock  of  any  and  all  associations,  companies  and  cor- 
porations, whether  domestic  or  foreign  at  the  rate  of  two  cents  on  each 
hundred  dollars  of  face  value  or  fraction  thereof,  except  where  shares  or 
certificates  of  stock  are  issued  without  designated  monetary  value,  in 
which  case  the  tax  shall  be  two  cents  for  each  and  every  share  of  such 
stock. 

3.  The  statute  does  not  apply  to  the  original  issue  of  stock;  but  all 
sales  or  transfers  made  subsequent  thereto,  whether  intermediate  or 
final,  are  taxable. 

4.  It  is  not  necessary  to  render  it  taxable  that  the  transaction  involve 
a  sale.    By  the  statute,  as  amended,  a  tax  is  imposed  upon  all  sales  or 
transfers  of  shares  or  certificates  of  stock,  whether  operating  to  convey 
the  beneficial  interest  in  or  merely  the  legal  title  to  said  stock,  or  pos- 
session thereof  for  any  purpose.    The  only  exceptions  to  this  rule  are  those 
expressly  provided  for  in  section  270  of  the  law. 

5.  The  transfer  to  and  from  voting  trustees  is  taxable,  also  the  trans- 
fer of  voting  trust  certificates. 

6.  The  mere  surrender  of  a  certificate  of  stock  for  reissue  in  smaller 
denominations  is  not  taxable;  but  if  reissued  in  part  to  the  original 
owner  and  in  part  to  a  third  party  it  is  taxable  to  the  extent  of  the 
transfer  to  the  third  party. 

7.  Likewise  the  mere  surrender  of  a  certificate  of  stock  held  by  a 

573 


574  STOCK  TRANSFER  STATUTE 

deceased  person  for  issuance  in  the  name  of  his  executor  or  adminis- 
trator is  not  taxable;  but  all  transfers  made  by  the  latter,  whether  to 
trustees,  legatees  or  other  persons,  are  taxable. 

8.  The  law  applies  to  the  stock  of  foreign  as  well  as  domestic  cor- 
porations and  to  residents  and  non-residents  alike. 

9.  While  the  law  has  no  extra  territorial  operation,  nevertheless, 
where  it  appears  that  the  transfer  of  the  stock  on  the  corporate  books 
within  this  State  is  essential  to  render  the  transfer  effectual,  it  subjects 
it  to  a  tax  although  in  all  other  respects  made  without  the  State. 

10.  It  is  the  duty  of  the  person  making  or  effectuating  the  sale  or 
transfer  to  pay  the  required  tax  by  procuring,  affixing  and  canceling 
the  stamps,  except  that  where  a  sale  or  transfer  is  shown  only  by  the 
books  of  the  corporation,  the  person  making  the  sale  must  secure,  and 
the  corporation  affix  and  cancel  the  stamps  to  its  books.    (Sec.  270.) 

11.  Where  the  sale  or  transfer  is  effected  by  the  delivery  or  transfer 
of  a  certificate  the  stamp  must  be  placed  upon  the  surrendered  certif- 
icate.   In  case  of  an  agreement  to  sell,  or  where  the  sale  is  effected  by 
the  delivery  of  the  certificate  assigned  in  blank,  there  must  be  made 
and  delivered  by  the  seller  to  the  buyer  a  bill  or  memorandum  of  such 
sale,  to  which  the  stamps  shall  be  affixed  and  canceled.    This  bill  or 
memorandum  with  stamp  attached  must  be  affixed  to  the  certificate, 
or  properly  identified  as  provided  by  section  276,  when  presented  for 
transfer. 

A  strict  compliance  with  these  requirements  will  be  insisted  upon. 

12.  Every  such  bill  or  memorandum  of  sale,  agreement  to  sell  or  sales 
ticket  must  show: 

(a)  The  date  of  the  transaction  which  it  evidences. 
(6)  The  name  of  the  seller. 

(c)  The  stock  to  which  it  relates  and  the  number  of  shares  thereof; 

and  all  such  memorandum  of  sale  or  sales  ticket  as  are  not 
used  for  the  purpose  of  transfer  must  be  kept  by  the  broker 
for  two  years  from  their  respective  dates. 

(d)  And  an  identifying  number  as  provided  by  section  270. 

13.  All  persons  liable  for  the  payment  of  the  tax  and  all  persons  act- 
ing as  agents  or  brokers  for  any  such  persons  or  for  the  corporation 
whose  stock  is  transferred,  who  in  any  manner  assists  in  consummating 
a  sale  or  transfer  without  payment  of  the  required  tax,  are  guilty  of  a 
misdemeanor. 

14.  Likewise  corporations,  and  persons  acting  as  transfer  agents  for 
corporations,  are  forbidden  to  transfer  stock  on  the  books  of  the  cor- 
poration until  the  required  tax  has  been  paid;  and  for  a  failure  to  per- 
form this  duty  they  are  guilty  of  a  misdemeanor. 

15.  Every  stamp  used  to  denote  the  payment  of  the  tax  must  be 
canceled  by  the  user  by  writing  or  stamping  thereon  the  initials  of  his 
name  and  the  date  upon  which  the  stamp  is  attached  or  used.    He 
must  also  cut  or  perforate  the  stamp  in  a  substantial  manner  so  that 


RULINGS   OF   STATE    COMPTROLLER  575 

it  cannot  again  be  used.    A  failure  so  to  do  renders  the  party  guilty  of 
a  misdemeanor. 

16.  Under  no  circumstances  may  a  stamp  erroneously  attached  to  a 
certificate  or  memorandum  be  removed.    An  adequate  remedy  in  such 
cases,  in  the  nature  of  a  refund,  is  provided  by  section  280  of  the  act. 

17.  Every  broker  is  required  to  keep  a  just  and  true  book  of  account 
in  the  form  prescribed  by  the  Comptroller  (see  form  designated  "ac- 
count book  to  be  kept  by  brokers"  on  page  2)  wherein  shall  be  plainly 
and  legibly  recorded  in  separate  columns: 

(a)  The  date  of  making  every  sale,  agreement  to  sell,  delivery  or 

transfer  of  shares  or  certificates  of  stock. 
(6)  The  name  of  the  stock  and  the  number  of  shares  thereof. 

(c)  The  face  value  thereof. 

(d)  The  name  of  the  seller  or  transferred 

(e)  The  name  of  the  purchaser  or  transferee. 

(/)  The  identifying  number  of  the  bill  or  memorandum  of  sales  as 

provided  by  section  270. 

These  books  must  be  kept  for  a  period  of  at  least  two  years  subse- 
quent to  the  date  of  such  entry  made  therein  and  are  subject  to  exam- 
ination by  the  Comptroller  or  his  representatives  at  all  tunes  between 
10  A.  M.  and  3  P.  M.  (Saturdays,  Sundays  and  legal  holidays  excepted). 

18.  Every  corporation  or  its  transfer  agent  shall  keep  a  just  and  true 
book  of  account  in  the  form  prescribed  by  the  Comptroller  (see  form 
designated  "account  book  to  be  kept  by  corporations  and  transfer 
agents"  on  page  2),  wherein  shall  be  plainly  and  legibly  recorded  in 
separate  columns: 

(a)  The  date  of  making  every  transfer  of  stock. 

(&)  The  name  of  the  stock  and  the  number  of  shares  thereof. 

(c)  The  serial  number  of  each  surrendered  certificate. 

(d)  The  name  of  the  party  surrendering  each  certificate. 

(e)  The  serial  number  of  the  certificate  issued  in  exchange  therefor. 

(f)  The  number  of  shares  represented  by  said  certificate. 

(g)  The  name  of  the  party  to  whom  said  certificate  was  issued. 
(h)  The  evidence  of  the  payment  of  the  tax  as  provided  by  sec- 
tion 276. 

It  shall  also  keep  and  retain  a  stock  certificate  book  and  all  sur- 
rendered or  canceled  shares  or  certificates  of  its  stock  and  memoranda 
relating  to  the  sale  thereof  for  a  period  of  two  years  from  the  date  of 
the  delivery  thereof. 

All  such  books  and  papers  are  subject  to  the  examination  by  the 
Comptroller  or  his  representative  at  any  time  between  the  hours  of 
10  A.  M.  and  3  P.  M.  (Saturdays,  Sundays  and  legal  holidays  ex- 
cepted). 

19.  It  is  imperative  that  these  books,  records  and  memoranda  be 
kept  and  retained  strictly  in  the  form  and  manner  provided  by  the 
statute  and  severe  penalties  are  imposed  for  a  failure  so  to  do. 


576  STOCK  TRANSFER  STATUTE 

20.  Severe  penalties,  civil  and  criminal,  are  also  provided  by  the 
act  for  the  illegal  sale  or  use  of  stamps,  for  the  removal  or  re-use  thereof, 
for  the  failure  to  pay  the  tax  imposed  and  for  the  violation  of  the  other 
requirements  of  the  statute.    Furthermore,  the  failure  to  pay  the  tax 
constitutes  an  absolute  defense  to  an  action  to  recover  the  purchase 
price  of  the  stock. 

21.  Every  person,  firm,  company,  association  or  corporation  engaged 
in  whole  or  in  part  in  the  making  or  negotiating  of  sales,  agreements  to 
sell,  deliveries  or  transfers  of  shares  or  certificates  of  stock,  or  conduct- 
ing or  transacting  a  stock  brokerage  business,  shall  within  ten  days 
after  July  1,  1913,  or  within  ten  days  after  engaging  in  such  business, 
file  with  the  State  Comptroller,  either  in  Albany  or  New  York  City,  a 
certificate  setting  forth  the  name  under  which  such  business  is  or  is  to 
be  conducted  or  transacted  and  the  true  and  real  full  names  of  the 
person  or  persons  conducting  or  transacting  the  same,  with  the  post- 
office  address  or  addresses  of  said  persons,  or  in  the  event  of  a  change 
in  the  persons  conducting  such  business  or  change  of  address,  like 
certificate  setting  forth  the  facts  shall  within  ten  days  thereafter  be 
filed.    Such  certificate  shall  be  duly  acknowledged.    A  failure  to  per- 
form this  duty  is  a  misdemeanor. 

22.  Every  association,  company  or  corporation  who  shall  keep  or 
cause  to  be  kept  within  the  State  of  New  York  a  place  for  the  sale, 
transfer  or  delivery  of  its  stock  shall  within  ten  days  after  July  1,  1913, 
or  within  ten  days  after  engaging  in  or  maintaining  a  place  for  such 
business,  file  with  the  State  Comptroller,  either  in  Albany  or  New  York 
City,  a  certificate  setting  forth  the  name  of  the  company,  the  place  of 
business  and  when  and  where  incorporated,  or  in  the  event  of  a  change 
in  the  persons  or  change  of  address  like  certificate  setting  forth  the 
facts  shall  within  ten  days  thereafter  be  filed.    Such  certificates  shall 
be  duly  acknowledged  by  the  president  or  secretary  of  the  corporation. 
A  failure  to  perform  this  duty  is  a  misdemeanor. 


(BILL  OR  MEMORANDUM  OF  SALE  REQUIRED  BY  SECTION  270,  TAX  LAW.) 

No Date 

NAME  OF  SELLER 


Sold  to. 


(Stock  to  which  it  relates  and  number  of  shares) 
HERE    AFFIX    AND    CANCEL   STAMPS 


RULINGS    OF   STATE    COMPTROLLER 


577 


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578  STOCK   TRANSFER    STATUTES 


(CERTIFICATE  TO  BE  FILED  WITH  THE  COMPTROLLER  BY  STOCK  BROKERS, 
SECTION  275-a,  TAX  LAW.) 


I  hereby  certify  that  the  following  named  persons .  . 

(Here  act  forth  full  names  and  addresses) 


are  engaged  in  business  as  stock  brokers  under  the  trade  name  or  style  of 

at  No ,  hi  Ihe  city  of 

,  New  York. 

Dated ,  191.. 


X  ss.: 


STATE  OF  NEW  YORK 

COUNTY  OF 

On  this day  of , 

191 . ,  before  me,  the  subscriber,  personally  came , 

to  me  known  to  be  the  person  named  in  and  who  executed  the  foregoing 
certificate  and  he  duly  acknowledges  to  me  that  he  executed  the  same. 


Notary  Public. 


RULINGS    OF   STATE   COMPTROLLER  579 


(CERTIFICATE  TO  BE  FILED  WITH  THE  COMPTROLLER  BY  ASSOCIATIONS  AND 
CORPORATIONS,  SECTION  275-a,  TAX  LAW.) 

President    ,  ,, 

I, ,  a  of  the 

Secretary 


(Name  of  association  or  corporation) 

do  hereby  certify  that  the  said  keeps  a  place  for  the  sale,  transfer 

corporation 

or  delivery  of  its  stock  at  No ,  in  the  city 

of ,  N.  Y. 

Incorporated ,  Laws  of  the  State  of 


President. 
Secretary. 


STATE  OF  NEW  YORK 

COUNTY  OF 

On  this day  of 191 ., 

before  me,  the  subscriber,  personally  came 

to  me  known  and  who  being  by  me  duly  sworn  did  depose  and  say  that  he  is 

President    ,  .,  corporation    , 

the  „  of  the .  , .       above 

Secretary  association 

named  and  that  he  executed  the  foregoing  on  behalf  of  said 

association 

pursuant  to  authority  vested  in  him  by  a  vote  of  the  board  of  directors  of 

.  ,  corporation, 
said 

association. 


Notary  Public. 


580       TABLES   OF   SUPERINTENDENT   OF   INSURANCE 


TERMINAL  ANNUITIES  AND  SINGLE  PREMIUMS,  WHOLE  LIFE 
Am.  Ex.  5  per  cent 


AGE 

Ax 

AGE 

Ax 

AGE 

IIx 

AGE 

IIx 

10 

16.50475 

65 

10.37017 

10 

166.4407 

65 

458.5633 

11 

16.46076 

56 

10.09472 

11 

168.5351 

56 

471.6801 

12 

16.41469 

67 

9.81450 

12 

170.7287 

57 

485.0235 

13 

16.36642 

68 

9.52988 

13 

173.0276 

58 

498.5768 

14 

16.31581 

69 

9.24127 

14 

175.4375 

59 

512.3205 

16 

16.26274 

60 

8.94928 

16 

177.9650 

60 

526.2248 

16 

16.20722 

61 

8.65445 

16 

180.6083 

61 

540.2642 

17 

16.14896 

62 

8.35742 

17 

183.3827 

62 

554.4086 

18 

16.08779 

63 

8.05876 

18 

186.2957 

63 

568.6310 

19 

16.02372 

64 

7.75900 

19 

189.3469 

64 

582.9048 

20 

15.95658 

65 

7.45885 

20 

192.5439 

65 

597.1978 

21 

15.88620 

66 

7.15921 

21 

195.8953 

66 

611.4659 

22 

15.81257 

67 

6.86074 

22 

199.4013 

67 

625.6789 

23 

15.73552 

68 

6.56420 

23 

203.0705 

68 

639.8004 

24 

15.65484 

69 

6.27048 

24 

206.9124 

69 

653.7863 

25 

15.57033 

70 

5.98022 

26 

210.9368 

70 

667.6088 

26 

15.48176 

71 

5.69422 

26 

215.1541 

71 

681.2272 

27 

15.38910 

72 

5.41286 

27 

219.5669 

72 

694.6255 

28 

15.29210 

73 

5.13592 

28 

224.1862 

73 

707.8131 

29 

15.19051 

74 

4.86279 

29 

229.0238 

74 

720.8198 

30 

15.08425 

76 

4.59264 

30 

234.0834 

76 

733.6839 

31 

14.97307 

76 

4.32477 

31 

239.3780 

76 

746.4392 

32 

14.85666 

77 

4.05856 

32 

244.9208 

77 

759.1162 

33 

14.73492 

78 

3.79392 

33 

250.7176 

78 

771.7182 

34 

14.60774 

79 

3.53109 

34 

256.7742 

79 

784.2337 

35 

14.47479 

80 

3.27017 

35 

263.1055 

80 

796.6584 

36 

14.33572 

81 

3.01349 

36 

269.7275 

81" 

808.8814 

37 

14.19057 

82 

2.76062 

37 

276.6394 

82 

820.9229 

38 

14.03897 

83 

2.51052 

38 

283.8584 

83 

832.8324 

39 

13.88092 

84 

2.26066 

39 

291.3845 

84 

844.7301 

40 

13.71604 

85 

2.00986 

40 

299.2359 

86 

856.6738 

41 

13.54430 

86 

1.76061 

41 

307.4145 

86 

868.5428 

42 

13.36528 

87 

1.51750 

42 

315.9393 

87 

880.1201 

43 

13.17891 

88 

1.28611 

43 

324.8138 

88 

891.1386 

44 

12.98494 

89 

1.06704 

44 

334.0508 

89 

901.6688 

45 

12.78344 

90 

0.85453 

46 

343.6458 

90 

911.6885 

46 

12.57414 

91 

0.64497 

46 

353.6124 

91 

921.6672 

47 

12.35728 

92 

0.44851 

47 

363.9390 

92 

931.0234 

48 

12.13275 

93 

0.28761 

48 

374.6311 

93 

938.6849 

49 

11.90076 

94 

0.13605 

49 

385.6781 

94 

945.8987 

60 

11.66175 

96 

0.00000 

60 

397.0598 

96 

952.3973 

61 

11.41594 

51 

408.7648 

62 

11.16361 

62 

420.7810 

63 

10.90499 

53 

433.0958 

64 

10.64036 

64 

445.6972 

TABLES   OF   SUPERINTENDENT   OF   INSURANCE        581 

The  superintendent  of  insurance  uses  for  computation  of 
present  values  to  be  determined  by  him  in  pursuance  of  the 
provisions  of  the  third  paragraph  of  §  230  and  the  second 
paragraph  of  §  231,  the  foregoing  table  of  "Terminal  Annuities 
and  Single  Premiums,  Whole  Life.  American  Experience  5 
per  cent." 

He  also  makes  use  of  other  tables  of  annuity  and  remainder 
values.  The  different  computations  sometimes  necessary  to  be 
made  are  complicated  and  the  explanation  of  them  would  form 
the  basis  of  a  substantial  book  on  the  subject.  As  these  cal- 
culations are  not  made  by  the  attorney,  but  are  computed  by 
the  superintendent  of  insurance  it  hardly  seems  necessary  to 
publish  other  than  the  first  named  table  which  will  serve  as  an 
illustration  of  the  method  used. 

Life  estates 

In  this  table  the  first  two  columns  headed  Ax  are  used  for  the 
computation  of  the  present  values  of  life  estates. 

For  instance,  the  present  value  of  a  net  life  estate  in  $25,000 
to  A,  aged  49,  is  calculated  by  multiplying  $25,000  by  5%,  and 
then  multiplying  the  result  of  $1,250  by  11.90076,  thus  ob- 
taining $14,875.95  as  the  present  value  of  the  life  estate. 

Remainders 

The  columns  entitled  IIx  are  used  for  the  computation  of  the 
present  value  of  remainders. 

For  instance,  the  present  value  of  remainder  in  $25,000,  the 
life  tenant  being  49  years  of  age,  is  obtained  by  pointing  off  three 
points  on  the  principal  and  then  multiplying  by  385.6781. 
Thus,  $25,000  x  385.6781  =$9,641.95,  the  present  value  of  the 
remainder. 


COMPENDIUM  OF  THE 
INHERITANCE  TAX  LAW  AND  PRACTICE 

ARRANGED   TOPICALLY   IN   ALPHABETICAL   ORDER 

With  the  exception  of  the  several  chapters  dealing 
respectively  with  the  Taxable  Transfer,  page  33,  Rates 
of  Tax  and  Exemptions,  page  40,  Procedure,  page  54, 
and  Non-Resident  Estates,  page  133,  the  law  and  practice 
of  inheritance  taxation  is  discussed  topically  in  the 
following  pages.  The  arrangement  of  the  subjects  in 
alphabetical  order,  and  the  system  of  cross  refer- 
ences, have  combined  to  do  away  with  the  conventional 
index. 

In  the  case  of  decisions  of  the  surrogates  which  do  not 
appear  in  the  reports,  it  has  seemed  advisable,  in  many 
instances,  to  give  the  opinion  in  full,  rather  than  to 
attempt  a  digest  which  may  omit  a  point  salient  to  the 
exigencies  of  the  matter  the  practitioner  has  in  mind  when 
he  consults  the  opinion. 

ACCOUNTING 

Vide  second  sentence  of  §  236,  supra,  page  25,  and  Matter  of 
Meyer,  209  N.  Y.  386,  supra,  page  397. 

ACCOUNTS  RECEIVABLE 

Vide  Schedule  A6  supra,  page  118  and  Chose  in  Action,  post, 
page  609. 

ACCRUAL  OF  TAX 

Vide  Time  of  Tax,  post,  page  859. 

ACCRUED  INTEREST 

Interest  accrued  to  date  of  death  is  taxable.  Matter  of 
Hewitt,  181  N.  Y.  547,  supra,  page  301. 

Increase  or  interest  after  death  is  property  of  which  decedent 
was  not  possessed  at  the  time  of  his  death,  and  is  not  subject  to 
tax.    Matter  of  Vassar,  127  N.  Y.  1-8. 
582 


ADOPTED    CHILD  583 

ACCRUED  RIGHTS 

Vide  Remainders. 

ACTS 

PRESENT  statute  supra,  page  3. 

PRIOR  statutes  arranged  chronologically,  supra,  page  403. 

ADDITIONAL  PAPERS 

Surrogate,  in  his  discretion,  has  right  to  deny  application  to 
submit  additional  papers.  Matter  of  Wormser,  51  App.  Div. 
441-445.  Vide  Appeal,  post,  page  590. 

ADMINISTRATION  EXPENSES 

Vide  Schedule  B2  supra,  page  125. 

ADMINISTRATOR'S  COMMISSIONS 

Vide  Schedule  B2,  supra,  page  125. 

ADMISSION  OF  SERVICE 

Admission  of  service  of  a  notice  of  appeal  to  surrogate  under 
§  232  by  attorney  of  the  state  comptroller  "  cannot  be  accepted 
as  a  waiver  of  the  default  in  appealing,  for  the  validity  of  the 
appeal  depended  not  upon  the  service  thereof  upon  the  attorney, 
but  upon  timely  filing  of  the  notice  in  the  surrogate's  office." 
Matter  of  Seymour,  144  App.  Div.  151-152. 

ADMISSION  OF  TESTIMONY 

Vide  Testimony,  post,  page  853. 

ADOPTED  CHILD 

Any  child  "adopted  as  such  in  conformity  with  the  laws  of 
this  state"  is  entitled  to  the  five  thousand  dollar  exemption  and 
the  minimum  rates  set  forth  in  subdivision  1  of  section  221a. 

BURDEN  OF  PROOF  is  upon  person  claiming  exemption.  In 
Matter  of  Fisch,  34  Misc.  146-147,  testator  in  his  will  left  cer- 
tain property  to  "my  niece  and  adopted  daughter."  Surrogate 
Fitzgerald  held  that  the  mere  recital  in  the  will  was  not  con- 
clusive. "The  only  reference  to  the  matter  I  find  in  the  proofs 
attached  to  the  report  is  contained  in  the  affidavit  of  one  of  the 
daughters,  wherein  she  furnishes  the  names  of  the  legatees  and 
devisees  in  the  will,  their  places  of  residence  and  relationship. 
The  evidence  adduced  to  support  a  claim  of  exemption  is 
insufficient." 


584  ADVANCEMENTS 

ADOPTION  not  required  to  be  under  laws  of  this  state,  al- 
though the  adoption  must  be  "in  conformity  with  the  laws  of 
this  state/'  Matter  of  Butler,  58  Hun,  400,  affirmed,  without 
opinion,  136  N.  Y.  649. 

The  present  statute,  subd.  1  of  §  221a,  does  not  differ  in 
language  as  to  adoption  from  the  statute  under  consideration 
in  Butler  case,  supra. 

CHILD  OF  ADOPTED  CHILD  a  lineal  descendant  of  foster 
parent.  Matter  of  Cook,  187  N.  Y.  253-261,  overruling,  as  to 
this  point,  Matter  of  Fisch,  34  Misc.  146-147. 

WIDOW  OF  ADOPTED  SON  is  a  "widow  of  a  son"  within  the 
meaning  and  intendment  of  those  words  as  used  in  subd.  1  of 
§221a.  Matter  of  Duryea,  128  App.  Div.  205;  Domestic 
Relations  Law,  §  1 14. 

PRIOR  TO  CHAP.  713,  LAW  1887  an  adopted  child  was  not  in 
exempt  class.  Matter  of  Miller,  110  N.  Y.  216. 

ADVANCEMENTS 

Vide  §§  96  and  99  of  Decedent  Estate  Law,  supra,  page  553. 

Advancements  claimed  and  not  allowed  in  Matter  of  Dormit- 
zer,  N.  Y.  Law  Journal,  February  6,  1913,  Surrogate  Cohalan 
saying  in  his  opinion:  "The  alleged  advancement  of  $26,000 
made  by  the  decedent  to  his  son  Walter  was  evidenced  by  a 
certain  promissory  note  dated  July  1,  1908,  and  payable  on 
demand  to  the  order  of  decedent,  with  interest  at  the  rate  of 
5  per  cent,  per  annum.  The  alleged  advancement  of  $30,000  to 
H.  S.  Dormitzer  was  evidenced  by  a  collateral  security  note 
dated  January  1,  1906,  and  payable  on  demand  to  the  decedent, 
with  interest  at  the  rate  of  6  per  cent,  per  annum.  These 
positive  and  unequivocal  evidences  of  indebtedness  to  the 
decedent  cannot  be  construed  into  advancements  by  the  testi- . 
mony  given  before  the  appraiser  to  the  effect  that  the  notes  were ; 
given  to  the  decedent  after  the  loans  or  advancements  had  been 
made  and  without  any  intention  on  the  part  of  the  promissors, 
or  the  decedent  that  the  notes  were  to  constitute  an  acknowledg- 
ment  of  indebtedness. 

'The  beneficiaries  of  the  alleged  advancements  wet*  the- 
only  persons  who  had  knowledge  of  the  negotiations  which: 
culminated  in  their  receiving  from  the  decedent  the  respective* 
sums  of  $26,000  and  $30,000.  Therefore  their  interested  testi- 
mony cannot,  in  view  of  the  promissory  note  of  the  one  and  the 
collateral  security  note  of  the  other,  be  regarded  as  such  a 


ANCILLARY    LETTERS  585 

preponderance  of  evidence,  as  would  justify  the  court  in  holding 
that  the  sums  mentioned  in  the  notes  were  advancements  and 
not  loans  (Matter  of  Bennington,  67  Misc.  363;  Bruce  v. 
Griscom,  9  Hun,  280,  aff'd  70  N.  Y.  612).  Upon  this  point  the 
appeal  is  dismissed." 

Vide  etiam  Matter  of  Bartlett,  4  Misc.  380;  Ebeling  v.  Ebeling, 
61  Misc.  537. 

AGREED  STATEMENT  OF  FACTS 

Vide  Submission  of  Controversy,  post,  page  652. 

AGREEMENT  BETWEEN  PARTIES 

Vide  Matter  of  Cook,  187  N.  Y.  253,  and  cases  cited  sub 
Compromise  of  Claim;  etiam  Antenuptial  Contract;  Gift; 
Partnership. 

ALIEN 

Vide  Residence;  Non-Resident;  Treaty. 

AMENDING  DECREE 

Vide  Vacating  Decree. 

AMENDMENTS 

The  prior  statutes  are  set  forth  supra,  page  403,  and  the 
present  statute,  supra,  page  3. 

Vide  cases  cited  sub  Constitutionality;  Exemptions;  Legisla- 
tive Declaration;  Rates  of  Tax;  Retroactive. 

As  to  when  death  occurs  on  same  day  upon  which  statute  is 
passed  vide  Matter  of  Dreyfous,  18  N.  Y.  Supp.  767;  Matter  of 
Lane,  157  App.  Div.  694-697,  post,  page  809. 

AMERICAN  EXPERIENCE  TABLES 

Vide  supra,  page  580. 

ANCIENT  LAW 

Vide  Matter  of  McPherson,  104  N.  Y.  306-317,  supra, 
page  161. 

ANCILLARY  LETTERS 

Vide  §  228,  supra,  page  13. 

Issuance  of  ancillary  letters  is  not  necessary.  Matter  of 
Fitch,  160  N.  Y.  87,  supra,  page  231. 


586  ANNUITIES 

ANNUITIES 

(1)  Value  of  annuity.  (4)  Annuity    to    executor    and 

(2)  Theoretical  not  actual  value.  trustee. 

(3)  Where  will  directs  purchase  of          (5)  Tax  on,  payable  forthwith. 

annuity.  (6)  Reservation    of    annuity    to 

grantor. 
Vide  Life  Estate. 

(1)  Value  of  annuity 

The  value  of  an  annuity  is  determined  by  the  superintendent 
of  insurance  "by  the  rule,  method  and  standard  of  mortality 
and  value  employed"  by  him  "in  ascertaining  the  value  of 
policies  of  life  insurance  and  annuities  for  the  determination  of 
liabilities  of  life  insurance  companies,  except  that  the  rate  of 
interest  for  making  such  computation  shall  be  five  per  centum 
per  annum."  Third  paragraph  of  section  230.  The  practice 
is  for  the  superintendent  of  insurance  to  make  this  calculation  of 
value  on  the  application  of  the  surrogate.  Section  231.  In 
estates  where  there  are  annuities,  the  age  of  the  annuitant  at  the 
death  of  the  testator  should  be  set  forth  in  the  papers  filed  with 
the  appraiser. 

As  to  tables  used  by  superintendent  of  insurance  vide  supra, 
page  580. 

(2)  Theoretical  not  actual  value 

In  Matter  of  Hall,  36  Misc.  618  (1901),  testator,  who  died  in 
1889,  left  a  life  estate  to  his  widow  which  life  estate  was  not 
taxed  until  her  death  in  1900.  He  provided  in  his  will  that  if 
the  life  estate  was  not  sufficient  to  pay  a  certain  fixed  sum  that 
the  trustees  should  have  power  to  invade  the  principal  so  as  to 
bring  the  yearly  income  up  to  the  sum  designated  by  the 
testator.  Surrogate  Thomas  in  his  opinion  said:  "The  widow 
was  sixty-nine  years  of  age  at  the  death  of  her  husband,  and  at 
that  time  her  chance  of  life  was  less  than  six  years.  She  actually 
survived  him  about  twice  as  long  as  that.  The  statute  of  1887 
(chap.  713)  required  a  life  estate  sought  to  be  taxed  to  be  ap- 
praised on  this  theory,  notwithstanding  it  resulted  in  error 
(Matter  of  Jones,  28  Misc.  Rep.  356),  but  I  do  not  find  myself 
bound  in  this  way  in  estimating  the  value  of  a  legacy,  now  just 
due,  and  the  actual  value  of  which  now  appears  without  con- 
tradiction and  is  fixed  by  a  decree.  If  the  widow  had  lived  long 
enough  the  estate  would  have  been  entirely  consumed  by  her 
annuity,  and  a  ruling  which  would  require  a  tax  to  be  imposed 


ANNUITIES  587 

against  the  residuary  legatees,  even  if  they  had  never  been 
entitled  to  any  sum  whatever,  should  be  avoided.  *  *  *  The 
valuations  of  the  legacies  now  sought  to  be  taxed  as  of  the  date 
of  the  death  of  the  testator  should  be  computed  from  the 
amounts  adjudged  in  the  decree  on  the  final  accounting  as  being 
their  value  at  the  date  of  the  decree." 

Matter  of  Jones,  supra,  affirmed  172  N.  Y.  575,  and  Matter  of 
White,  208  N.  Y.  64,  both  held  that  the  value  of  a  life  estate,  for 
transfer  tax  purposes,  is  the  theoretical  one  to  be  calculated  by 
the  superintendent  of  insurance  under  the  provisions  of  section 
230  and  not  the  value  based  upon  the  actual  duration  of  the 
life  of  the  life  tenant. 

The  first  sentence  of  section  243  was  amended  by  chapter  706, 
Laws  of  1910,  in  effect  July  11,  1910,  to  read:  "The  words 
'estate'  and  'property'  as  used  in  this  article,  shall  be  taken  to 
mean  the  property  or  interest  therein  passing  or  transferred  to 
individual  or  corporate  legatees,  devisees,  heirs,  next  of  kin, 
grantees,  donees  or  vendees,  and  not  as  the  property  or  interest 
therein  of  the  decedent,  grantor,  donor  or  vendor."  In  Matter 
of  White,  supra,  the  testatrix  died  March  2,  1908.  The  first 
sentence  of  section  243  in  force  at  her  death  read  as  follows: 
"The  words  'estate'  and  'property,'  as  used  in  this  article, 
shall  be  taken  to  mean  the  property  or  interest  therein  of  the 
testator,  intestate,  grantor,  bargainer  or  vendor,  passing  or 
transferred  to  those  not  herein  specifically  exempted  from  the 
provisions  of  this  article,  and  not  as  the  property  or  interest 
therein  passing  or  transferred  to  individual  legatees,  devisees, 
heirs,  next  of  kin,  grantees,  donees  or  vendees."  Chap.  368, 
Laws  of  1905. 

The  legislature  did  not  amend  section  222,  that  section 
providing,  inter  alia:  "Taxes  upon  the  transfer  of  any  estate, 
property  or  interest  therein  limited,  conditioned,  dependent 
or  determinable  upon  the  happening  of  any  contingency  or 
future  event  by  reason  of  which  the  fair  market  value  thereof 
cannot  be  ascertained  at  the  time  of  the  transfer  as  herein  pro- 
vided, shall  accrue  and  become  due  and  payable  when  the 
persons  or  corporations  beneficially  entitled  thereto  shall  come 
into  actual  possession  or  enjoyment  thereof." 

It  may  be  that  the  Legislature  in  amending  section  243  in- 
tended to  return  to  the  former  principle  that  the  law  should 
not  "  tax  a  theory  having  no  real  substance  behind  it,"  and 
designedly  intended  to  avoid  the  taxation  of  a  transfer  "theoret- 


588  ANNUITIES 

ically  only  an  unsubstantial  legal  fabric."    Matter  of  Curtis, 

142  N.  Y.  219-223. 

It  is  the  practice,  however,  to  tax  upon  the  basis  of  the  theo- 
retical and  not  the  actual  duration  of  life.  Vide  opinion  of 
state  comptroller,  dated  May  19,  1913,  in  Matter  of  Peter  D. 
Sidney,  Schoharie  County,  2  State  Department  Reports,  505. 

Prior  to  the  amendment  by  chapter  76  of  the  Laws  of  1899, 
in  effect  March  14,  1899,  it  was  held  in  Matter  of  Roosevelt, 

143  N.  Y.  120,  that  the  interests  of  annuitants  and  remainder- 
men were  not  liable  to  pay  presently  the  inheritance  tax  when 
the  annuitants  and  remaindermen  "represent  estates  or  inter- 
ests, unvested  and  contingent,  which,  taken  in  connection  with 
the  life  estate  of  the"  life  tenant,  render  the  present  value  of  the 
ultimate  remainders  unascertainable. 

Where  there  is  a  life  estate  subject  to  annuities,  there  should 
be  deducted  from  the  present  value  of  the  life  estate  the  present 
value  of  the  annuities  as  arrived  at  by  superintendent  of  in- 
surance under  §  230,  and  not  the  actual  amount  of  principal 
necessary  to  produce  the  annuities  at  five  per  cent  per  annum. 
Matter  of  Maresi,  74  App.  Div.  76-78. 

(3)  Where  will  directs  purchase  of  annuity 

Where,  however,  the  will  directs  that  annuities  be  purchased 
from  life  insurance  companies  the  actual  cost  of  the  annuities 
determines  the  amount  taxable,  and  not  the  value  of  the 
annuities  as  certified  by  the  superintendent  of  insurance  under 
§  230.  Matter  of  Hutchinson,  105  App.  Div.  487. 

(4)  Annuity  to  executor  and  trustee 

Annuity  to  executor  and  trustee  in  addition  to  the  commis- 
sions allowed  by  law  held  taxable  under  §  226,  although  it  was 
to  be  "in  full  compensation  for  any  and  all  services,  legal  or 
otherwise,  which  he  shall  render  my  estate."  Matter  of  Huber, 
86  App.  Div.  458. 

(6)  Tax  on,  payable  forthwith 

Tax  on  annuity  is  payable  forthwith  out  of  the  fund  set  aside 
for  creating  the  annuity,  and  the  tax  so  paid  is  restored  to  the 
fund  by  deducting  from  the  periodical  payments  to  the  annuitant 
the  proportionate  part  of  such  tax  to  be  calculated  by  dividing 
the  tax  .by  the  number  of  years  the  annuity  will  continue  as 
determined  by  the  superintendent  of  insurance  under  §  230. 
Matter  of  Tracy,  179  N.  Y.  501-510. 


ANTE-NUPTIAL   CONTRACT  589 

(6)  Reservation  of  annuity  to  grantor 

Held  not  necessarily  to  make  transfer  taxable.  Matter  of 
Edgerton,  35  App.  Div.  125,  affirmed,  without  opinion,  158 
N.  Y.  671.  Vide  Gift  and  Trust  Deed. 

ANTE-NUPTIAL  CONTRACT 

A  transfer  of  property  by  an  ante-nuptial  agreement  is  not 
taxable  upon  the  theory  that  it  is  a  contract  made  for  the 
transfer  of  property  in  "  contemplation  of  death"  within  the 
meaning  of  those  words  as  used  in  subdivision  4  of  section  220. 
As  was  said  in  Matter  of  Baker,  83  App.  Div.  530-534,  affirmed, 
on  opinion  below,  178  N.  Y.  575,  such  a  contract  is  entered  into 
"in  contemplation  of  life"  rather  than  of  death.  Vide  etiam 
Matter  of  Craig,  97  App.  Div.  289-295,  affirmed,  on  opinion 
below,  181  N.  Y.  551. 

Where  no  express  ante-nuptial  contract,  transfer  taxable. 
Matter  of  Majot,  199  N.  Y.  29. 

Ante-nuptial  agreement  to  make  will  in  favor  of  person  does 
not  make  the  transfer  of  property  by  will  exempt  from  tax. 
Matter  of  Kidd,  188  N.  Y.  274. 

Surrogate  Heaton  of  Rensselaer  County  in  Matter  of  Demers, 
41  Misc.  470,  where  decedent  in  1862  had  agreed  that  "upon  his 
death  the  property  he  should  have  should  belong  to  "  a  natural 
daughter,  held  that  as  the  supreme  court  had  decreed  a  specific 
performance  of  the  contract,  the  appraiser  was  wrong  in  fixing 
a  tax  in  decedent's  estate. 

It  is  difficult  to  reconcile  the  reasoning  of  these  two  cases;  the 
Demers  case,  which  was  decided  in  1903,  follows  the  logic  of  the 
Appellate  Division  opinion  (1906),  115  App.  Div.  205,  which  was 
overruled  in  188  N.  Y.  274.  A  distinction  may  be  drawn,  how- 
ever, because  in  the  Kidd  case  the  agreement  was  to  leave  the 
property  by  will,  while  in  the  Demers  case  the  agreement  was, 
the  opinion  states,  that  "upon  his  death  the  property  he  should 
have  should  belong  to  such  child."  It  will  be  remembered  that 
in  both  cases  the  agreement  was  made  prior  to  the  first  inherit- 
ance tax  statute  of  1885. 

Where  the  day  after  making  ante-nuptial  contract  the  par- 
ties entered  into  another  agreement,  it  is  to  be  presumed,  in  the 
absence  of  proof  to  the  contrary,  that  the  ante-nuptial  contract 
was  executed  and  the  property  set  forth  in  it  delivered  on  its 
date.  Matter  of  Miller,  77  App.  Div.  473, 


590  ANTIQUES 

ANTIQUES 

Vide  §  2216  supra,  page  43,  as  to  when  exempt. 
Antiques  should  be  set  forth  hi  Schedule  A3  and  appraisal 
by  expert  should  be  furnished,  vide  supra,  page  108. 

APPEAL 

(1)  To  Surrogate.  (4)  To    United    States    Supreme 

(2)  To  Appellate  Division.  Court. 

(3)  To  Court  of  Appeals. 

Vide  Vacating  Decree. 

When  those  directly  concerned  acquiesce  and  do  not  appeal, 
executors  or  administrators  have  no  authority  to  take  appeal. 
Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218-222.  Contra  Mat- 
ter of  Cornell,  66  App.  Div.  162-171,  modified  on  other  points, 
170  N.  Y.  423. 

Accepting  payment  does  not  estop  comptroller  from  appeal- 
ing. Matter  of  Bogert,  25  Misc.  466.  Vide  Payment  of  Tax. 

Limited  to  review  of  part  appealed  from,  as  stated  hi  notice  of 
appeal  to  surrogate  under  §  232.  Matter  of  Davis,  149  N.  Y. 
539;  Matter  of  Manning,  169  N.  Y.  449;  Matter  of  Cook,  194 
N.  Y.  400;  Matter  of  Wormser,  51  App.  Div.  441-445;  Matter 
of  Kennedy,  93  App.  Div.  27-30. 

Appeal  dismissed  because  notice  of  appeal  did  not  state  the 
grounds  of  appeal.  Matter  of  Stone,  56  Misc.  247. 

In  Matter  of  Westurn,  152  N.  Y.  93-104,  the  Court  say: 
"We  think  the  statute  ought  to  be  construed  so  as  to  permit 
the  raising  upon  an  appeal,  of  a  question  which  did  not  enter 
into  the  original  determination,  and  which  was  first  made  known 
after  the  appeal  had  been  taken,  and  after  the  expiration  of  the 
sixty  days.  The  surrogate  had  jurisdiction  of  the  appeal  by 
the  notice  actually  given,  and  it  would  be  an  unwise  construc- 
tion of  the  act  to  limit  the  hearing  so  as  to  exclude  the  consid- 
eration of  a  new  question  subsequently  arising,  on  the  ground 
that  it  was  not  specified  in  the  notice  of  appeal."  As  to  modi- 
fication of  decree  by  surrogate  under  powers  conferred  upon 
him  by  provisions  of  subd.  6  of  §  2481  of  Code  of  Civil  Procedure 
vide  cases  cited  sub  Vacating  Decree. 

(1)  To  Surrogate 

The  surrogate  makes  an  order  under  §  231  "as  of  course," 
and  under  §  232  an  appeal  is  taken  to  the  surrogate  from  his 


APPEAL  591 

own  order.  In  other  words,  an  appeal  is  taken  from  the  sur- 
rogate acting  as  a  taxing  officer  to  the  surrogate  acting  in  his 
judicial  capacity.  Matter  of  Costello,  189  N.  Y.  288-290. 

Notice  of  appeal  to  surrogate  under  §  232  must  be  filed  in  the 
office  of  the  surrogate  within  sixty  days  from  the  fixing,  as- 
sessing and  determination  of  the  tax.  "The  admission  of  serv- 
ice of  the  notice  of  appeal  by  the  attorney  of  the  State  Comp- 
troller cannot  be  accepted  as  waiver  of  the  default  in  appealing, 
for  the  validity  of  the  appeal  depended  not  upon  service  of 
notice  thereof  upon  the  attorney,  but  upon  timely  filing  of 
the  notice  in  the  surrogate's  office."  Matter  of  Seymour, 
144  App.  Div.  151-152.  Vide  §  784  of  Code  of  Civil  Pro- 
cedure. 

Appeal  must  be  taken  within  the  sixty-day  period  of  §  232 
although  the  surrogate  has  not  performed  his  statutory  duty 
under '§  231  of  giving  notice  of  the  tax.  Matter  of  Connelly,  38 
Misc.  466^70. 

It  is  the  practice,  at  times,  for  the  surrogate  not  to  make  the 
pro  forma  order  under  §  231  but  to  remit  the  report  of  the  ap- 
praiser back  to  him  for  additional  proof,  and  he  can  do  this 
although  point  raised  that  objections  to  report  can  only  be 
taken  on  appeal  from  pro  forma  order.  Matter  of  Kelly,  29 
Misc.  169-170.  Vide  Surrogate,  post,  page  848. 

Surrogate  may  take  new  testimony  upon  appeal  from  his 
pro  forma  order.  Matter  of  Westurn,  152  N.  Y.  93-104;  Matter 
of  Thompson,  57  App.  Div.  317;  Matter  of  Bentley,  31  Misc. 
656-657;  Matter  of  Gibbs,  60  Misc.  645. 

Rehearing  refused  where  on  appeal  from  pro  forma  order,  the 
comptroller  fails  to  show  that  he  can  produce  any  evidence 
which  will  bring  about  any  different  result.  Matter  of  Johnson, 
37  Misc.  542. 

Where  an  error  of  law  is  claimed  to  have  been  committed 
the  remedy  is  not  an  application  to  Supreme  Court  for  a  reap- 
praisal under  §  232,  but  an  appeal  to  the  surrogate  under  the 
same  section.  Matter  of  Niven,  29  Misc.  550. 

Surrogate's  decree  final  and  conclusive  upon  all  questions, 
both  of  law  and  fact,  presented  to  him  for  adjudication  unless 
an  appeal  is  taken.  Matter  of  Wolfe,  137  N.  Y.  205;  Matter  of 
Lansing,  31  Misc.  148-154;  Matter  of  Crerar,  56  App.  Div.  479. 
The  adjudication  of  the  surrogate  in  a  transfer  tax  proceeding 
is  "binding  upon  the  question  of  taxation  only."  Amherst 
College  v.  Ritch,  151  N.  Y.  332-343. 


502  APPEAL 

(2)  To  Appellate  Division 

An  appeal  may  be  taken  under  §  2570  of  Code  of  Civil  Pro- 
cedure from  order  involving  a  substantial  right.  Morgan  v. 
Warner,  162  N.  Y.  612;  Matter  of  Hull,  109  App.  Div.  248-250. 

Appeal  direct  to  Appellate  Division  from  order  of  surrogate 
made  "as  of  course"  under  §  231  is  not  proper;  the  appeal  to 
Appellate  Division  can  be  taken  only  from  the  order  of  the  sur- 
rogate made  after  the  appeal  to  him  under  §  232.  Matter  of  Cos- 
tello,  189  N.  Y.  288-291;  Matter  of  Victor,  159  App.  Div.  000. 

By  §  2572  of  Code  appeal  to  Appellate  Division  must  be  taken 
within  thirty  days  after  the  service  of  a  copy  of  order,  and 
notice  of  entry  thereof.  If  appeal  is  taken  by  a  person  who  was 
not  a  party,  it  must  be  taken  within  three  months  after  the 
entry  of  the  order.  Matter  of  Dingman,  66  App.  Div.  228-231. 

If  order  is  silent  as  to  grounds  on  which  it  is  made,  it  is  pre- 
sumed to  reverse  surrogate  on  question  of  law  only.  Matter  of 
Davis,  184  N.  Y.  299. 

Discretion  of  surrogate  in  refusing  to  resettle  his  order,  will 
not  be  reviewed  by  Appellate  Division  as  "  it  is  not  for  this  court 
to  direct  or  control  him  in  the  exercise  of  his  discretion."  Mat- 
ter of  Sondheim,  69  App.  Div.  5. 

IN  MATTER  OF  CAROLINE  W.  ASTOR  the  surrogate  remitted 
the  report  to  the  appraiser  for  further  information.  The  execu- 
tors of  the  estate  appealed  from  the  order  remitting  the  report. 
The  attorneys  for  the  estate  argued  that  the  surrogate  had  no 
power  to  remit  the  report,  while  the  attorney  for  the  comptroller 
contended  that  the  order  was  not  appealable  under  §  2570 
of  the  Code  of  Civil  Procedure.  The  appeal  was  dismissed,  137 
App.  Div.  922.  Opinion  of  surrogate  quoted,  supra,  page  107. 

(3)  To  Court  of  Appeals 

If  the  order  of  the  Appellate  Division  does  not  recite  that  the 
reversal  was  upon  the  facts  then  the  Court  of  Appeals  will  as- 
sume that  the  reversal  was  made  solely  on  the  law,  and  the  facts 
as  found  below  will  be  undisturbed  provided  there  is  any  evi- 
dence to  support  them.  Matter  of  Brandreth,  169  N.  Y,  437- 
440;  §  1338  of  Code  of  Civil  Procedure. 

In  Matter  of  Thayer,  193  N.  Y.  430-433,  the  court  say:  "The 
valuation  of  the  stock  is  a  question  of  fact.  The  decision  of  the 
surrogate  on  this  question  of  fact  has  been  unanimously  af- 
firmed by  the  Appellate  Division,  and,  as  it  involves  no  error 
of  law,  it  is  conclusive  in  this  court." 


APPORTIONMENT    OF    PROPERTY  593 

Limited  to  a  review  of  questions  of  law  only.  Matter  of 
Thorne,  162  N.  Y.  238;  Matter  of  Mahlstedt,  171  N.  Y.  652; 
Code  of  Civil  Procedure,  §§  191,  1337. 

Dismissed  where  not  from  final  order.  Matter  of  Bishop, 
188  N.  Y.  635;  Matter  of  Browne,  195  id.  522;  Matter  of  Vivanti, 
200  id.  513.  Code,  subdv.  1,  §  190. 

Where  matter  rested  with  discretion  of  surrogate  the  Court  of 
Appeals  will  not  interfere.  Matter  of  Cornell,  172  N.  Y.  423- 
426,  supra,  page  259. 

(4)  To  United  States  Supreme  Court. 

A  right  under  the  United  States  Constitution  must  be  spe- 
cially set  up  and  claimed,  §  709,  U.  S.  Rev.  Statutes.  Matter 
of  Houdayer,  150  N.  Y.  37,  writ  of  error  dismissed  in  175  U.  S. 
32,  sub  nom.  Scudder  v.  Comptroller;  Matter  of  Tilt,  182  N.  Y. 
557,  reversed  in  207  U.  S.  43,  sub  nom.  Tilt  v.  Kelsey;  Matter 
of  Stickney,  185  N.  Y.  107,  writ  of  error  dismissed  in  209  U.  S. 
419,  sub  nom.  Stickney  v.  Kelsey. 

APPOINTMENT 

Vide  Power  of  Appointment. 

APPORTIONMENT  OF  PROPERTY 

(1)  Of  corporations.  (3)  Decisions     relative     to     life 

(2)  Of  decedent's  assets.  tenant  and  remaindermen. 

(1)  Of  corporations 

Will  be  made  of  property  of  corporation  incorporated  in 
New  York  and  other  states  in  estates  of  non-residents.  Matter 
of  Cooley,  186  N.  Y.  220;  Matter  of  Thayer,  193  N.  Y.  430. 

Also  as  to  joint  stock  associations.  Matter  of  Willmer,  153 
App.  Div.  804. 

Will  not  be  made  of  New  York  corporations.  Matter  of 
Palmer,  183  N.  Y.  238. 

These  decisions  were  all  rendered  prior  to  chap.  732,  laws 
1911,  in  effect  July  21,  1911,  which  so  amended  sections  220 
and  243  as  to  make  stock  held  by  non-resident  decedent  not 
taxable. 

(2)  Of  decedent's  assets 

Sections  2712  and  2720  of  Code  of  Civil  Procedure  deal  with 
the  question  as  to  what  shall  be  deemed  assets  of  the  estate. 
Dividends  declared  before  death  pf  decedent  but  payable 
38 


594  APPRAISAL 

after  are  part  of  decedent's  estate.    Matter  of  Kernochan,  104 
N.  Y.  618. 

A  dividend  declared  before  death  but  made  payable  to  stock- 
holders of  record  at  a  date  subsequent  to  death  of  decedent 
raises  a  question  which  does  not  seem  to  have  been  passed  upon. 

(3)  Decisions  relative  to  life  tenant  and  remaindermen 

For  decisions  as  to  apportionment  of  dividends  between  life 
tenant  and  remainderman  vide  Robertson  v.  de  Brulatour,  188 
N.  Y.  301;  Thayer  v.  Burr,  201  N.  Y.  155;  Matter  of  Harteau, 
204  N.  Y.  292;  Matter  of  Osborne,  153  App.  Div.  312;  Matter  of 
Cooper,  82  Misc.  324. 

APPRAISAL 

(1)  Time  of  appraisal.  (4)  Cannot   make   appraisal   on 

(2)  Actual  sale.  suspicion. 

(3)  State  entitled  to  appraisal.  (5)  Each  trust  estate  should  be 

separately  appraised. 

The  subject  of  appraisal  of  an  estate  is  discussed,  supra, 
page  82.  Vide  etiam  Reappraisal  post,  page  814. 

(1)  Time  of  appraisal 

The  transfer  tax  proceeeding  need  not  be  taken  immediately 
after  death.  The  court  in  Matter  of  Westurn,  152  N.  Y. 
93-101  said  that  it  would  be  prudent  to  defer  the  appraisal 
''for  the  period  necessary  to  enable  the  executor  or  administra- 
tor to  advertise  for  claims." 

But  it  is  not  necessary  to  wait  for  a  final  accounting.  Matter 
of  Vassar,  127  N.  Y.  1-8. 

The  practice  varies,  but  it  is  evident  that  the  appraisal  should 
be  deferred  until  the  assets  and  liabilities  of  the  estate  are 
marshalled  by  the  representatives  of  the  estate.  Otherwise 
delay  and  trouble  are  caused  by  reason  of  the  representatives 
of  the  estate  not  being  able  to  make  a  clear  statement  as  to 
the  condition  of  the  estate. 

For  discount  and  interest  provisions  of  section  223  vide 
Payment  of  Tax. 

In  Matter  of  Jones,  54  Misc.  202  (1907)  the  testator  died  in 
1888,  but  transfer  tax  proceedings  were  not  taken  until  1898. 
Over  eight  years  after  the  order  was  made  assessing  the  tax,  a 
motion  was  made  to  set  aside  the  order  "  because  the  proceeding 
to  tax  was  not  instituted  immediately,  or  within  a  reasonable 


APPRAISER  595 

time,  after  the  death  of  decedent."    The  surrogate  denied  the 
motion. 

(2)  Actual  Sale 

ACTUAL  SALE  at  best  obtainable  price  overcomes  appraisal 
by  expert.  Matter  of  Arnold,  114  App.  Div.  244. 

AFTER  APPRAISAL  and  decree  entered,  subsequent  sale  at  a 
sum  less  than  appraised  value  will  not  justify  surrogate  in 
modifying  decree  to  conform  with  the  sale  price.  Matter  of 
Lowry,  89  App.  Div.  226;  Matter  of  Meyer,  209  N.  Y.  386,  and 
other  cases  cited  Vacating  Decree,  page  878. 

(3)  State  entitled  to  appraisal 

Surrogate  gave  his  opinion  that  estate  was  not  liable  to  taxa- 
tion, but  entered  no  order.  Several  years  later  the  comptroller 
applied  for  an  appraisal,  and  the  surrogate  held,  "  that  no 
official  appraisal  has  ever  been  made  and  it  is  to  this  that  the 
state  is  entitled  whether  the  result  shows  a  tax  due  or  not." 
Matter  of  Schmidt,  39  Misc.  77. 

APPRAISAL  MAY  BE  COMPELLED  by  mandamus  against  surro- 
gate. Matter  of  Kelsey  v.  Church,  112  App.  Div.  408. 

(4)  Cannot  make  appraisal  on  suspicion 

"Any  apparent  attempt  upon  the  part  of  the  executors  to 
evade  the  payment  of  a  just  tax,  however  reprehensible  it  may 
be,  does  not  authorize  either  the  appraiser  or  the  surrogate  to 
make  an  assessment  upon  suspicion  or  otherwise  than  upon 
convincing  evidence  of  the  transfer  of  property  for  which  the 
tax  is  imposed  by  the  statute."  If  the  witnesses  refuse  to 
answer  material  questions  the  proper  remedy  is  to  make  applica- 
tion to  surrogate  to  punish  for  contempt.  Matter  of  David 
Kennedy,  113  App.  Div.  4-8. 

(5)  Each  trust  estate  should  be  separately  appraised 
Matter  of  Vanderbilt,  172  N.  Y.  69-73. 

APPRAISER 

(1)  Functions  of  an  appraiser.  (3)  Supreme  court  may  appoint. 

(2)  Report  of  appraiser. 

COUNTY  TREASURER  acts  as  appraiser  (section  230)  except 
in  the  seventeen  counties  of  Albany,  Bronx,  Dutchess,  Erie, 
Kings,  Monroe,  Nassau,  New  York,  Niagara,  Oneida,  Onon- 


590  APPRAISER 

daga,  Orange,  Queens,  Rensselaer,  Richmond,  Suffolk  and  West- 
chester.  Section  229. 

Section  230  provides  that  "the  surrogate,  either  upon  his 
own  motion  or  upon  the  application  of  any  interested  person, 
including  the  state  comptroller,  shall  by  order  direct  the  person 
or  one  of  the  persons  appointed  pursuant  to  section  229  of  this 
article  in  counties  in  which  the  office  of  appraiser  is  salaried  and 
in  other  counties,  the  county  treasurer,  to  fix  the  fair  market 
value  of  property  of  persons  whose  estates  shall  be  subject  to  the 
payment  of  any  tax  imposed  by  this  article." 

DUTIES  of  an  appraiser  as  defined  by  statute,  vide  page  82. 

The  surrogate  may  himself  act  without  appointing  an  ap- 
praiser, section  231  stating  that  the  surrogate  may  "determine 
the  cash  value  of  all  such  estates  and  the  amount  of  tax  to  which 
the  same  are  liable,  without  appointing  an  appraiser." 

In  subdivision  7  of  section  220  the  statute  uses  neither  the 
words  "fair  market  value"  of  section  230  nor  "cash  value"  the 
language  of  section  231.  It  reads:  "The  tax  imposed  hereby 
shall  be  upon  the  clear  market  value  of  such  property,  at  the 
rates  hereinafter  prescribed."  It  would  seem  that  the  legisla- 
ture did  not  intend  that  the  words  "clear  market  value," 
"fair  market  value,"  and  "cash  value"  should  be  other  than 
synonymous. 

Surrogate  "  upon  his  own  motion,"  may  under  §  230,  appoint 
an  appraiser.  Matter  of  O'Donohue,  44  App.  Div.  186;  Matter 
of  Lansing,  31  Misc.  148-149. 

Appraiser  cannot  be  designated  by  surrogate  in  counties  set 
forth  in  section  229  unless  he  is  one  of  the  appraisers  appointed 
by  the  state  comptroller.  Matter  of  Sondheim,  32  Misc.  296, 
affirmed,  69  App.  Div.  5.  The  comptroller  may  at  pleasure  re- 
move an  appraiser.  People  ex  rel.  McNeile  v.  Glynn,  128 
App.  Div.  257;  People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35. 
The  position  of  appraiser  is  not  under  civil  service.  Matter  of 
Weeks  v.  Kraft,  147  App.  Div.  403. 

(1)  Functions  of  an  appraiser 

"He  must  have  a  knowledge  of  trusts  and  of  wills,  and 
devises  and  bequests,  and  of  the  descent  and  distribution  of 
property  of  decedents.  He  must  be  an  expert  upon  the  value 
of  stocks  and  bonds  and  personal  property  in  general.  He  must 
be  capable  of  ascertaining  the  value  of  real  property  and  of 
conducting  examinations  and  deciding  questions  of  fact  as  to 


APPRAISER  597 

residence,  relationship  and  the  like."  Matter  of  Weeks  v. 
Kraft,  147  App.  Div.  403^10. 

In  Matter  of  Barnes,  N.  Y.  Law  Journal,  December  17,  1913, 
Surrogate  Fowler  said,  inter  alia: 

"The  practice  adopted  by  the  appraisers  in  the  appraisal  of 
estates  has  always  been  in  accordance  with  the  assumption 
that  the  statute  gave  them  jurisdiction,  in  the  first  instance,  to 
pass  upon  all  questions  arising  in  connection  with  the  ascer- 
tainment of  the  value  of  taxable  interests  of  a  resident  citizen 
of  the  State.  This  appears  a  rational  and  orderly  construction 
of  the  statute,  if  we  have  regard  to  the  adjudicated  cases.  In 
the  Matter  of  Kelsey  y.  Church,  112  App.  Div.  408,  it  was  said 
that  the  facts  concerning  the  taxability  of  an  estate  do  not 
have  to  be  established  before  an  appraiser  is  appointed,  and  the 
surrogate  cannot  wait  before  appointing  an  appraiser  in  order 
to  judicially  determine  whether  the  estate  is  subject  to  taxation. 
From  this  it  may  be  inferred  that  the  question  whether  the 
property  is  or  is  not  subject  to  taxation,  is  to  be  determined, 
in  the  first  instance,  by  the  appraiser  who  has  been  duly  ap- 
pointed by  the  surrogate  for  that  purpose.  In  Matter  of  Ken- 
nedy, 113  App.  Div.  4,  it  appeared  that  the  decedent  had  about 
$700,000  a  few  years  before  his  death.  His  executors  were  in- 
terrogated by  the  appraiser  as  to  this  property  and  they  refused 
to  answer.  It  was  assessed  as  a  part  of  his  estate;  an  appeal 
was  taken  to  the  Appellate  Division,  and  it  was  said  by  that 
court  that  the  executors  who  refused  to  answer  were  contuma- 
cious and  could  be  punished  for  contempt.  If  they  could  be 
punished  for  refusing  to  answer  questions  put  to  them  by  the 
appraiser  in  regard  to  property  which  a  deceased  resident  was 
alleged  to  have  possessed  several  years  before  his  death,  the 
appraiser  must  have  had  jurisdiction  to  ask  the  questions,  be- 
cause if  there  was  no  jurisdiction  on  the  part  of  the  appraiser 
to  make  the  inquiry  there  could  be  no  contempt  on  the  part  of 
the  witnesses  who  refused  to  answer  the  extrajudicial  ques- 
tions. In  Matter  of  Ullmann,  137  N.  Y.  407,  it  was  said  that 
'every  officer  charged  with  the  duty  of  executing  the  taxing 
power,  whether  it  be  a  surrogate  or  a  town  assessor,  must  neces- 
sarily decide  in  a  judicial  capacity  important  questions  of  law  in 
order  to  perform  the  duties  of  his  office.'  This  language  is  broad 
enough  to  include  the  appraiser  as  well  as  the  surrogate.  And 
in  Matter  of  Costello,  189  N.  Y.  288,  it  was  held  that  an  appeal 
would  not  lie  to  the  Appellate  Division  from  the  formal  order 


598  APPRAISER 

entered  upon  the  appraiser's  report,  but  that  an  appeal  should 
first  be  taken  to  the  surrogate  acting  judicially.     *     *     * 

"  It  is  alleged  that  the  transfer  tax  appraiser  always  acts  as  a 
representative  of  the  State  Comptroller  rather  than  as  a  dis- 
interested arbiter.  This,  if  true,  is  a  violation  of  the  obligations 
of  the  appraiser  and  not  contemplated  by  the  act.  AN  AP- 
PRAISER SHOULD  DECIDE  WITH  ENTIRE  IMPARTIALITY  THE  QUES- 
TIONS ARISING  BEFORE  HIM,  WHETHER  OF  LAW  OR  OF  FACT  OR 
MIXED  QUESTIONS  OF  LAW  AND  FACT. 

"The  State  Comptroller  is  only  one  of  the  parties  to  the 
proceeding  before  the  appraiser,  and  is  entitled  to  no  more  con- 
sideration than  the  representatives  of  the  estate.  An  error  of 
the  appraiser  in  this  regard  cannot  enter  into  the  construction 
of  the  statute.  The  surrogate  may  always  correct  such  errors, 
if  duly  advised." 

"The  powers  and  duties  of  the  tax  appraisers  are  of  a  quasi 
judicial  character.  They  call  for  the  exercise  of  sound  judgment, 
discretion  and  knowledge  of  legal  principles.  They  demand 
upon  the  part  of  the  incumbent  an  understanding  of  statutory 
provisions  and  ability  to  pass  upon  complicated  questions  of 
law. 

"The  appraiser  has  power  to  issue  subpoenas  and  compel 
the  attendance  of  witnesses.  His  powers  and  acts  partake  of 
the  nature  of  the  acts,  powers  and  duties  of  commissioners 
appointed  by  the  court  in  condemnation  proceedings  and  of 
referees  appointed  by  the  court  to  hear,  try  and  determine  the 
issues  in  actions,  or  to  take  proof  in  actions  and  report  the  same 
to  the  court  with  their  opinion  thereon.  The  office  is  in  no 
sense  a  subordinate  position;  and  the  comptroller  who  appoints 
the  appraiser  has  no  power  to  review  his  acts,  or  in  any  way 
control  them.  The  only  right  to  review  his  acts  is  vested,  by 
statute,  in  the  surrogate  of  the  county  in  and  for  which  the 
appraiser  is  appointed.  The  office  is  not  a  position  in  the 
comptroller's  nor  in  the  surrogate's  office,  but  is  an  independent 
office,  separate  and  distinct  from  any  other."  People  ex  rel. 
McKnight  v.  Glynn,  56  Misc.  35-39.  Vide  etiam,  Matter  of 
Ullmann,  137  N.  Y.  403-407,  supra,  page  181. 

"The  appraiser  has  no  power  to  determine  the  domicile  of 
the  decedent."  Matter  of  Grant,  N.  Y.  Law  Journal,  Novem- 
ber 14,  1913,  opinion  quoted,  post,  page  833. 

"Some  of  the  functions  of  a  taxing  officer  are  ministerial, 
but  it  is  well  established  by  authority  that  in  determining  the 


APPRAISER  599 

value  of  the  property  assessed,  the  extent  of  claims  to  exemption, 
etc.,  the  taxing  officer  or  board  acts  judicially."  Matter  of 
Hull,  109  App.  Div.  248. 

"Function  of  an  appraiser  is  somewhat  similar  to  that  of  a 
jury  called  by  the  court  in  an  equity  case  to  aid  its  conscience. 
The  whole  matter  is  with  the  surrogate  and  continues  with  him 
until  final  determination  after  appeal."  Matter  of  Thompson, 
57  App.  Div.  317-319. 

Must  rule  on  admission  of  testimony.  Morgan  v.  Warner, 
45  App.  Div.  424-427,  affirmed,  on  opinion  below,  162  N.  Y. 
612.  Vide  cases  cited  sub  Testimony. 

May  construe  will.  Matter  of  Cager,  111  N.  Y.  343-347; 
Matter  of  Ullmann,  137  N.  Y.  403;  Matter  of  Curtis,  142 
N.  Y.  219;  Matter  of  Kimberly,  150  N.  Y.  90;  Matter  of  Bur- 
gess, 204  N.  Y.  265;  Matter  of  Lynn,  34  Misc.  681;  Matter  of 
Peters,  69  App.  Div.  465. 

(2)  Report  of  appraiser 

Report  of  appraiser  may  be  remitted  back  for  the  purpose 
of  obtaining  additional  proof.  Matter  of  Kelly,  29  Misc.  169- 
170. 

Order  remitting  report  for  additional  evidence  was  appealed 
from  and  the  Appellate  Division  dismissed  appeal  on  ground 
that  order  was  not  appealable  under  §  2570  of  Code  of  Civil 
Procedure.  Matter  of  Astor,  137  App.  Div.  922. 

Report  should  be  made  clearly  to  express  that  it  embraces  all 
of  the  property  which  may  be  taxed  at  the  date  of  the  death  of 
decedent.  Matter  of  Earle,  74  App.  Div.  458. 

"That  which  is  to  be  reported  by  the  appraiser  is  the  value 
of  the  interest  passing  to  the  beneficiaries"  "without  any  deduc- 
tion for  any  purpose,  or  under  any  testamentary  direction." 
Matter  of  Swift,  137  N.  Y.  77-87. 

It  is  now  the  practice  for  the  appraiser  to  report  the  gross 
amount  of  the  estate  and  also  the  deductions  allowed. 

It  is  the  practice  for  the  appraiser  to  receive  such  competent 
evidence  as  may  be  submitted  to  him  to  establish  claims  for 
deductions  and  when  his  report  is  submitted  to  the  surrogate 
under  section  230  the  surrogate  adopts  the  conclusions  of  the 
appraiser  relative  to  the  deductions  when  he  comes  to  enter  his 
pro  forma  order  under  section  231,  unless  they  are  palpably 
improper.  Matter  of  A.  J.  Wormser,  36  Misc.  434.  Appeal 
may  be  taken  from  pro  forma  order,  vide  Appeal. 


(500  ARCHBISHOP 

Each  trust  estate  created  should  be  separately  set  forth  and 
appraised.  Matter  of  Vanderbilt,  172  N.  Y.  69-73. 

When  a  temporary  order  is  to  be  entered  under  the  provisions 
of  the  sixth  paragraph  of  §  230,  supra,  page  18,  the  report  should 
set  forth  the  necessary  facts;  vide  footnote  to  Matter  of  Brez, 
172  N.  Y.  609,  supra,  page  273. 

(3)  Supreme  court  may  appoint 

Under  the  provisions  of  §  232  an  appraiser  may  be  appointed 
by  Supreme  court.  Vide  Reappraisal. 

ARCHBISHOP 

Vide  Bishop. 

ASSETS 

Vide  Schedules  of  Assets,  supra,  page  96. 

ASSIGNMENT  BY  LEGATEE 
Vide  Election. 

ATTEMPT  TO  EXERCISE  POWER  OF  APPOINTMENT 

Vide  Power  of  Appointment. 

ATTORNEY  GENERAL 

Composition  of  tax  in  certain  estates  "by  and  with  the  con- 
sent of  the  attorney  general  expressed  in  writing."  Section  233. 
For  discussion  of  section  vide  Matter  of  Kidd,  115  -App.  Div. 
205-207,  reversed  188  N.  Y.  205. 

AVOIDING  TAX 

Vide  Election;  Evasion  of  Tax. 

BANK  DEPOSIT 

(1)  Waiver.  (4)  Prior  to  1911  amendment  in 

(2)  Resident.  non-resident  estate. 

(3)  Non-resident    since    1911 

amendment. 

Vide  Property  Held  Jointly  or  in  Trust. 

(1)  Waiver 

Bank  deposits  should  be  set  forth  hi  Schedule  A2,  supra, 
page  103. 

For  application  for  waivor  under  §  227  vide  supra,  page  69. 


BANK   DEPOSIT  601 

(2)  Resident 

A  bank  deposit  of  a  resident  decedent  is  subject  to  the  tax  no 
matter  whether  it  is  in  a  New  York  or  a  foreign  bank.  Subds. 
1  and  4  of  §  220  and  §  243.  The  same  is  true  as  to  a  certificate 
of  deposit.  It  should  be  remembered,  however,  that  the  transfer 
may  be  exempt  under  the  provisions  of  §  221  by  reason  of  the 
beneficiary  being  included  in  the  exempted  class  of  said  §  221, 
or  it  may  be  exempt  because  the  total  property  passing  from  the 
decedent  to  the  particular  beneficiary  is  less  than  the  exempted 
amount  provided  for  in  §  221a. 

Deposit  in  bank  which  has  been  closed,  vide  supra,  page  104. 

(3)  Non-resident  since  1911  amendment 

In  estates  of  non-residents  bank  deposits  have  not  been 
taxable  since  the  amendment  by  chap.  732,  Laws  of  1911,  in 
effect  July  21,  1911.  Subds.  2  and  4  of  §  220  and  §  243.  Under 
the  original  Act  of  1885  it  was  held  that  the  property  of  a 
non-resident  decedent  was  not  subject  to  the  tax.  Matter  of 
Enston,  113N.  Y.  174. 

(4)  Prior  to  1911  amendment  in  non-resident  estate 

From  the  amendment  by  chap.  713,  Laws  of  1887,  in  effect 
June  25,  1887,  to  the  1911  amendment  the  property  of  a  non- 
resident situated  within  the  state  has  been  subject  to  the  tax. 
Matter  of  Romaine,  127  N.  Y.  80.  Subsequent  to  the  Romaine 
case,  supra,  it  was  held  that  a  New  York  bank  deposit  of  a  non- 
resident decedent  was  subject  to  the  tax.  Matter  of  Blackstone, 
171  N.  Y.  682,  sustained  in  188  U.  S.  189,  sub  nom.  Blackstone  v. 
Miller;  Matter  of  Daly,  100  App.  Div.  373-381,  affirmed,  with- 
out opinion,  182  N.  Y.  524.  Before  1911  amendment  certificates 
of  deposit  in  New  York  bank,  although  certificate  physically 
without  the  state  at  time  of  non-resident's  death,  held,  taxable. 
Matter  of  Hewitt,  181  N.  Y.  547,  post,  page  301;  Matter  of 
Fearing,  138  App.  Div.  881-883,  supra,  page  374,  affirmed,  200 
N.  Y.  340. 

As  to  the  jurisdiction  of  a  surrogate  in  non-resident  cases 
prior  to  amendment  by  chap.  399,  Laws  of  1892,  in  effect  May  1, 
1892,  vide  Matter  of  Embury,  19  App.  Div.  214,  affirmed, 
without  opinion,  154  N.  Y.  746  and  Matter  of  Pettit,  65  App. 
Div.  30,  affirmed,  on  opinion  below,  171  N.  Y.  654.  As  to  the 
jurisdiction  after  the  1892  amendment,  vide  Matter  of  Fitch, 
160  N.  Y.  87;  Matter  of  Hubbard,  21  Misc.  566. 


602  BENEFICIARY 

BENEFICIARY 

Beneficiaries  and  their  interests  should  be  set  forth  in  Sched- 
ule D,  supra,  page  94. 

As  to  evidence  by,  vide  cases  cited  sub  TESTIMONY,  post, 
page  855. 

Residence  of  beneficiary  is  immaterial.  Matter  of  Green, 
153  N.  Y.  223-228,  supra,  page  216;  Matter  of  Dingman,  66 
App.  Div.  228. 

BENEVOLENT  CORPORATIONS 

Exempt  under  first  sentence  of  §  221,  supra,  page  40.  Vide 
Exemptions. 

BIBLE 

Corporations  organized  exclusively  for  bible  or  tract  pur- 
poses are  exempt  under  first  sentence  of  §  221,  supra,  page  41. 
Vide  Exemptions. 

BISHOP 

Bishop  exempt  under  §  221  although  a  non-resident.  Matter 
of  Palmer,  158  N.  Y.  669;  Matter  of  McCartin,  N.  Y.  Law 
Journal,  December  5,  1913,  opinion  quoted,  post,  page  608. 

Archbishop  as  well  as  cardinal  archbishop  held  to  be  within 
meaning  of  the  word  "bishop"  as  used  in  §221.  Matter  of 
Kelly,  29  Misc.  169-171;  Church  of  the  Transfiguration  v. 
Niles,  86  Hun,  221. 

BLANKET  MORTGAGE 

Vide  Matter  of  Tremberger,  N.  Y.  Law  Journal,  March  7, 
1912,  opinion  quoted  post,  page  659,  and  same  case,  N.  Y. 
Law  Journal,  October  31,  1913,  opinion  quoted  page  661. 

BLOCK  OF  STOCK 

Vide  page  115. 

BONA  FIDE  PURCHASER 

Vide  Lien  of  Tax. 

BOND  AND  MORTGAGE 

Vide  Mortgages. 


BONDS  603 

BONDS 

(1)  Waiver.  (4)  Prior  to  1911  amendment  in 

(2)  Resident.  non-resident  estate. 

(3)  Non-resident    since    1911 

amendment. 

(1)  Waiver 

Bonds  should  be  set  forth  in  Schedule  A4,  supra,  page  124. 
For  application  for  waiver  under  §  227  vide  page  69. 

(2)  Resident 

In  the  estate  of  a  resident  decedent  bonds  are  subject  to  the 
tax  no  matter  whether  they  are  bonds  of  a  domestic  or  a  foreign 
corporation,  even  though  the  bonds  are  physically  located  out- 
side the  State  of  New  York  at  the  time  of  decedent's  death. 
Subds.  1  and  4  of  §  220  and  §  243. 

United  States  bonds  are  subject  to  the  tax.  Plummer  v. 
Coler,  178  U.  S.  115. 

(3)  Non-resident  since  1911  amendment 

In  non-resident  estates  bonds  have  not  been  taxable,  even 
though  physically  located  within  the  State  at  the  time  of 
decedent's  death,  since  the  amendment  of  subds.  2  and  4  of 
§§  220  and  243  by  chap.  732  of  the  Laws  of  1911,  in  effect 
July  21, 1911. 

(4)  Prior  to  1911  amendment  in  non-resident  estate 
Under  the  Act  of  1885  it  was  held  that  bonds  and  other 

property  of  non-residents  were  not  taxable.  Matter  of  Enston, 
113  N.  Y.  174. 

Under  the  Act  of  1887  it  was  held  that  in  a  non-resident's 
estate  bonds  of  a  foreign  corporation  were  not  subject  to  the 
tax  although  physically  kept  within  the  State.  Matter  of 
Gibbes,  84  App.  Div.  510,  affirmed,  without  opinion,  176  N.  Y. 
565.  In  construing  the  1887  Act  it  was  held  that  United  States 
bonds  were  bonds  of  a  foreign  corporation  and  not  taxable  under 
said  Act  in  the  estate  of  a  non-resident.  Matter  of  Schermer- 
horn,  50  Misc.  233.  Vide  United  States  Bonds,  post,  page  876. 

From  the  amendment  by  chap.  399,  Laws  of  1892,  in  effect 
May  1, 1892,  to  the  1911  amendment  bonds  of  a  foreign  corpora- 
tion physically  located  within  the  State  of  New  York  were 
taxable  in  a  non-resident's  estate.  Matter  of  Whiting,  150 
N.  Y.  27;  Matter  of  Morgan,  150  id.  35. 

Bonds  of  a  New  York  corporation  owned  by  a  non-resident 


604  BOOK    VALUE 

decedent  were  not  taxable  unless  physically  located  within 
the  State  of  New  York  at  the  time  of  the  non-resident's  death. 
Matter  of  Bronson,  150  N.  Y.  1.  Similar  ruling  as  to  bonds  and 
mortgages  upon  New  York  real  estate.  Matter  of  Fearing,  200 
N.  Y.  340;  Matter  of  Preston,  75  App.  Div.  250. 

Non-resident  decedent  was  stockholder  in  foreign  corporation, 
and  as  such  had  right  to  certain  bonds  to  be  issued  in  New 
York.  Held,  not  taxable  as  the  title  to  the  bonds  was  in  the 
foreign  corporation.  Matter  of  Hillman,  116  App.  Div.  186. 

BOOK  VALUE 

"Prima  facie  the  book  value  is  evidence  against  the  holder 
of  stock.  The  presumption  may  be  rebutted  by  proof  of '  market 
value.' "  Matter  of  Valentine,  N.  Y.  Law  Journal,  December  4, 
1913,  opinion  quoted,  post,  page  622. 

BOOKS 

Books  should  be  set  forth  in  Schedule  A3  and  appraisal  should 
be  furnished,  supra,  page  106. 
Vide  §  2216  as  to  when  exempt. 

BOSTON  &  ALBANY  R.  R.  CO. 

Prior  to  amendment  of  §§  220  and  243  by  chap.  732,  Laws  of 
1911,  in  effect  July  21,  1911,  stock  held  by  non-resident's  estate 
in  Boston  &  Albany  Railroad  Company  was  taxed  on  vAVo 
basis.  Matter  of  Cooley,  186  N.  Y.  220;  Matter  of  Thayer, 
193  N.  Y.  430. 

Stock  defined  as  intangible  property  (§  243)  and  not  taxable 
in  non-resident's  estate  since  1911  amendment. 

BROKER'S  COMMISSIONS 

Vide,  Schedule  B2  supra>  page  128. 

BROTHER 

Entitled  to  five  thousand  dollars  exemption  and  the  lower 
rates  of  subd.  1  of  §  221a;  supra,  page  45. 

BURDEN  OF  PROOF 

(1)  When    burden    is   on    state          (2)  When  burden  is  on  claimant, 
comptroller. 

Vide  Testimony. 

(1)  When  burden  is  on  state  comptroller 

As  inheritance  tax  is  a  special  and  not  a  general  tax  the  burden 
of  proof  rests  with  the  state  to  bring  the  transfer  within  the 


BURDEN    OF    PROOF  605 

terms  of  the  statute.  Matter  of  Enston,  113  N.  Y.  174-178; 
Matter  of  Thorne,  44  App.  Div.  8-10,  appeal  dismissed  162 
N.  Y.  238;  Matter  of  Miller,  77  App.  Div.  473^80;  Matter  of 
Kennedy,  113  App.  Div.  4-6. 

PRIMA  FACIE  CASE  entirely  uncontradicted  sustains  burden  of 
proof.  Matter  of  Lane,  39  Misc.  522. 

Where  circumstances  of  the  case  led  the  court  to  hold  that  a 
transfer  absolute  on  its  face  was  in  reality  merely  for  purpose  of 
giving  transferee  custody  and  management  thereof,  the  burden 
of  proof  may  be  sustained  by  circumstantial  evidence.  "Such 
circumstantial  evidence  may  overbear  the  positive  testimony  of 
an  interested  party  who  swears  to  the  contrary."  Matter  of 
Palmer,  117  App.  Div.  360-368;  Matter  of  Price,  62  Misc. 
149-152.  In  Matter  of  Ahrens,  N.  Y.  Law  Journal,  May  10, 
1913,  opinion  quoted  sub  Contemplation  of  Death,  the  surrogate 
said:  "The  burden  of  proving  that  the  gift  was  made  in  con- 
templation of  death  was  upon  the  state  comptroller  (Matter  of 
Palmer,  117  App.  Div.  360);  and  while  the  nature  of  the  case 
rendered  it  exceedingly  difficult  for  him  to  obtain  direct  and 
positive  proof,  he  could  by  an  intelligent  cross-examination  of 
the  witnesses  produced  on  behalf  of  the  estate  have  obtained 
some  evidence  of  the  material  facts." 

On  appeal  to  surrogate  from  pro  forma  order  comptroller 
sought  to  have  rehearing  for  purpose  of  revaluation  of  stock, 
which  was  denied,  the  surrogate  saying,  "There  is  nowhere 
contained  in  appellant's  papers  a  specific  fact,  or  statement  of 
any  person  competent  to  judge  that  this  stock  is  worth  one 
dollar  more  than  the  sum  for  which  it  has  been  appraised." 
Matter  of  Johnson,  37  Misc.  542. 

DISCOVERY  OF  NEW  FACTS  must  be  shown  by  comptroller 
to  entitle  him  to  order  appointing  appraiser  to  value  asset  the 
valuation  of  which  in  a  previous  appraisal  had  been  suspended. 
Matter  of  De  Sala,  N.  Y.  Law  Journal,  July  20,  1912. 

Executrix  claimed  that  contents  of  certain  pocketbook 
belonged  to  her  and  not  to  her  husband,  the  decedent.  The 
appraiser  held  that  the  securities  were  taxable  in  husband's 
estate.  Surrogate  Cohalan  overruled  the  appraiser,  Matter  of 
Harry  M.  Francis,  N.  Y.  Law  Journal,  August  12,  1913,  opinion 
quoted  sub  Ownership  of  Property,  page  749,  on  ground  that 
comptroller  had  failed  to  sustain  the  burden  "imposed  on  him  of 
showing  that  the  property  was  subject  to  the  provisions  of  the 
Transfer  Tax  Law," 


006  BURDEN   OF    PROOF 

FRAUDULENTLY  CONCEALED  ASSETS.  Burden  is  upon  comp- 
troller to  shoAV  that  executor  concealed  from  appraiser  certain 
assets  and  "  in  the  absence  of  such  convincing  evidence  the  court 
will  not  vacate  its  order  entered  more  than  four  years  ago." 
Matter  of  Peck,  149  App.  Div.  912. 

SAVINGS  BANK  ACCOUNT  in  name  of  decedent  in  trust  for  his 
son  casts  upon  comptroller  burden  of  showing  that  transfer  was 
made  in  contemplation  of  death  where  bank  book  has  been 
delivered  to  cestui  que  trust.  Matter  of  Mathew  Farrell,  N.  Y. 
Journal,  January  3, 1912,  opinion  quoted  page  797. 

PUBLIC  ADMINISTRATOR'S  affidavit  held  to  be  "insufficient  to 
warrant  the  court  in  vacating  the  order  assessing  tax  heretofore 
entered  upon  his  petition.  If  evidence  which  he  has  since 
discovered  shows  that  the  decedent  died  prior  to  the  enactment 
of  the  Inheritance  Tax  Laws  of  this  State  he  should  state  the 
nature  of  this  evidence  and  the  source  of  his  information.  The 
application  to  vacate  the  order  fixing  tax  will  be  denied,  with 
leave  to  renew  upon  papers  containing  allegations  as  herein 
indicated."  Matter  of  Mary  Bernard,  N.  Y.  Law  Journal, 
November  28,  1911. 

(2)  When  burden  is  on  claimant 

ADVANCEMENTS  were  claimed  in  Matter  of  Dormitzer.  N.  Y. 
Law  Journal,  February  6,  1913,  opinion  quoted  sub  Advance- 
ments, and  it  was  held  that  claimant  had  not  sustained  burden 
of  proof. 

Burden  of  proof  is  upon  beneficiary  claiming  under  §  221o, 
subd.  1  on  ground  of  mutually  acknowledged  relationship  of 
parent  and  child.  Matter  of  Davis,  98  App.  Div.  546-549, 
reversed  in  184  N.  Y.  299  but  not  on  this  point.  Matter  of 
Birdsall,  22  Misc.  180-187,  affirmed,  without  opinion,  43  App. 
Div.  624.  Beneficiary  is  a  competent  witness.  Matter  of 
Brundage,  31  App.  Div.  348-352,  and  cases  cited  re  §  829  of 
Code  of  Civ.  Pro.  sub  TESTIMONY. 

DEDUCTIONS  sought  must  be  shown  to  be  necessary  or  proper 
expense  of  administration  to  which  the  legal  representatives  of 
the  estate  will  be  entitled  to  be  credited  on  their  accounting. 
Matter  of  Thomas,  39  Misc.  223. 

FOREIGN  DECREES  and  proceedings  for  which  full  faith  and 
credit  are  claimed  by  representative  of  estate  should  be  proved, 
and  until  proof  is  made  it  is  not  incumbent  upon  the  state 
comptroller  either  to  attack  the  jurisdiction  of  the  foreign  court 


CASH    VALUE  607 

or  to  prove  the  law  of  the  state.  Matter  of  Cummings,  142 
App.  Div.  377-386. 

Surrogate  Fowler  in  Matter  of  Loewi,  75  Misc.  57,  held  that 
"where  the  beneficiaries  of  decedent's  bounty  claim  exemption 
from  taxation  upon  the  ground  that  the  property  passed  to 
them  as  a  gift  from  the  decedent,"  the  court  will  require  "  on 
part  of  the  donees  or  beneficiaries  satisfactory  and  convincing 
proof  that  such  gifts  were  made  inter  vivos  with  the  intent  to 
pass  title  at  the  time  of  making  the  alleged  gift.  If  such 
evidence  on  the  part  of  the  beneficiaries  does  not  show  to  the 
satisfaction  of  the  court  that  all  the  essential  requirements 
necessary  to  the  validity  of  a  gift  inter  vivos  have  been  fully 
complied  with,  no  presumption  in  favor  of  such  gifts  will  be 
indulged  in,  and  the  property  will  be  held  to  pass  either  as  a 
gift  in  contemplation  of  death  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  death." 

Testatrix  forgave  one-half  of  notes  held  against  her  brother's 
estate,  and  the  executrix  of  her  estate  collected  the  half  not 
forgiven.  The  surrogate  took  the  position  that  the  burden  was 
upon  the  estate  "to  show  that  the  fair  market  value  of  the  one- 
half  of  such  claims  was  not  one-half  of  the  face  value  of  the 
notes,  with  interest."  Matter  of  Wood,  40  Misc.  155-156. 

RECITAL  IN  WILL  that  beneficiary  is  an  adopted  daughter, 
does  not  relieve  from  burden  of  proof  to  establish  adoption. 
Matter  of  Fisch,  34  Misc.  146. 

BURIAL  EXPENSES 

Schedule  B1,  supra,  page  124. 

BUSINESS  OF  DECEDENT 

Vide  Good  Will,  post,  page  706;  etiam  Schedule  A5,  supra, 
page  117. 

CARDINAL  ARCHBISHOP 

Vide  Bishop. 

CASH 

In  RESIDENT  estate  should  be  listed  in  Schedule  A2,  supra, 
page  102.  Not  taxable  in  NON-RESIDENT  estate,  supra,  page  134. 

CASH  VALUE 

It  would  seem  that  the  legislature  intended  that "  cash  value  " 
of  §231  should  be  synonymous  with  "clear  market  value"  of 
subd.  7  of  §  220  and  "fair  market  value"  of  §  230. 


608  CAUSA   MORTIS 

"The  language  of  the  act  has  been  justly  condemned,  for 
being  involved  and  difficult  to  read  clearly."  Matter  of  Swift, 
137  N.  Y.  77-82. 

"Sections  230  and  231  both  contemplate  the  appraisement  of 
the  property  at  its  fair  market  value  at  the  time  of  the  transfer, 
and  that  value  must  be  proved  by  competent  legal  evidence  to 
justify  the  appraiser  in  fixing  any  value."  Matter  of  Smith,  71 
App.  Div.  602-604. 

CAUSA  MORTIS 

"A  gift  causa  mortis  is  made  with  respect  to  its  effect  after 
death,  is  conditional  upon  the  happening  of  that  event,  and 
revocable  during  life,  and  may,  therefore,  be  said  to  take  effect 
at  or  after  death."  Matter  of  Birdsall,  22  Misc.  180-195, 
affirmed,  without  opinion,  43  App.  Div.  624.  It  is  subject  to  the 
tax.  Matter  of  Edwards,  85  Hun,  436,  affirmed  without  opinion, 
146  N.  Y.  380. 

Subdivision  5,  §  220,  relates  to  gifts  causa  mortis.  Matter  of 
Seaman,  147  N.  Y.  69-77,  supra,  page  198. 

CEMETERY  CORPORATION  OR  ASSOCIATION 

Entitled  to  the  exemptions  under  the  second  sentence  of 
§  221,  vide  supra,  page  41. 

CEMETERY  PLOT 

Legacy  for  care  of,  exempt.  Matter  of  Maverick,  198  N.  Y. 
618. 

A  reasonable  amount  spent  in  purchase  of  burial  plot  will  be 
allowed  as  deduction.  Matter  of  Liss,  39  Misc.  123. 

CERTIFICATES  OF  DEPOSIT 

Vide  Bank  Deposits. 

CHARITABLE  CORPORATIONS 

By  amendment  of  chap.  368,  Laws  1905,  in  effect  June  1, 
1905,  transfers  to  domestic  charitable  corporations  were  made 
exempt.  Matter  of  Higgins,  55  Misc.  175. 

Since  amendment  of  §  221  by  Laws  1911,  chap.  732,  in  effect 
July  21,  1911,  charitable  corporations  wherever  incorporated 
are  exempt. 

IN  MATTER  OF  McCARTiN,  N.  Y.  Law  Journal,  December  5, 
1913,  the  decedent,  a  non-resident,  died  prior  to  1911  amend- 
ment. Surrogate  Cohalan  held:  "This  is  an  appeal  from  an 


CHOSE    IN   ACTION  609 

order  fixing  tax.  The  executor  contends  that  the  value  of  the 
bequest  given  by  the  decedent  to  the  Bishop  of  Newark  'in 
trust  for  a  home  for  incurables  to  be  established  in  Jersey  City ' 
is  exempt  from  taxation.  No  proof  was  adduced  before  the 
appraiser  of  the  law  of  New  Jersey  in  regard  to  the  validity  and 
effect  of  bequests  in  trust  for  a  charitable  corporation  to  be 
formed  after  the  death  of  the  testator,  and  it  will  therefore  be 
presumed  for  the  purpose  of  this  application  that  the  law  of 
New  Jersey  is  the  same  as  our  law.  If  the  bequest  were  made 
absolutely  to  the  bishop  it  would  not  be  subject  to  a  tax  (sec.  221, 
Tax  Law;  Matter  of  Palmer,  33  App.  Div.  307),  but  the  be- 
quest is  for  a  charitable  corporation,  and  the  bishop  is  merely 
the  trustee  designated  by  the  decedent  to  pay  the  legacy  to  the 
corporation.  Under  the  law  in  effect  at  the  date  of  decedent's 
death,  bequests  to  foreign  charitable  corporations  were  sub- 
ject to  the  transfer  tax  (Matter  of  Prime,  136  N.  Y.  347; 
Matter  of  Balleis,  144  N.  Y.  132).  It  is  immaterial  whether 
the  corporation  was  in  existence  at  the  date  of  decedent's  death 
or  whether  it  was  formed  subsequently  (Matter  of  Graves,  171 
N.  Y.  40).  The  appeal  is  dismissed  on  this  point." 

UNDER  LAWS  OF  1900,  CHAP.  382,  not  exempt.  Matter  of 
Hunlington,  168  N.  Y.  399;  Matter  of  Watson,  171  id.  256; 
Matter  of  Guggenheim,  189  N.  Y.  561,  supra,  page  347;  Matter 
of  Grouse,  34  Misc.  G70. 

Vide  Exemptions,  post,  page  685. 

CHILD 

Entitled  to  five  thousand  dollars  exemption  and  minimum 
rates  of  subd.  1  of  §  221a;  supra,  pages  45  et  seq. 

Vide  Adopted  Child,  supra,  page  583,  Illegitimate  Descend- 
ants, post,  page  719;  Mutually  Acknowledged  Relation  of  Parent 
and  Child,  post,  page  742. 

CHOSE  IN  ACTION 

(1)  Interest  of  resident  decedent          (3)  Prior  to  1911  amendment. 

in  another  estate.  (4)  Debt  due   from   resident  to 

(2)  Non-resident.  non-resident. 

A  chose  in  action  in  favor  of  a  resident  decedent  is  subject  to 
the  tax  whether  against  a  resident  or  a  non-resident.  Subds.  1 
and  4  of  §  220  and  §  243. 

If  the  fair  market  value  of  the  chose  in  action  is  not  ascer- 
tuinable  at  the  lime  of  the  appraisal,  its  taxation  should  be 
39 


610  CHOSE   IN   ACTION 

suspended.  The  report  of  the  appraiser  and  the  order  of  the 
surrogate  entered  upon  the  report  under  §  231  should  note  the 
fact  that  the  taxation  of  the  chose  in  action  in  question  has  been 
suspended  for  future  appraisement.  Matter  of  Westurn,  152 
N.  Y.  93-103;  Matter  of  Skinner,  106  App.  Div.  217-218. 

(1)  Interest  of  resident  decedent  in  another  estate 

In  Matter  of  Sterry,  N.  Y.  Law  Journal,  April  30,  1912,  the 
only  property  to  which  decedent  was  entitled  at  the  time  of  his 
death  consisted  of  a  possible  interest  in  his  father's  estate. 
Surrogate  Cohalan  held  that  "as  the  value  of  this  interest,  if 
any,  could  not  be  determined  until  the  termination  of  the  legal 
proceedings  instituted  for  that  purpose,  the  transfer  tax  on 
decedent's  estate  did  not  accrue  until  January  4,  1911,  the  date 
when  the  value  of  this  interest  was  ascertained  and  paid." 

Where,  however,  interest  of  decedent  is  ascertained  and 
subject  only  to  the  life  estate  of  a  life  tenant,  decedent's  interest 
is  presently  taxable.  Matter  of  Huber,  86  App.  Div.  458-463. 

Vide  cases  cited  sub  Time  of  Tax. 

(2)  Non-resident 

In  estates  of  non-residents  a  chose  in  action  has  not  been 
taxable  since  the  amendment  by  chap.  732,  Laws  of  1911,  in 
effect  July  21,  1911.  Subds.  2  and  4  of  §  220  and  §  243. 

(3)  Prior  to  1911  amendment 

As  to  taxation  of  a  chose  in  action  in  non-resident  estates 
prior  to  the  1911  amendment,  vide  Matter  of  Houdayer,  150 
N.  Y.  37;  Matter  of  Blackstone,  171  N.  Y.  682,  sustained  in  188 
U.  S.  189  sub  nom.  Blackstone  v.  Miller;  Matter  of  Daly,  100 
App.  Div.  373,  affirmed,  without  opinion,  182  N.  Y.  524; 
Matter  of  Zefita,  167  N.  Y.  280;  Matter  of  Clinch,  180  N.  Y. 
300;  Matter  of  Lord,  111  App.  Div.  152,  157,  affirmed,  without 
opinion,  186  N.  Y.  549,  sustained  in  211  U.  S.  477  sub  nom. 
Beers  v.  Glynn;  Matter  of  Fearing,  200  N.  Y.  340;  Matter  of 
Tiffany,  143  App.  Div.  327,  affirmed,  on  opinion  of  McLaughlin, 
J.,  below,  202  N.  Y.  550,  appeal  pending  in  United  States  Su- 
preme Court.  Vide  etiam  Matter  of  Ames,  141  N.  Y.  Supp. 
793;  Matter  of  Bentley,  31  Misc.  656. 

(4)  Debt  due  from  resident  to  non-resident 

The  question  of  the  taxability  of  the  transfer  of  a  debt  due 
from  a  resident  decedent  prior  to  the  1911  amendment  was 
discussed  by  Surrogate  Fowler  in  Matter  of  Mary  M.  Page, 


CHOSE    IN   ACTION  611 

N.  Y.  Law  Journal,  April  13,  1912,  the  surrogate  saying:  "The 
decedent,  who  was  a  resident  of  Lebanon,  Pennsylvania,  died  on 
the  26th  of  April,  1910.  She  left  a  will  which  was  probated  in 
Pennsylvania.  At  the  time  of  her  death  there  was  due  to  her 
from  a  resident  of  the  State  of  New  York  the  sum  of  $4,600. 
This  New  York  debtor  duly  qualified  as  an  executor  of  her 
estate.  The  transfer  tax  appraiser  included  this  indebtedness  in 
the  taxable  assets  of  decedent's  estate,  and  the  executor  has 
taken  this  appeal  from  the  order  entered  upon  the  appraiser's 
report.  It  has  been  held  that  a  debt  due  from  a  resident  of  this 
State  to  a  non-resident  has,  for  the  purpose  of  the  transfer  tax, 
its  situs  in  this  State  (Blackstone  v.  Miller,  188  U.  S.  189),  and 
that  such  an  indebtedness  constitutes  a  part  of  the  estate  of  the 
non-resident  creditor  subject  to  taxation  in  this  State  (Matter 
of  Clinch,  180  N.  Y.  300;  Matter  of  Daly,  100  App.  Div.  373, 
aff'd!82N.Y.524). 

"It  is  contended,  however,  that  this  matter  comes  within 
the  decision  of  the  Court  of  Appeals  in  the  Matter  of  Gordon 
(186  N.  Y.  471).  In  that  case  there  was  due  to  the  estate  of  a 
non-resident  decedent  from  the  Equitable  Life  Assurance 
Society,  a  domestic  corporation,  the  proceeds  of  a  policy  of  life 
insurance,  and  it  appeared  from  the  appraiser's  report  that  the 
insurance  company  had  designated  an  individual  hi  the  State  of 
decedent's  domicile  upon  whom  process  could  be  served,  and 
that  it  had  at  the  date  of  decedent's  death  sufficient  property  in 
the  foreign  State  to  pay  the  claim  of  the  decedent.  The  court 
held  that  under  these  circumstances  the  indebtedness  of  the 
Equitable  Life  Assurance  Society  to  the  estate  of  the  decedent 
was  not  taxable  here.  The  manner  in  which  the  Court  of  Ap- 
peals distinguished  the  Matter  of  Gordon  from  the  cases  above 
cited  would  seem  to  indicate  that  the  authority  of  that  case 
should  be  limited  to  cases  involving  precisely  the  same  state  of 
facts. 

"As  it  does  not  appear  that  the  New  York  debtor  in  the  mat- 
ter under  consideration  had  any  property  in  Pennsylvania  which 
could  be  applied  in  settlement  of  his  indebtedness  to  the  de- 
cedent, I  think  this  matter  is  distinguishable  from  the  Matter 
of  Gordon,  and  that  it  is  controlled  by  the  decisions  in  the 
Matter  of  Clinch  and  the  Matter  of  Daly  (supra) .  It  appears, 
therefore,  that  the  indebtedness  due  the  decedent  from  a  resident 
of  this  State  was  properly  included  in  the  taxable  assets  of 
decedent's  estate." 


612 


CLAIMS  AGAINST  DECEDENT 


CLAIMS  AGAINST  DECEDENT 

Vide  Schedule  B3,  supra,  page  129;  etiam  cases  cited  sub  De- 
ductions, post,  page  656. 

CLAIMS  DUE  DECEDENT 

Vide  Debts  Due  Decedent. 

CLEAR  MARKET  VALUE 

Vide  Cash  Value. 


CLOSELY  HELD  STOCK 

(1)  Contents  of  affidavit. 

(2)  Stock     having     no     "market 

value." 

(3)  Value  can  only  be  ascertained 

with  reasonable  certainty. 

(4)  Valuation  of  stock  is  a  question 

of  fact. 

(5)  §  122  of  Decedent  Estate  Law 

not  applicable  to  stock  not 
customarily  bought  and  sold 
in  the  open  market. 

(6)  Unless    there    is    evidence    to 

show  different  value  the  sale 
price  should  govern. 

(7)  Appraisal  in  other  proceedings 

not  controlling. 

(8)  The  basis  of  opinions  must  be 

given. 

(9)  Large  blocks  of  stock. 

(10)  Semon,  Bach  &  Co. 


(11)  Dividends  not  controlling,  but 

may  be  taken  into  considera- 
tion. 

(12)  In  the  absence  of  bona  fide 

sales  the  book  value  may  be 
taken  as  basis  of  valuation. 

(13)  Good  will. 

(14)  Sale  from  one  officer  of  corpo- 

ration to  another  does  not 
necessarily  establish  "mar- 
ket value." 

(15)  Valuation  of  bonds. 

(16)  Pulitzer  Estate. 

(17)  Stocks  listed  on  local  exchange. 

(18)  Inactive    securities    that    are 

customarily  bought  and  sold 
in  the  open  market. 

(19)  §  122  of  Decedent  Estate  Law 

as  applied  to  comparatively 
inactive  securities. 


(1)  Contents  of  affidavit 

In  estates  in  which  the  assets  include  unlisted  stocks  there 
should  be  submitted  to  the  appraiser  an  affidavit  setting  forth 
when  and  where  the  corporation  was  incorporated,  its  place  of 
transacting  business  and  the  nature  of  its  business,  its  au- 
thorized capital  stock,  the  par  value  and  the  amount  of  stock 
issued  and  outstanding.  If  there  are  common  and  preferred 
stock,  the  amount  of  each  issued  and  the  preferences  of  the 
preferred  stock  should  be  given.  The  affidavit  should  also  state 
what  recent  sales,  if  any,  there  have  been  of  the  stock.  The 
affidavit  or  affidavits  should  be  made  by  those  who  are  in  a 
position  to  give  facts  and  not  conclusions.  If  definite  informa- 
tion cannot  be  given  then  the  affiant  should  state  what  effort 


CLOSELY   HELD    STOCK  613 

has  been  made  to  obtain  the  data  required,  and  should  give 
the  sources  of  information  and  the  grounds  of  belief  of  any  state- 
ments that  the  affiant  may  make  upon  information  and  belief. 
If  there  have  been  no  sales,  or  if  the  sales  have  been  too  remote 
in  point  of  time  from  the  date  of  decedent's  death,  or  if  they 
have  not  been  of  sufficient  volume,  or  if  they  have  not  been  of 
such  a  character  as  to  establish  a  market  value  within  the  def- 
initions outlined  in  the  cases  cited  below,  then  the  estate  should 
furnish  such  additional  information  as  the  appraiser  may  require 
to  assist  him  in  reaching  a  conclusion  as  to  the  fair  valuation  of 
the  stock.  How  much  information  will  be  required  depends 
upon  the  varying  circumstances  of  each  particular  case.  It  is 
the  practice  to  ask  that  there  be  given  the  value  and  nature  of 
the  assets  of  the  corporation  and  a  detailed  statement  of  its 
liabilities.  Also  the  amount  of  its  earnings  and  dividends 
through  a  series  of  years.  The  earnings  per  annum  and  the 
dividends  should  be  given  for  at  least  three  years  prior  to  the 
death  of  decedent.  In  some  cases  even  after  such  affidavits  have 
been  filed  it  will  be  necessary  to  have  hearings  before  the  ap- 
praiser at  which  the  question  of  the  valuation  will  be  tried  out. 

(2)  Stock  having  no  "  market  value  " 

The  intrinsic  difficulty  of  this  subject  is  due  to  the  fact  that  in- 
active stock  not  ordinarily  dealt  in  has  no  "market  value"  in 
the  ordinary  meaning  of  that  term.  When  the  market  value  of 
stock  is  referred  to  among  business  men,  it  means  the  price  at 
which  it  can  be  sold  in  the  open  market.  Stocks  listed  on  an 
exchange  and  actively  dealt  in  have  a  market  value  from  day 
to  day.  There  are  many  corporations,  however,  whose  stock  is 
very  rarely  sold,  and  the  price  received  for  such  stock  may  be 
governed  by  so  many  circumstances  that  it  can  hardly  be  said 
that  the  sale  price  is  a  market  value  in  the  common  acceptation 
of  the  words.  A  high  price  might  have  been  paid  for  such  a 
stock  in  order  to  get  control.  On  the  other  hand,  a  low  price 
might  have  been  accepted  because  the  seller  was  compelled  to 
sell  and  his  market,  so  to  speak,  was  limited  to  the  persons  in 
the  corporation.  Then  again,  there  are  corporations  which  are 
in  reality  family  affairs  and  the  question  of  the  value  of  the 
stock  is  for  the  first  time  raised  when  a  member  of  the  family  dies 
and  his  estate  comes  before  the  transfer  tax  appraiser. 

(3)  Value  can  only  be  ascertained  with  reasonable  certainty 

The  question  is  often  asked  "  What  is  the  rule  for  the  appraisal 


614  CLOSELY   HELD    STOCK 

of  inactive  or  closely  held  stock? ' '  From  the  very  nature  of  such 
stocks  there  can  be  no  fixed  rule. 

In  the  recent  case  of  Matter  of  Rees,  208  N.  Y.  590,  the  Court 
of  Appeals  had  an  opportunity  to  lay  down  a  rule,  but  it  rested 
content  in  affirming,  without  opinion,  the  order  of  the  Appellate 
Division,  which  affirmed,  without  opinion,  the  order  of  the 
surrogate.  The  opinion  of  the  surrogate  was  that  "the  value  of 
stock  in  a  corporation,  the  shares  of  which  are  not  customarily 
bought  and  sold  in  the  open  market,  is  not  capable  of  deter- 
mination with  mathematical  certainty;  it  can  only  be  ascer- 
tained with  reasonable  certainty." 

Thus  each  particular  corporation  is  a  problem  unto  itself,  to 
be  struggled  with  by  those  upon  whom  has  devolved  the  duty 
of  seeing  that  the  value  of  its  stock  should  be  properly  appraised. 

By  reference  to  the  digest  of  the  Rees  case,  supra,  page  392, 
it  is  apparent  that  the  words  "market  value"  of  §  230  are  not 
to  be  taken  literally. 

This  situation  is,  after  all,  not  an  unnatural  one.  If  instead 
of  a  valuation  for  inheritance  taxation  the  valuation  was  being 
made  for  a  bargain  and  sale  of  the  stock  during  the  lifetime  of 
the  owner,  would  there  not  be  difficulties  in  arriving  at  the 
value?  I  think  so.  If  one  were  to  buy  stock  in  a  closely  held 
corporation  there  would  be  a  number  of  things  which  one  would 
want  to  know  before  the  purchase  was  consummated.  What 
these  elements  might  be  would  necessarily  differ  with  stock  in 
different  corporations.  As  it  is  in  the  every  day  dealings  of  men 
so  in  the  appraisal  for  taxation  purposes  it  is  necessary  to  treat 
each  case  according  to  the  peculiar  facts  of  the  transaction. 

(4)  Valuation  of  stock  is  a  question  of  fact 

The  Court  of  Appeals  has  said  that  the  question  of  the  valua- 
tion of  stock  is  a  question  of  fact.  Matter  of  Thayer,  193  N.  Y. 
430-433.  Like  every  other  question  of  fact  it  must  be  litigated 
if  disputed.  As  a  guide  for  such  disputes  there  are  quoted  the 
following  judicial  expressions. 

(5)  §  122  of  Decedent  Estate  Law  not  applicable  to  stock  not 
customarily  bought  and  sold  in  the  open  market 

Section  122  of  Decedent  Estate  Law  is  not  controlling  in 
valuing  an  inactive  stock.  Matter  of  Curtice,  111  App.  Div. 
230-233,  affirmed,  without  opinion,  185  N.  Y.  543.  For  digest 
of  case  vide  post,  page  324. 


CLOSELY   HELD    STOCK  615 

In  Matter  of  Alfred  S.  Malcolmson,  N.  Y.  Law  Journal, 
June  20,  1912,  the  surrogate  held:  "This  appeal  from  the  order 
fixing  tax  is  taken  by  the  State  Comptroller  upon  the  ground 
that  the  appraiser  adopted  an  incorrect  method  of  appraisal  in 
ascertaining  the  value  of  decedent's  holdings  of  stock  in  the 
Franklin  H.  Kalbfleisch  Company.  The  decedent  died  on  the 
4th  of  June,  1909.  At  that  time  he  owned  669  shares  of  stock 
in  the  Franklin  H.  Kalbfleisch  Company.  This  stock  was  not 
customarily  bought  and  sold  in  the  open  market.  On  the  20th 
of  July,  1910,  75  shares  were  sold  at  auction  by  the  executors, 
and  the  price  received  was  $5  a  share.  On  the  9th  of  May,  191 1, 
the  executors  sold  to  a  subsidiary  of  the  Franklin  H.  Kalbfleisch 
Company  372  shares  of  the  stock  at  $15  a  share.  The  appraiser 
found  that  the  average  of  these  two  sales  represented  the  fair 
market  value  of  the  stock  at  the  date  of  decedent's  death.  Sec- 
tion 122  of  chapter  18  of  the  Laws  of  1909,  prescribing  the 
method  by  which  the  value  of  stocks  may  be  ascertained,  ap- 
plies only  to  stocks  that  are  customarily  bought  and  sold  in  the 
open  market  (Matter  of  Kennedy,  N.  Y.  Law  Journal,  March  8, 
1911;  Matter  of  Chambers,  N.  Y.  Law  Journal,  January  31, 
1912).  There  is  no  authority  for  the  proposition  that  the  value 
of  a  stock  which  is  not  bought  or  sold  in  the  open  market  may 
be  ascertained  by  taking  the  average  price  of  two  sales,  one  of 
which  was  made  one  year  after  decedent's  death  and  the  other 
two  years  after  that  event.  The  value  of  the  stock  is  to  be 
ascertained  as  of  the  date  of  decedent's  death,  and  this  neces- 
sarily excludes  any  consideration  of  what  it  may  have  been  sold 
for  two  years  after  his  death.  As  the  securities  of  this  company 
were  not  customarily  bought  and  sold  in  the  open  market  the 
appraiser  should  have  ascertained  the  value  of  the  stock  from 
the  statement  of  assets  and  liabilities  taken  from  the  books  of 
the  company  (Matter  of  Bach,  N.  Y.  Law  Journal,  November  21, 
1911).  These  books  are  proper  evidence  of  the  value  which  the 
corporation  places  on  its  assets,  but  it  may  be  shown  that  this 
value  is  excessive,  insufficient  or  otherwise  incorrect.  The  ap- 
praiser therefore  should  take  into  consideration  the  evidence 
submitted  as  to  the  excessive  value  at  which  certain  assets 
were  alleged  to  be  carried  upon  the  books  of  the  company,  and 
from  this  evidence  and  the  report  of  the  expert  accountant  de- 
termine the  value  of  the  stock  as  of  the  date  of  decedent's  death. 
The  order  fixing  tax  will  be  reversed  and  the  appraiser's  report 
remitted  to  him  for  correction  as  indicated." 


616  CLOSELY   HELD   STOCK 

(6)  Unless  there  is  evidence  tending  to  show  different  value 
the  sale  price  should  govern. 

"In  the  absence  of  evidence  of  any  fact  tending  to  show  that 
the  sales  of  the  stock  that  were  actually  made  from  the  date 
of  the  incorporation  of  the  defendant  down  to  a  period  several 
months  after  the  death  of  the  decedent  were  not  at  the  fair 
market  value  at  the  time  they  were  made,  and  in  the  absence 
of  evidence  tending  to  show  that  a  stock  earning  6  or  8  per  cent, 
dividends  a  year  was  worth  more  than  the  price  at  which  the 
stock  had  been  sold,  or  if  any  special  fact  or  circumstance 
showing  any  greater  value  of  the  stock  than  that  at  which  it 
had  been  sold,  the  appraiser  was  not  justified  in  fixing  the  value 
of  the  stock  at  a  greater  price  than  was  fixed  by  original  ap- 
praisal." Matter  of  Elizabeth  H.  Smith,  71  App.  Div.  602. 

In  Matter  of  Achelis,  N.  Y.  Law  Journal,  March  9,  1912,  in 
remitting  report  to  appraiser  Surrogate  Fowler  said:  "As  it  is 
alleged  that  the  stock  is  not  bought  and  sold  upon  the  open 
market,  and  THERE  WAS  NO  EVIDENCE  OF  ANY  SALE  WITHIN  A 
REASONABLE  TIME  before  or  after  decedent's  death,  the  ap- 
praiser should  have  obtained  a  statement  of  the  assets  and 
liabilities  of  the  company,  so  as  to  enable  him  to  ascertain  the 
intrinsic  value  of  the  stock." 

(7)  Appraisal  in  other  proceedings  not  controlling 

American  News  Company:  The  only  evidence  before  the  ap- 
praiser was  an  affidavit  showing  that  the  value  of  the  stock  was 
$59.73  per  share,  and  he  placed  a  valuation  of  $100  upon  it. 
The  surrogate  said:  "The  contention  of  the  State  Comptroller 
in  the  statement  submitted  by  him  upon  this  appeal  that,  as 
the  stock  had  been  appraised  in  other  transfer  tax  proceedings 
at  $100  per  share,  the  appraiser  was  justified  in  appraising  it  in 
this  proceeding  at  $100,  is  untenable,  as  the  value  of  the  stock 
is  not  absolute  and  fixed  like  a  mathematical  quantity,  but 
varies  continually  with  the  varying  conditions  of  business,  the 
ease  or  stringency  of  the  money  market  and  the  public  demand 
for  the  stock.  As  this  stock  is  not  sold  upon  the  market  the 
appraiser  should  have  adopted  some  means  of  ascertaining  its 
real  value  if  he  was  not  satisfied  with  the  valuation  placed  upon 
it  hi  the  affidavit  submitted  by  the  executors."  Matter  of  Will- 
mer,  75  Misc.  62-66,  affirmed,  153  App.  Div.  804. 

(8)  The  basis  of  opinions  must  be  given 

Opinion  of  the  president  and  treasurer  of  the  company  as  to 


CLOSELY   HELD   STOCK  617 

the  value  of  the  stock  was  adopted  by  the  appraiser.  The  sur- 
rogate in  directing  a  new  appraisal  said,  "The  basis  of  these 
opinions  is  not  given,  and  there  is  virtually  no  foundation  for  the 
finding  of  the  appraiser."  Matter  of  Bolton,  35  Misc.  688-689. 
Comptroller  on  appeal  to  surrogate  sought  rehearing  for  pur- 
pose of  revaluation  of  certain  stock  not  having  "any  quoted  or 
market  value."  The  papers  filed  by  Comptroller  contained 
"conversations  with  brokers  and  others  in  regard  to  the  valua- 
tions of  these  stocks."  Rehearing  denied,  the  surrogate  saying, 
"there  is  nowhere  contained  in  the  appellant's  papers  a  specific 
fact,  or  statement  of  any  person  competent  to  judge  that  this 
stock  is  worth  one  dollar  more  than  the  sum  for  which  it  has 
been  appraised."  Matter  of  Johnson,  37  Misc.  542. 

(9)  Large  blocks  of  stock 

National  Casket  Company  stock  appraised  at  90.  The  book 
value  was  about  140,  of  which  a  portion  was  "water;"  deducting 
the  "water"  the  book  value  was  about  par.  Witness  for  estate 
testified  that  stock  could  perhaps  be  sold  at  60,  while  another 
witness  testified  that  highest  price  stock  had  sold  at  was  70.  The 
intestate  owned  3,219  shares.  The  court  say:  "The  fact  that 
there  was  not  a  ready  market  for  a  large  amount  of  the  stock 
has  a  direct  bearing.  There  is  an  entire  absence  of  anything  in 
the  record  to  justify  the  appraisal  of  this  stock  at  $90  per  share. 
The  amount  of  the  stock,  the  market  for  it  and  whether  a  large 
block  could  be  sold  are  elements  to  be  considered  in  fixing  its 
value."  Matter  of  Chappell,  151  App.  Div.  774-775.  As  to 
contrary  doctrine  vide  Matter  of  Jay  Gould,  19  App.  Div.  352- 
360,  affirmed  on  this  point  in  156  N.  Y.  423;  Matter  of  John 
S.  Kennedy,  supra,  page  115.  Vide  etiam  Matter  of  Curtice, 
185  N.  Y.  543,  supra,  page  325. 

(10)  Semon,  Bach  &  Co. 

In  Bach  Estate,  New  York  Law  Journal,  November  21,  1911, 
Surrogate  Fowler  handed  down  the  following  opinion:  "De- 
cedent died  in  November,  1909,  a  resident  of  the  County  of 
New  York.  At  the  time  of  his  death  he  owned  1,278  shares  of 
the  preferred  and  1,060  shares  of  the  common  stock  of  Semon, 
Bach  &  Co.  These  holdings  represented  a  majority  interest 
in  the  corporation.  In  the  affidavit  of  assets  submitted  to  the 
appraiser  by  the  executor  of  the  estate  the  value  of  the  common 
stock  was  given  at  $35  per  share.  The  expert  accountant  em- 
ployed by  the  State  Comptroller,  after  a  thorough  examination 


618  CLOSELY    HELD    STOCK 

of  the  books  of  the  company,  submitted  a  statement  showing 
that  the  intrinsic  value  of  the  common  stock  at  the  date  of 
decedent's  death  was  $73.59  a  share.  In  the  report  filed  by  the 
transfer  tax  appraiser  in  this  court  he  has  appraised  this  stock 
at  $20  a  share.  The  stock  was  not  listed  upon  any  exchange 
and  it  was  not  commonly  sold  upon  the  market.  It  paid  a 
dividend  of  15  per  cent,  in  1907  and  20  per  cent,  in  1909. 

(11)  Dividends  not  controlling,  but  may  be  taken  into  con- 
sideration 

"  No  dividends  were  paid  in  1908.  While  amount  of  dividends 
paid  on  a  stock  is  not  controlling  evidence  of  its  value  (Matter  of 
Smith,  71  App.  Div.  602;  Matter  of  Curtice,  111  App.  Div.  230, 
aff'd  185  N.  Y.  543),  it  may  be  taken  into  consideration  in 
estimating  the  value  of  a  stock  which  is  not  commonly  bought 
and  sold  in  the  open  market.  The  intrinsic  value  of  the  stock 
as  ascertained  by  the  expert  accountant  appears  to  be  a  con- 
servative estimate,  but  as  the  statute  requires  the  appraiser  to 
appraise  the  stock  at  its  clear  market  value  it  may  fairly  be 
assumed,  in  view  of  the  fact  that  the  decedent  took  an  active 
interest  in  the  management  of  the  company  and  had  an  estab- 
lished reputation  in  connection  with  the  business  conducted  by 
the  company,  that  the  market  value  of  this  block  of  stock  after 
his  death  would  be  slightly  less  than  the  book  value.  I  feel, 
therefore,  that  in  estimating  the  market  value  of  this  inactive 
stock  some  deduction  from  the  book,  or  intrinsic,  value  should 
be  made,  and  it  appears  to  me  that  twenty  points  would  be  a 
fair  deduction.  I  therefore  find  that  the  fair  market  value  of 
the  1,060  shares  of  common  stock  of  Semon,  Bach  &  Co.  held 
by  the  decedent  at  the  time  of  his  death  was  $53.59  a  share.  The 
appraiser's  report  will  be  remitted  to  him  for  correction  accord- 
ingly." 

Porous  Plaster  Company:  Stock  valued  at  400  per  cent,  the 
appraiser  placing  a  half  of  the  value  upon  certain  secret  rem- 
edies and  the  good  will;  the  stock  had  earned  and  paid  for 
seventeen  years  from  48  to  60  per  cent  upon  its  par  value, 
"while  the  earning  power  of  a  corporation  is  not  proof  of  the 
value  of  its  property,  nevertheless  it  is  competent  evidence 
of  value,  and  is  a  feature  to  be  considered  in  determining  the 
valuation  to  be  placed  upon  the  stock  for  the  purposes  of  taxa- 
tion." Matter  of  Brandreth,  28  Misc.  468-473,  supra,  page  255, 
affirmed,  169  N.  Y.  437. 


CLOSELY    HELD    STOCK  619 

In  Matter  of  Harriott,  N.  Y.  Law  Journal,  March  1,  1913, 
Surrogate  Fowler  dismissed  appeal  taken  by  executor,  saying: 
"The  ground  of  appeal  is  that  the  valuation  placed  by  the 
appraiser  on  the  common  stock  of  the  Pioneer  Contracting 
Company  was  excessive.  This  value  is  based  upon  the  report 
of  Marvin  L.  Scudder,  annexed  to  appraiser's  report,  and  in 
which  it  appears  that  $4,000  worth  of  common  stock  was  earning 
25%  per  annum.  On  this  basis  the  value  of  each  share  of  com- 
mon stock  was  fixed  at  $250.  The  findings  of  the  appraiser  as 
to  the  value  of  the  common  stock  was  correct  and  on  this  ac- 
count the  appeal  is  dismissed." 

(12)  In  the  absence  of  bona  fide  sales  the  book  value  may  be 
taken  as  basis  of  valuation 

In  Matter  of  Henry  C.  Valentine,  N.  Y.  Law  Journal, 
March  13,  1913,  Surrogate  Fowler  held:  "The  State  Comptroller 
appeals  from  the  order  fixing  tax,  and  alleges  that  the  value 
placed  by  the  appraiser  upon  the  decedent's  holdings  of  stock 
in  the  Valentine  Company  was  less  than  its  market  value,  while 
the  executor  appeals  upon  the  ground  that  the  appraiser's  valua- 
tion was  excessive.  The  decedent  died  on  the  15th  day  of  Jan- 
uary, 1912.  At  that  time  he  was  the  owner  of  2,636  shares  of  the 
stock  of  the  Valentine  Company.  The  entire  capital  stock  of 
the  company  consists  of  125,000  shares  of  the  par  value  of  $100  a 
share.  The  appraiser  valued  the  stock  at  $125.72  a  share.  The 
State  Comptroller  contends  that  he  should  have  valued  it  at 
$160.72  a  share,  while  the  executor  contends  that  the  valuation 
should  not  exceed  $100  a  share. 

"  The  stock  is  not  customarity  bought  and  sold  in  the  open 
market.  The  evidence  shows  that  none  of  the  stock  had  been 
sold  during  the  two  years  prior  to  decedent's  death.  There  was 
evidence  that  in  the  early  part  of  January,  1910,  the  holdings 
of  one  of  the  large  stockholders,  amounting  to  2,500  shares,  were 
transferred  to  some  of  the  other  large  stockholders  at  $90  a 
share.  The  length  of  time  which  elapsed  between  the  making 
of  this  sale  and  the  death  of  the  decedent,  as  well  as  the  peculiar 
circumstances  under  which  the  sale  took  place,  renders  the  price 
paid  at  that  time  no  satisfactory  criterion  of  the  value  of  the 
stock  at  the  date  of  decedent's  death  (Matter  of  Malcolmson, 
Surr.  Decs.,  1912,  p.  691).  As  there  was  no  competent  evidence 
of  sales  of  the  stock  the  appraiser  was  correct  in  ascertaining 
the  book  value  of  the  stock  from  the  assets  and  liabilities  of  the 


620  CLOSELY   HELD    STOCK 

company.  The  annual  statement  of  the  company  made  on  the 
30th  day  of  November,  1911,  showed  that  the  book  value  of  the 
stock  at  that  date  was  $129.04  a  share,  exclusive  of  the  value 
of  the  good  will.  While  the  book  value  of  the  stock  represents 
its  intrinsic  worth  it  may  not  represent  its  market  value,  and 
the  latter  is  that  which  it  is  the  duty  of  the  appraiser  to  ascertain. 
But  if  there  have  been  no  sales  of  the  stock  in  the  open  market 
he  must  necessarily  fall  back  upon  the  book  value  as  the  nearest 
approximation  to  the  market  value. 

"  In  ascertaining  the  value  of  securities  that  are  not  customa- 
rily bought  and  sold  in  the  open  market  it  would  seem  that  in 
the  absence  of  bona  fide  sales  the  book  value  of  the  assets  of  the 
corporation  should  be  taken  as  the  basis  of  computation.  The 
books  of  the  corporation  show  the  valuation  which  the  corpora- 
tion places  on  its  assets,  and  in  the  absence  of  evidence  that 
it  is  excessive  or  incorrect  it  should  be  taken  as  the  actual  value 
of  such  assets;  but  a  reasonable  percentage  should  be  deducted 
from  the  value  placed  upon  merchandise,  bills  receivable  and 
plants  in  order  to  ascertain  their  market  value.  In  the  absence 
of  competent  evidence  upon  this  point  such  deduction  should 
not  exceed  ten  per  cent.  This  rule  has  the  advantage  of  mathe- 
matical certainty;  and  when  to  the  book  value  as  thus  ascer- 
tained is  added  the  value  of  the  good  will  of  the  business,  the 
result  very  closely  approximates  the  market  value  of  the  stock. 
The  opinions  of  stockholders  and  such  witnesses  are  usually 
speculative,  and  vary  so  materially  as  to  render  it  difficult  for 
the  appraiser  to  ascertain  the  market  value  based  upon  such 
evidence.  Deducting  ten  per  cent  from  the  book  value  of  the 
plant,  merchandise  and  bills  receivable,  and  taking  into  con- 
sideration the  change  effected  in  the  cash  account  as  shown  by 
the  testimony  of  Phillips,  it  appears  that  the  book  value  of  the 
stock  at  the  date  of  decedent's  death  was  $112.18  a  share,  ex- 
clusive of  the  value  of  the  good  will.  The  average  annual  net 
profits  for  the  three  years  immediately  preceding  decedent's 
death  was  $198,064.38,  and  the  appraiser  ascertained  the  value 
of  the  good  will  by  multiplying  this  average  by  two. 

(13)  Goodwill 

"  In  view  of  the  fact  that  the  business  has  been  conducted  un- 
der the  same  name  since  1832  this  would  seem  a  very  reasonable 
value  for  the  good  will  of  the  business.  In  Von  Au  v.  Magen- 
heimer  (126  App.  Div.  257)  the  value  of  the  good  will  was  found 


CLOSELY   HELD    STOCK  621 

to  be  five  times  the  average  net  annual  profits.  In  the  Matter 
of  Keahon  (60  Misc.  508)  the  value  of  the  good  will  was  fixed 
at  three  times  the  net  annual  profits.  As  the  appraiser  ascer- 
tained the  value  of  the  good  will  to  be  twice  the  average  net 
annual  profits,  he  should  have  taken  the  average  profits  for  the 
two  years  immediately  preceding  the  decedent's  death  instead 
of  the  three  years.  This  would  make  the  value  of  the  good  will 
$383,308,  or  about  $30.66  a  share.  According  to  this  method  of 
calculation  the  value  of  each  share  of  stock  at  the  time  of  de- 
cedent's death  was  $142.84.  The  annual  statement  for  1911 
shows  that  after  providing  for  a  dividend  of  ten  per  cent,  there 
was  a  surplus  of  about  $16  a  share.  The  appraiser,  after  ascer- 
taining the  book  value  of  the  stock,  arbitrarily  deducted  there- 
from 35  points  and  found  that  the  remainder  was  its  market 
value.  There  appears  to  be  no  justification  for  such  a  deduction. 
There  was  no  evidence  that  the  decedent's  personality  or  busi- 
ness ability  was  in  any  way  responsible  for  the  success  which 
the  company  had  achieved.  The  amount  which  the  company 
intended  to  expend  for  advertising  purposes  during  the  year 
1912  should  not  be  taken  into  consideration,  as  it  is  reasonable 
to  assume  that  such  advertising  would  not  be  an  absolute  loss, 
but  would  result  in  a  corresponding  increase  in  the  business  of 
the  company.  The  other  possible  sources  of  increased  expenses 
are  too  remote  to  be  taken  into  consideration  in  ascertaining  the 
value  of  the  stock  at  the  date  of  decedent's  death.  From  the 
appraiser's  report  and  all  the  evidence  adduced  before  him  I 
find  that  the  value  of  the  decedent's  holdings  of  stock  in  the 
Valentine  Company  at  the  date  of  his  death  was  $142.84  a  share. 
The  order  fixing  tax  will  be  reversed  and  the  appraiser's  report 
remitted  to  him  for  correction." 

The  shares  of  "New  York  Times,"  a  joint  stock  association, 
held  to  be  properly  valued  by  appraiser  who  included  GOOD  WILL 
in  the  "Times."  Vide  Matter  of  Jones,  69  App.  Div.  237-244, 
reversed  on  other  points  in  172  N.  Y.  575,  the  Court  of  Appeals 
saying  at  page  586:  "These  shares  were  not  listed  upon  the 
Stock  Exchange,  or  sold  in  the  open  market,  and  the  only  way 
to  get  at  their  value  was  to  ascertain  the  property  they  repre- 
sented." Vide  cases  cited  sub  Good  Will. 

(14)  Sale  from  one  officer  of  corporation  to  another  does  not 

necessarily  establish  "  market  value  " 
Upon  the  filing  of  the  appraiser's  second  report  in  MATTER 


622  CLOSELY   HELD    STOCK 

OP  HENRY  C.  VALENTINE,  Surrogate  Fowler  held  (N.  Y.  Law 
Journal,  December  4,  1913) :  "This  matter  was  sent  back  to  the 
appraiser  for  the  purpose  of  taking  further  testimony  concerning 
the  value  of  the  testator's  stock  in  Valentine  &  Co.  (incor- 
porated). Such  testimony  has  been  taken,  but  it  throws  very 
little  light  on  the  issue;  it  is  not  satisfactory.  Prima  fade  the 
book  value  is  evidence  against  the  holder  of  stock.  The  pre- 
sumption may  be  rebutted  by  proof  of  'market  value.'  A  sale 
of  stock  from  one  officer  of  a  business  corporation  to  another 
officer  or  stockholder  does  not  establish  '  market  values.'  There 
may  be  no  'market  value'  for  the  stock  of  private  business 
corporations.  In  that  event  the  falsity  of  the  book  value  must 
be  shown  in  other  ways,  such  as  an  actual  appraisal  of  the 
property  of  the  corporation.  Here  no  evidence  is  submitted  in 
the  nature  of  an  appraisal  of  the  items  of  property  belonging 
to  the  corporation.  Our  former  decision  in  this  matter  must 
therefore  be  affirmed." 

(16)  Valuation  of  bonds 

LUDWIG  BAUMANN  &  Co.,  a  corporation  engaged  in  the 
business  of  selling  furniture  on  the  installment  plan,  upon  its 
organization  as  a  corporation  issued  bonds  for  the  amount  by 
which  the  assets  of  the  business  (then  being  conducted  as  a 
partnership)  exceeded  its  liabilities.  The  valuation  of  these 
bonds  was  involved  in  the  MATTER  OF  FROELICH,  N.  Y.  Law 
Journal,  April  30,  1913,  the  decedent  owning  295  of  the  bonds. 
Surrogate  Fowler  remitted  the  report  of  the  appraiser  for  the 
purpose  of  obtaining  additional  evidence,  saying  in  his  opinion: 
"These  bonds  bear  interest  at  3%  when  earned,  but  the  resolu- 
tion authorizing  the  issue  of  the  bonds  was  not  introduced  in 
evidence,  nor  were  the  books  of  the  company  nor  any  duly 
authenticated  extracts  therefrom  submitted  to  the  appraiser. 
This  allegation  as  to  the  rate  of  interest  is  supported  solely  by 
the  testimony  of  a  witness  who  appeared  on  behalf  of  the  estate, 
and  in  view  of  the  low  rate  of  interest  as  well  as  the  unusual 
condition  upon  which  its  payment  depends  the  testimony  of 
the  witness  would  seem  to  require  that  corroboration  which 
would  be  furnished  by  the  introduction  in  evidence  of  the 
resolution  authorizing  the  issue  of  the  bonds. 

"As  THE  BONDS  WERE  NOT  CUSTOMARILY  BOUGHT  AND  SOLD  IN 

THE  OPEN  MARKET  their  value  for  the  purpose  of  the  imposition 
of  a  transfer  tax  should  be  ascertained  with  reference  to  the  value 


CLOSELY   HELD    STOCK  623 

of  the  assets  upon  which  they  are  a  lien,  as  well  as  the  rate  of  in- 
terest which  they  bear.  A  memorandum  was  submitted  to  the 
appraiser  purporting  to  be  a  statement  of  the  assets  and  liabili- 
ties of  the  company  at  the  time  of  decedent's  death.  This  state- 
ment on  its  face  indicates  that  the  value  of  the  assets  is  in  excess 
of  the  bonded  indebtedness;  but  an  officer  of  the  company  testi- 
fied before  the  appraiser  that  the  value  of  the  assets  as  given  in 
the  statement  referred  to  was  considerably  in  excess  of  their  ac- 
tual value.  He  testified  that  the  merchandise  on  hand  instead 
of  being  worth  $235,569,  as  given  on  the  statement,  was  worth 
only  $170,569;  that  the  value  of  the  bills  receivable  instead  of 
being  $816,871  was  only  $283,435.  He  also  testified  that  the 
book  value  of  the  merchandise  represented  its  cost  to  the 
company. 

"The  allegation  that  it  was  worth  $60,000  less  than  its  cost 
should  be  supported  by  the  testimony  of  an  expert  or  corrob- 
orated by  the  books  of  the  company  showing  the  amount 
realized  from  the  sale  of  this  merchandise.  The  value  of  the 
accounts  receivable  as  given  by  the  witness  was  not  verified  by 
any  reference  to  the  books  of  the  company  or  by  any  statement 
of  the  amount  actually  collected.  As  the  books  of  the  company 
were  the  best  evidence  of  the  value  which  the  company  placed 
upon  its  assets  as  well  as  the  amount  actually  realized  from  the 
bills  receivable  account,  they  should  have  been  introduced  in 
evidence  for  the  purpose  of  proving  these  facts.  While  one  of 
the  witnesses  testified  that  the  value  of  the  accounts  receivable 
was  about  one-third  of  their  book  value,  another  witness  testified 
that  only  12%  of  the  accounts  became  a  total  loss  and  8%  be- 
came uncollectible  after  a  certain  amount  of  collections  had 
been  made  thereon.  No  ATTEMPT  WAS  MADE  TO  RECONCILE 
THESE  CONFLICTING  STATEMENTS.  As  the  appraisal  was  made 
about  two  years  after  the  death  of  the  decedent,  the  books 
of  the  company  would  show  what  amounts  were  realized  from 
the  accounts  receivable  and  what  amount  was  realized  from 
the  merchandise  on  hand  at  the  time  of  decedent's  death.  If, 
however,  it  would  be  inconvenient  to  have  the  books  introduced 
in  evidence  before  the  appraiser  they  should  be  examined  by  an 
expert  accountant  in  order  to  ascertain  with  reasonable  accuracy 
the  value  of  the  assets  of  the  company.  No  witnesses  were 
examined,  nor  was  there  any  evidence  adduced  on  behalf  of  the 
State  Comptroller. 

u  THE  INDEFINITE  AND  INCOMPETENT  TESTIMONY  taken  before 


G24  CLOSELY   HELD    STOCK 

the  appraiser,  and  constituting  that  part  of  his  report  upon 
which  the  surrogate  must  depend  for  the  facts  necessary  to  a 
determination  of  the  correctness  of  the  appraiser's  conclusions, 
is  entirely  insufficient  to  enable  the  surrogate  to  determine  the 
question  raised  by  this  appeal.  The  report  of  the  appraiser, 
therefore,  will  be  remitted  to  him  for  the  purpose  of  obtaining 
additional  evidence  as  to  the  value  of  the  assets  of  Ludwig 
Baumann  &  Co.  at  the  time  of  decedent's  death." 

(16)  Pulitzer  Estate 

In  Matter  of  Joseph  Pulitzer,  N.  Y.  Law  Journal,  Decem- 
ber 10,  1912,  Surrogate  Cohalan  in  remitting  the  report  of  the 
appraiser  said:  "Among  the  items  of  personal  property  are  the 
following:  Four  thousand  nine  hundred  and  ninety  shares  of 
the  Press  Publishing  Company,  par  $100  per  share,  appraised 
at  $604.50  per  share,  $3,016,455;  9164  shares  of  the  Pulitzer 
Publishing  Company,  par  $100  per  share,  appraised  at  $121.75, 
$1,115.717. 

PRESS  PUBLISHING  COMPANY. 

"  Among  the  affidavits  submitted  to  the  transfer  tax  appraiser 
in  regard  to  the  value  of  this  stock  appears  one  of  Mr.  N.  H. 
Hotsford,  auditor  of  the  Press  Publishing  Company,  publisher 
of  the  New  York  World,  dated  January  29,  1912,  in  which  he 
states  that  the  net  profits  of  the  Press  Publishing  Company 
for  the  year  1908  were  $333,673;  for  the  year  1909  were  $662.391 ; 
for  the  year  1910  were  $702,3,74;  for  the  year  1911  were  $552,883; 
total  $2,251,321.  From  this  net  total  the  appraiser  deducted 
$105,000  alleged  to  have  been  paid  as  bonuses  to  employees  of 
the  newspaper.  The  nature  of  these  bonuses,  whether  gifts  or 
contractual  obligations,  is  not  shown.  Assuming  these  bonuses 
to  have  been  voluntary  contributions  to  the  employees  of  the 
newspaper,  in  my  opinion  they  have  been  erroneously  deducted, 
and  the  net  profits  for  the  four  years  should  be  placed  at 
$2,251.321  instead  of  $2,146,321.  This  would  make  the  aver- 
age net  profits  for  the  four  years  preceding  decedent's  death 
$562,830.25  instead  of  $536,580,  as  shown  in  the  report  of  the 
transfer  tax  appraiser. 

PULITZER  PUBLISHING  COMPANY. 

"The  affidavit  of  James  T.  Keller,  auditor  and  treasurer  of 
the  Pulitzer  Publishing  Company  of  St.  Louis,  Mo.,  the  pub- 
lisher of  the  St.  Louis  Despatch,  dated  January  19,  1912,  shows 
that  the  net  profits  of  that  corporation  for  the  year  1908  were 


CLOSELY   HELD    STOCK  625 

$350,380.89;  for  the  year  1909  were  $441,823;  for  the  year  1910 
were  $470,761.46;  for  the  year  1911  were  $370,862.12,  making 
a  total  of  $1,633,827.87,  an  average  of  net  profits  for  each  of 
said  four  years  of  $408,456.97. 

ASSOCIATED  PRESS. 

"Among  the  assets  of  the  Press  Publishing  Company  are 
two  shares  of  stock  in  the  Associated  Press,  and  among  the 
assets  of  the  Pulitzer  Publishing  Company  of  St.  Louis,  Mo.,  was 
one  share  of  stock  in  the  Associated  Press.  These  shares  of 
stock  were  appraised  in  each  case  at  their  face  value  of  $1,000 
per  share,  and  the  only  testimony  regarding  their  value  is  that 
of  Mr.  Melville  E.  Stone,  who  testifies  that  this  is  the  par  value 
of  said  stock. 

SURROGATE  HOLDS  THAT  SECURITIES  UNDERVALUED. 

"In  view  of  the  fact  that  the  net  earnings  of  the  Press  Pub- 
lishing Company,  without  deducting  the  bonuses  of  $105,000 
from  the  earnings  for  1911,  averaged  $562,830,  and  deducting 
such  alleged  bonuses  would  average  $536,580  for  each  of  the 
four  years  preceding  decedent's  death,  indicating  a  return  of 
almost  19  per  cent,  on  $3,016,455,  the  appraised  value  of  this 
stock,  and  the  further  fact  that  the  average  yearly  net  earnings 
for  the  four  years  preceding  the  decedent's  death  on  the  stock 
of  the  Pulitzer  Publishing  Company  of  St.  Louis,  Mo.,  were 
$408,456.97,  indicating  a  return  of  almost  37  per  cent,  on 
$1,115,717,  the  appraised  value  of  said  stock,  and  in  view  of 
the  fact  that  the  par  value  of  said  stock  was  taken  as  the  ap- 
praised value  of  said  Press  Publishing  Company's  and  Pulitzer 
Publishing  Company's  holdings  of  the  stock  of  the  Associated 
Press,  the  stock  without  which  any  newspaper  published  in 
New  York  City  and  claiming  to  be  first  class  in  its  rank  could 
not  well  exist,  it  is  quite  apparent  that  these  several  securities 
have  been  grossly  undervalued,  possibly  to  the  extent  of  many 
millions  of  dollars,  for  on  a  5  per  cent,  basis  of  earning  power 
the  holdings  of  decedent's  estate  in  the  stock  of  the  Press  Pub- 
lishing Company  should  be  appraised  at  upwards  of  $11,000,000 
instead  of  $3,016,455,  while  the  holdings  of  decedent's  estate 
in  the  Pulitzer  Publishing  Company  on  the  same  basis  of  earning 
power  should  be  appraised  at  upwards  of  $8,000,000  instead  of 
$1,115,717.  If  these  properties  were  figured  on  a  10  per  cent. 
basis  of  earning  power  the  value  of  the  estate's  holdings  in  the 
Press  Publishing  Company  would  be  upwards  of  $5,500,000, 
and  the  value  of  the  holdings  in  the  Pulitzer  Publishing  Com- 
40 


626  CLOSELY   HELD   STOCK 

pany  of  St.  Louis  would  be  upwards  of  $4,000,000.  Bearing 
all  this  in  mind,  coupled  with  the  circumstances  that  no  wit- 
nesses were  called  on  behalf  of  the  State  to  contradict  any  of  the 
testimony  offered  on  behalf  of  the  estate  of  the  decedent,  it 
seems  to  me  that  the  report  should  be  remitted  to  the  appraiser 
for  further  and  fuller  testimony  along  the  lines  now  criticised. 

PERSONALITY  OF  JOSEPH  PULITZER. 

"It  is  contended  on  behalf  of  the  estate  that  the  personality 
of  Joseph  Pulitzer  was  in  a  great  measure  responsible  for  the 
earning  capacity  of  these  two  newspapers,  and  that  his  death 
greatly  reduced  such  earning  capacity.  If  this  contention  is 
made  in  good  faith  it  would  be  very  easy  for  the  estate  to  show 
the  earnings  of  these  two  newspapers  for  the  year  since  dece- 
dent's death,  but  no  testimony  of  this  kind  was  offered." 

(17)  Stocks  listed  on  local  exchange 

Rochester  Stock  Exchange  market  quotations  were  offered 
as  valuations  of  stock.  In  the  case  of  stock  not  listed  the  wit- 
ness on  behalf  of  the  estate  gave  his  opinion  as  to  values;  it 
does  not  appear  from  report  as  to  qualification  of  witness  except 
that  witness  "gave  his  own  opinion  or  sought  information  from 
interested  parties  who  were  conversant  with  the  affairs  of  such 
corporation,  and  from  such  information  fixed  the  value  as  to 
such  stock.  He  also  testified  that,  if  these  stocks  were  offered 
for  immediate  sale,  the  price  would  drop  from  ten  to  fifty  points, 
but  he  further  testified  'It  would  take  at  least  a  month  or  six 
weeks  to  close  out  these  stocks  at  the  prices  I  have  quoted  in  the 
inventory.'"  The  appraiser  fixed  the  valuations  upon  the 
market  price  of  the  Rochester  Exchange,  and  in  the  instances 
where  the  stock  was  not  listed,  the  appraiser  fixed  the  valuation 
substantially  on  the  valuation  given  by  the  witness  called  for 
the  executors.  The  executors  appealed  on  the  ground  that  the 
valuations  should  be  reduced  by  ten  per  cent  "for  the  reason 
that  the  stocks  included  in  said  appeal  are  local  stocks  and  not 
listed  on  any  stock  market  other  than  the  Rochester  Stock  Ex- 
change." Surrogate  Kiley  sustained  the  appraiser,  and  held 
that  the  Curtice  case,  111  App.  Div.  230  (affirmed,  without 
opinion,  185  N.  Y.  543),  did  not  apply,  as  the  stocks  in  question 
"although  local  stocks  are  not  stocks  that  could  be  classed  as 
stocks  of  private  corporations  or  as  corporations  largely  owned 
by  one  family."  The  surrogate  further  saying,  "there  is  no 
evidence  that  Mr.  Cook's  interest  therein  was  so  large  as  to 


CLOSELY   HELD    STOCK  627 

affect  the  market  values  of  the  stock."  Matter  of  Cook,  50 
Misc.  487-493-4,  decree  affirmed  in  187  N.  Y.  253-262,  except 
as  to  rate  of  taxation  for  transfer  to  a  child  of  an  adopted  child. 

(18)  Inactive  securities  that  are  customarily  bought  and  sold 
in  the  open  market 

Surrogate  Fowler  in  Matter  of  Josephine  B.  Chambers,  N.  Y. 
Law  Journal,  January  31,  1912,  held  that  for  the  purpose  of 
assessing  a  transfer  tax,  the  value  of  inactive  securities  that  are 
customarily  bought  and  sold  in  the  open  market  is  the  average 
price  at  which  sales  of  such  securities  have  been  made  for  three 
months  before  and  three  months  after  decedent's  death.  In  his 
opinion  the  surrogate  said:  "This  appeal  from  the  order  fixing 
tax  is  taken  by  the  executor  and  trustee  of  decedent's  estate 
upon  the  ground  that  the  appraiser  erred  in  estimating  the  value 
of  1,208  shares  of  stock  of  the  Singer  Manufacturing  Company 
held  by  the  decedent.  The  appraiser  valued  this  stock  at  $481. 
The  executor  contends  that  the  stock  at  the  date  of  decedent's 
death  was  worth  only  $400. 

The  decedent  died  on  the  10th  day  of  November,  1909.  The 
only  evidence  adduced  by  the  executor  to  show  the  value  of  this 
stock  is  an  affidavit  of  John  S.  Stanton,  in  which  he  alleges  that 
two  shares  of  the  stock  were  sold  on  November  8,  1909,  at  $472 
a  share,  and  two  shares  on  the  3d  of  August  at  $455  a  share. 
This  affiant  also  alleges  that  it  would  have  been  impossible  at 
the  date  of  decedent's  death  to  have  realized  the  above  prices 
for  so  large  a  block  of  stock  as  1,208  shares,  and  that  hi  his  opin- 
ion the  market  value  of  the  shares  at  the  date  of  decedent's 
death  was  $400  per  share.  The  attorney  for  the  State  Comp- 
troller submitted  an  affidavit  by  one  Marvyn  Scudder,  who 
alleged  that  from  investigations  made  by  him  he  considered  that 
the  fair  market  value  of  the  stock  at  the  date  of  decedent's 
death  was  $484  per  share.  Attached  to  the  appraiser's  report 
and  submitted  on  behalf  of  the  State  Comptroller  are  certain 
statements  made  by  Scudder.  These  statements,  however,  are 
not  verified  and  should  not  have  been  received  by  the  appraiser. 
They  are  therefore  not  entitled  to  any  consideration  in  a  pro- 
ceeding to  determine  the  value  of  this  stock. 

"  No  statement  of  assets  and  liabilities  of  the  Singer  Manufac- 
turing Company  was  submitted  to  the  appraiser,  but  it  appears 
that  the  dividend  paid  in  1909  was  30  per  cent,  and  in  1908  15 
per  cent.  Upon  this  appeal  an  affidavit  was  submitted  by 


628  CLOSELY   HELD    STOCK 

George  F.  Martin,  the  examiner  of  values  in  the  New  York  City 
office  of  the  State  Comptroller.  He  alleges  that  ten  shares  of 
stock  of  the  Singer  Manufacturing  Company  were  sold  on  Sep- 
tember 28,  1909,  at  $471  per  share;  that  four  shares  were  sold 
on  October  21,  1909,  at  $475  a  share;  that  five  shares  were  sold 
on  November  16, 1909,  at  $484  per  share,  and  that  seven  shares 
were  sold  on  December  13, 1909,  at  $494  per  share.  The  average 
selling  price,  based  upon  these  sales,  would  be  $481,  the  price 
adopted  by  the  appraiser.  This,  however,  does  not  include  the 
two  shares  of  stock  reported  by  Mr.  Stanton  to  have  been  sold 
on  November  8  at  $472. 

(19)  §  122  of  Decedent  Estate  Law  as  applied  to  compara- 
tively inactive  securities 

"  Section  122  of  the  Decedent  Estate  Law  provides  that 
'whenever  by  reason  of  the  provisions  of  any  law  of  this  State  it 
shall  become  necessary  to  appraise  in  whole  or  in  part  the  estate 
of  any  deceased  person,  the  persons  whose  duty  it  shall  be  to 
make  such  appraisal  shall  value  *  *  *  all  such  property, 
stocks,  bonds  or  securities  as  are  customarily  bought  or  sold  in 
open  markets  in  the  City  of  New  York  or  elsewhere,  for  the  day 
on  which  such  appraisal  or  report  may  be  required,  by  ascertain- 
ing the  range  of  the  market  and  the  average  of  prices  as  thus 
found,  running  through  a  reasonable  period  of  time.  The  affi- 
davits submitted  by  both  parties  show  that  while  the  stock  of  the 
Singer  Manufacturing  Company  is  not  listed  upon  the  New  York 
Stock  Exchange  it  is  nevertheless  customarily  bought  and  sold 
in  the  open  market.  Therefore  it  comes  within  the  classification 
of  securities  the  manner  of  whose  appraisal  is  prescribed  by 
the  section  of  the  Decedent  Estate  Law  above  quoted. 

"It  was  held  by  this  court  in  the  Matter  of  Kennedy  (N.  Y. 
Law  Jour.,  March  8,  1911)  that  the  price  of  active  securities 
should  be  ascertained  by  taking  the  average  price  for  two  months 
before  and  two  months  after  decedent's  death,  while  the  price 
of  comparatively  inactive  securities  should  be  ascertained  by 
computing  the  average  price  at  which  the  securities  sold  within  11 
reasonable  time  before  and  after  decedent's  death.  What  con- 
stitutes a  reasonable  time  would  appear  to  depend  upon  the 
demand  for  the  stock  as  evidenced  by  the  number  of  sales  made. 
If  a  range  of  two  months  before  and  two  months  after  decedent's 
death  would  be  a  reasonable  time  in  which  to  ascertain  the  value 
of  active  securities,  as  held  in  the  Matter  of  Kennedy  (supra), 


CLOSELY   HELD    STOCK  629 

it  would  appear  that  a  range  of  three  months  before  and  three 
months  after  decedent's  death  would  be  a  reasonable  time  in 
which  to  compute  the  value  of  inactive  securities  that  are  cus- 
tomarily bought  and  sold  on  the  market. 

"The  question  of  the  value  of  the  Singer  Manufacturing  Com- 
pany stock  was  before  the  Surrogate's  Court  of  Sullivan  County 
in  1903  upon  an  appeal  from  an  order  fixing  tax.  In  that  matter 
there  was  evidence  before  the  appraiser  that,  according  to  re- 
ports in  the  Financial  Chronicle,  the  stock  was  worth  from  $240 
to  $250  at  the  date  of  decedent's  death  in  1902.  Mr.  Stanton, 
whose  affidavit  on  behalf  of  the  executor  forms  part  of  the  ap- 
praiser's report  in  the  matter  under  consideration,  testified  that 
during  the  year  1902  the  price  ranged  from  $238  to  $300.  An- 
other witness  testified  that  in  his  opinion  the  value  of  the  stock 
was  $245.  The  surrogate  held  that  the  appraiser  was  correct 
in  appraising  the  stock  at  $245  a  share,  and  no  appeal  was  taken 
from  his  order  (Matter  of  Proctor,  41  Misc.  79). 

"  In  the  Matter  of  Curtice  (111  App.  Div.  230,  aff'd  185  N.  Y. 
543)  there  was  before  the  court  the  question  as  to  the  value  of 
the  stock  of  a  corporation  known  as  Curtice  Brothers  Company. 
It  was  a  private  family  corporation  engaged  in  the  manufacture 
of  jellies,  &c.  It  was  not  dealt  in  upon  any  market  or  exchange, 
except  that  a  few  sales  had  been  reported  as  having  been  made 
at  Rochester  during  the  year  previous  to  decedent's  death. 
Immediately  after  decedent's  death  there  was  a  bid  quotation  of 
$110  for  the  common  and  a  reported  sale  of  ten  shares  of  the 
preferred  at  107 J^.  The  appraiser  valued  decedent's  holdings 
of  the  preferred  and  common  stock  at  these  figures.  Two  wit- 
nesses testified  that  in  their  opinion  the  value  of  the  preferred 
was  $90  and  the  common  $80  per  share.  There  was  no  state- 
ment of  the  assets  and  liabilities  of  the  company.  The  Appel- 
late Division  modified  the  order  of  the  surrogate  by  reducing 
the  value  of  the  common  to  $100  per  share  and  the  preferred  to 
$97.50  per  share.  It  is  apparent  from  this  decision  that  no 
definite  rule  by  which  the  price  of  such  securities  could  be  as- 
certained was  enunciated  by  the  Appellate  Division  in  that  case. 
It  is,  however,  distinguishable  from  the  matter  under  consider- 
ation in  the  fact  that  it  was  a  small  corporation,  capitalized  at 
$1,500,000  and  controlled  by  one  family,  while  the  Singer  Manu- 
facturing Company  was  at  the  time  of  decedent's  death  capital- 
ized at  $30,000,000;  and  in  the  further  fact  that  the  stock  of  the 
Singer  Manufacturing  Company  is  customarily  bought  and  sold 


CLOSELY    HELD    STOCK 

in  the  open  market.  The  allegation  in  the  affidavit  of  John  S. 
Stanton  that  the  attempt  to  dispose  of  1,208  shares  of  the  Singer 
Manufacturing  Company  stock  at  the  date  of  decedent's  death 
would  cause  a  material  reduction  in  the  price,  should  not  be 
considered  by  the  appraiser  in  estimating  the  fair  market  value 
of  this  stock  at  the  date  of  decedent's  death  (Matter  of  Gould, 
19  App.  Div.  352;  Matter  of  Proctor,  41  Misc.  79;  Matter  of 
Kennedy,  N.  Y.  Law  Jour.,  March  8,  1911). 

"  Adopting  the  rule  that  the  average  price  of  this  compara- 
tively inactive  security  for  three  months  before  and  three  months 
after  decedent's  death  would  represent  its  fair  market  value 
upon  the  date  of  decedent's  death,  it  would  appear  that  the 
total  number  of  sales  made  during  that  time,  according  to  the 
affidavits  of  George  F.  Martin  and  John  S.  Stanton,  were 
twenty-eight  shares  at  an  aggregate  value  of  $13,432.  This 
would  represent  an  average  price  of  $480  per  share.  The  ap- 
praiser having  appraised  the  1,208  shares  of  Singer  Manufactur- 
ing Company  stock  held  by  the  decedent  at  $481  per  share,  his 
report  should  be  corrected  by  appraising  these  shares  at  $480. 

"  As  the  value  of  the  temporary  life  estate  of  decedent's  son 
in  the  entire  estate  must  be  ascertained  by  the  State  Superin- 
tendent of  Insurance,  the  order  fixing  tax  cannot  be  modified 
by  the  Surrogate  upon  this  appeal,  but  the  appraiser's  report 
should  be  remitted  to  him  for  correction  as  indicated,  and  for  the 
further  purpose  of  ascertaining  the  value  of  the  temporary  life 
estate  of  decedent's  son  in  the  entire  estate  as  shown  by  the 
appraiser's  corrected  report." 

Singer  Manufacturing  Company  stock  was  also  appraised  in 
Matter  of  Proctor,  41  Misc.  79.  The  executors  contended  that 
the  stock  had  no  market  value  at  the  time  of  decedent's  death, 
April  8,  1902,  and  that  the  book  value  alone  should  control  its 
appraisal.  Surrogate  Smith  of  Sullivan  County  upheld  the  ap- 
praiser's valuation  at  245,  saying:  "The  evidence  shows  that 
where  there  is  a  market  for  this  at  all  times  and  that  it  is  quoted 
in  the  financial  publications  and  authorities,  although  it  is  not 
listed  on  the  New  York  Stock  Exchange  and  is  not  bought  and 
sold  in  the  Curb  market.  While  the  stock  was  very  inactive 
and  the  sales  infrequent,  and  mostly  of  a  private  nature,  still 
they  were  sufficient  to  establish  a  market  value  for  the  purpose 
of  taxation.  The  sales  were  made  in  the  regular  and  usual 
course  of  business,  and  some  of  them  at  public  auction.  It  is 
not  necessary  that  sales  of  this  class  of  property  should  be  made 


CLOSELY   HELD    STOCK  631 

upon  the  exchanges.  The  question  to  determine  is:  What  is  the 
fair  market  value  of  this  property?  And  any  evidence  which  will 
tend  to  throw  light  upon  that  inquiry  is  competent.  The  opin- 
ions of  witnesses  qualified  to  answer;  the  price  quotations  con- 
tained in  market  reports  and  authentic  publications;  the  prices 
established  by  actual  sales  of  the  property,  and  in  the  absence 
of  other  competent  evidence  the  actual  or  intrinsic  value  of  the 
property  itself.  The  executors  complain  that  the  sales  were  so 
infrequent  and  insignificant,  and  the  opinions  of  the  witnesses 
were  based  upon  such  unreliable  information  as  to  be  incom- 
petent upon  this  question.  The  evidence  is  not  as  satisfactory  as 
we  might  wish,  but  it  is  all  that  has  been  given;  and  all  it  seems, 
that  could  be  obtained.  Nor  can  it  be  said  that  the  trades 
shown  by  the  evidence  were  so  trifling  and  insignificant  as  to 
be  of  no  assistance  in  determining  the  value  of  the  stock.  The 
sale  on  April  14,  six  days  subsequent  to  the  decedent's  death,  of 
105  shares  at  245j/£,  amounted  to  upwards  of  $25,000,  and  the 
several  sales  of  10  and  20  share  lots  would  run  up  to  several 
thousand  dollars.  I  think,  under  the  testimony,  that  this  stock 
is  one  that  was  customarily  bought  and  sold  in  the  open  market, 
and  that  its  market  value  was  at  least  245  at  the  decedent's 
death.  The  appraiser  was  not  confined  to  sales  of  the  stock 
made  previous  to  decedent's  death.  Upon  the  question  of  mar- 
ket value  evidence  of  sales  for  a  reasonable  time  after,  as  well  as 
before,  the  day  on  which  it  was  to  be  determined,  is  admissible. 
Nor  is  the  question  affected  by  reason  of  the  fact  that  large 
blocks  of  the  stock  being  offered  at  one  time  would  break  the 
market.  Dana  v.  Fiedler,  12  N.  Y.  40.  The  book  value  of  the 
stock  as  shown  by  the  executors,  viz. :  The  value  of  the  capital 
stock  at  par  and  the  undistributed  surplus  would  not  form  a 
proper  basis  of  value  of  this  property.  Assuming  that  the  con- 
tention of  the  executors  is  correct,  that  the  stock  has  no  market 
value,  it  is  nevertheless  taxable.  Matter  of  Brandreth,  28  Misc. 
Rep.  468.  And  in  such  case  the  appraiser  must  ascertain  the 
actual  value  of  the  property,  taking  into  consideration  the 
earning  power  of  the  property  and  the  good-will  of  the  busi- 
ness. *  *  *  Had  the  executors  given  evidence  showing, 
not  only  the  book  value  of  the  stock  based  upon  the  amount  of 
the  capital  and  surplus,  but  the  actual  earning  capacity  of  the 
plant  and  the  good  will  of  the  business,  we  might  have  been  con- 
strained to  abandon  the  speculative  field  of  market  value,  but 
having  shown  no  facts  from  which  the  actual  value  of  the  stock 


032  CODE    OF   CIVIL   PROCEDURE 

can  be  determined,  I  think  the  appraiser  was  justified  in  his 
determination  that  it  had  a  market  value,  and  that  in  the  light 
of  all  the  evidence  his  valuation  is  very  favorable  to  the 
estate." 

CODE  OF  CIVIL  PROCEDURE 

§  190.  Appeal  to  Court  of  Appeals  dismissed  unless  order 
appealed  from  final.  Matter  of  Browne,  195  N.  Y.  522;  Matter 
of  Vivanti,  200  N.  Y.  513. 

§  191.  Appeal  to  Court  of  Appeals  limited  to  a  review  of 
questions  of  law.  Matter  of  Thome,  162  N.  Y.  238;  Matter  of 
Mahlstedt,  171  N.  Y.  652. 

§382.  Re  statute  of  limitations.  Matter  of  Strang,  117 
App.  Div.  796-797;  Matter  of  Moench,  39  Misc.  480-482;  §  245 
of  Tax  Law. 

§  447.  Re  action  affecting  real  estate  upon  'which  there  is 
"a  lien  under  the  transfer  tax  act." 

§  784.  Time  to  appeal  cannot  be  extended  by  court  or  judge. 
Matter  of  Seymour,  144  App.  Div.  151-152. 

§  829.  Matter  of  Gould,  19  App.  Div.  352-355,  modified  in 
156  N.  Y.  423,  but  not  as  to  ruling  re  §  829;  Matter  of  Brundage, 
31  App.  Div.  348;  Matter  of  Nathaniel  W.  White,  116  App. 
Div.  183-185;  Matter  of  Bentley,  31  Misc.  656;  Matter  of 
Porter,  60  id.  504;  Hoag  v.  Wright,  174  N.  Y.  36-39;  Matter  of 
Hennessey,  157  App.  Div.  136;  Matter  of  Hartman,  N.  Y.  Law 
Journal,  October  8, 1913,  opinion  quoted  supra,  page  858. 

Contra,  Matter  of  Thompson,  81  Misc.  86. 

§  837.  Matter  of  Lord,  186  N.  Y.  549,  supra,  page  335; 
Matter  of  David  Kennedy,  1 13  App.  Div.  4-9. 

§  887.  Re  depositions  taken  without  the  state  for  use  within 
the  state.  Matter  of  Wallace,  71  App.  Div.  284. 

§  942.  Laws  of  another  state  or  country  should  be  proved. 
Tilt  v.  Kelsey,  207  U.  S.  43-57;  Matter  of  Vivanti,  206  N.  Y. 
656;  Matter  of  Cummings,  142  App.  Div.  377-386. 

§  1279.  Submission  of  controversy  on  an  agreed  statement  of 
facts.  Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218;  Catlin  v. 
Trustees  of  Trinity  College,  113  N.  Y.  133;  Brown  v.  Lawrence 
Park  Realty  Co.,  133  App.  Div.  753. 

§  1290.  Held  not  to  apply  to  transfer  tax  proceeding.  Matter 
of  Sherar,  25  Misc.  138;  Matter  of  Mather,  41  id.  414^17, 
affirmed  90  App.  Div.  382  and  179  N.  Y.  526;  Matter  of  Wal- 
lace, 28  Misc.  603-606.  Vide  Vacating  Decree,  post,  page  878. 


CODE    OF   CIVIL    PROCEDURE  G33 

§  1338.  Matter  of  Brandreth,  169  N.  Y.  437-440;  Matter  of 
Davis,  184  N.  Y.  299. 

§  2067  et  seq.  Re  mandamus.  Matter  of  Kelsey  v.  Church, 
112  App.  Div.  408. 

§  2476.  Re  exclusive  jurisdiction  of  surrogate.  Matter  of 
Seaver,  63  App.  Div.  283;  Matter  of  Lowndes,  60  Misc.  506. 
Matter  of  Fitch,  160  N.  Y.  87.  Vide  pages  56  and  138. 

§  2477.  Re  concurrent  jurisdiction  of  two  or  more  surrogates 
in  non-resident's  estate.  Matter  of  Arnold,  114  App.  Div. 
244;  Matter  of  Hathaway,  27  Misc.  474.  Vide  page  139. 

§  2481,  Subd.  6.  Surrogate  has  power  to  vacate  or  modify 
decree.  Morgan  v.  Cowie,  49  App.  Div.  612;  Matter  of  Earle, 
74  App.  Div.  458;  Matter  of  Lowry,  89  App.  Div.  226;  Matter  of 
Barnum,  129  App.  Div.  418;  Matter  of  Weiler,  122  N.  Y. 
Supp.  608,  affirmed,  without  opinion,  139  App.  Div.  905; 
Matter  of  Meyer,  209  N.  Y.  386;  Matter  of  Townsend,  153  App. 
Div.  85;  Matter  of  Wallace,  28  Misc.  603;  Matter  of  Daly, 
34  id.  148-152;  Matter  of  Connelly,  38  id.  466-468;  Matter  of 
Campbell,  50  Misc.  485;  Matter  of  Eaton,  55  Misc.  472;  Matter 
of  Warren,  62  Misc.  444;  Matter  of  Coogan,  162  N.  Y.  613; 
Matter  of  Silliman,  175  N.  Y.  513;  Matter  of  Willets,  190  N.  Y. 
527;  Matter  of  Scrimgeour,  175  N.  Y.  507. 

§  2514,  Subcf.  13.  Re  real  property.  Matter  of  Vivanti,  63 
Misc.  618-620,  affirmed  as  to  holding  re  real  property  but 
reversed  as  to  other  points,  206  N.  Y.  656.  Vide  etiam  Althause, 
63  App.  Div.  252,  affirmed  168  N.  Y.  670. 

§2534.  Re  verification.  Matter  of  Kelsey  v.  Church,  112 
App.  Div.  408-410. 

§  2546.  Matter  of  Bishop,  188  N.  Y.  635. 

§  2555.  Matter  of  McGee,  N.  Y.  Law  Journal,  February  7, 
1913,  opinion  quoted  sub  Payment  of  Tax,  page  762. 

§  2570.  Re  appeal  to  Appellate  Division.  Morgan  v.  Warner, 
162  N.  Y.  612. 

§  2572.  Re  time  within  which  appeal  must  be  taken  to 
Appellate  Division.  Matter  of  Dingman,  66  App.  Div.  228- 
231. 

§  2695  et  seq.  Re  ancillary  letters. 

Tax  Law,  §  228  supra,  page  12;  Matter  of  Grosvenor,  124 
App.  Div.  331-332,  supra,  page  359. 

§  2712.  Matter  of  Althause,  63  App.  Div.  252,  affirmed  168 
N.  Y.  670;  Matter  of  Vivanti,  63  Misc.  618-620  reversed  on 
other  points  but  affirmed  as  to  holding  re  lease,  206  N.  Y.  656. 


034  CODICIL 

§  2713.  Re  exemption  for  widow  and  children.  Matter  of 
Libolt,  102  App.  Div.  29;  Matter  of  Page,  39  Misc.  220;  Matter 
of  Stiles,  64  Misc.  658-662. 

§  2719)  Subd.  2.  Re  taxes  assessed  on  the  property  of  the 
deceased  previous  to  his  death.  Matter  of  Hoffman,  42  Misc. 
90,  citing  Babcock,  115  N.  Y.  450-456. 

§  2730.  Re  commissions  of  executor  or  administrator.  Mat- 
ter of  Westurn,  152  N.  Y.  93;  Matter  of  Gihon,  169  id.  443; 
Matter  of  Silliman,  175  N.  Y.  513;  Matter  of  Van  Pelt,  63 
Misc.  616. 

§  2749.  Re  funeral  expenses  and  headstone.  Matter  of 
Maverick,  198  N.  Y.  618. 

§  3240.  Re  costs.  Matter  of  Gibson,  157  N.  Y.  680;  Matter  of 
Huntington,  168  N.  Y.  399-411;  Matter  of  Collins,  104  App. 
Div.  184;  Matter  of  Babcock,  86  App.  Div.  563. 

§  3334.  Special  proceeding.  Amherst  College  v.  Ritch,  151 
N.  Y.  282-342;  Morgan  v.  Warner,  45  App.  Div.  424-426, 
affirmed  on  opinion  below,  162  N.  Y.  612. 

§  3343.  Subd.  18.  Re  definition  of  domestic  corporation. 
Matter  of  Gushing,  40  Misc.  505. 

CODICIL 

As  to  tax  on  transfer  of  property  bequeathed  by  codicil  vide 
Matter  of  Myers,  N.  Y.  Law  Journal,  November  22,  1913, 
opinion  quoted  post,  page  759. 

COLLATERAL  SECURITY 

Vide  Schedule  A4,  supra,  page  116;  etiam  Pledged  Securities. 

COLLECTION  OF  TAX 

Vide  Matter  of  Dingman,  66  App.  Div.  228;  Matter  of  Meyer, 
209  N.  Y.  386,  supra,  page  397,  and  cases  cited  sub  Payment  of 
Tax,  post,  page  757. 

COMITY 

Vide  Laws  of  Another  State. 

Unless  there  are  in  the  statute  some  provisions  which  prevent 
the  courts  will  "pay  decent  regard  to  the  principles  of  interstate 
comity,"  and  will  adopt  "a  policy  which  will  enable  each  state 
fairly  to  enforce  its  own  laws  without  oppression  to  the  subject." 
Matter  of  Cooley,  186  N.  Y.  220-228. 

Full  faith  and  credit  due  to  proceedings  of  court  of  another 
state  do  not  require  that  New  York  courts  shall  be  bound  by 


COMPROMISE    OF   CLAIM  635 

adjudication  on  question  of  residence.  Matter  of  Tilt,  182 
N.  Y.  557  reversed  in  207  U.  S.  43-53,  sub  nom.  Tilt  v.  Kelsey. 
"When  asked  to  give  full  faith  and  credit  to  judicial  pro- 
ceedings of  another  state  we  are  at  least  entitled  to  know  what 
those  proceedings  were;  but  this  record  will  be  searched  in  vain 
for  proof  of  any  decree  of  the  courts  of  California,  to  say  nothing 
of  any  decree  even  purporting  to  bar  the  claim  of  the  state  of 
New  York  for  a  transfer  tax.  All  we  have  are  assertions  and 
allegations  on  information  and  belief  of  conclusions  respecting 
the  effect  of  the  proceedings  in  California."  The  Appellate 
Division  refused  to  take  judicial  notice  of  the  statutes  and  deci- 
sions, reversed  the  surrogate  and  remitted  the  proceedings  to 
him.  Matter  of  Cummings,  142  App.  Div.  377,  385,  391. 

COMMISSIONS 

Commissions  of  executors,  administrators  and  trustees, 
supra,  page  127.  Renunciation  of  commissions  discussed  in 
Matter  of  Van  Rensselaer,  N.  Y.  Law  Journal,  October  11, 
1912,  opinion  quoted,  page  680. 

Brokers'  commissions,  page  128. 

COMMISSION  TO  TAKE  TESTIMONY 
Vide  Depositions. 

COMMUNITY  PROPERTY 

Discussion  of,  in  Matter  of  Majot,  199  N.  Y.  29. 

COMPOSITION  OF  TAX 

Comptroller  has  authority  under  §  233  by  and  with  the 
consent  of  the  attorney  general  to  compound  tax  upon  certain 
trust  estates  where  the  remainders  are  not  presently  taxable. 
Matter  of  Kidd,  188  N.  Y.  274-277. 

COMPROMISE  OF  CLAIM 

(1)  Comptroller  should  be  made  (3)  Assignment  of  legacy. 

a  party.  (4)  Renunciation  of  legacy. 

(2)  Settlement  of  disputed  claims 

to  property. 

Vide  Ownership  of  Property. 

(l)  Comptroller  should  be  made  a  party 
"If  the  title  to  property  ostensibly  belonging  to  a  decedent, 


COMPROMISE    OF   CLAIM 

but  claimed  after  his  death  by  other  persons,  could  be  deter- 
mined by  the  agreement  of  the  parties  between  themselves  and 
without  notice  to  the  state  comptroller  the  transfer  tax  statute 
could  be  successfully  evaded  and  its  provisions  nullified." 
Matter  of  Sebastian  D.  Lawrence,  N.  Y.  Law  Journal,  February 
15,  1913. 

"As  the  effect  of  compromise  agreements  entered  into  between 
parties  claiming  the  property  as  executors  and  parties  claiming 
by  title  adverse  to  the  decedent  would  be  practically  to  nullify 
the  provisions  of  the  Transfer  Tax  Law  and  permit  such  prop- 
erty to  evade  taxation,  the  courts  will  critically  examine  such 
agreements  and  the  basis  of  the  claim  of  title  adverse  to  the 
decedent  in  order  to  determine  whether  such  claims  are  bona 
fide  or  are  merely  presented  for  the  purpose  of  evading  the 
Tax  Law. 

"  The  state  comptroller,  as  the  representative  of  the  State, 
should  be  made  a  party  to  such  compromise  agreements;  and 
where  he  is  not  made  a  party  such  an  agreement  will  not  be 
binding  upon  the  State  in  a  proceeding  to  assess  a  transfer  tax. 

"  While  the  state  comptroller  was  not  made  a  party  to  the 
compromise  agreement  executed  between  the  executors  and  the 
widow  of  decedent  in  the  matter  under  consideration  he  ap- 
peared before  the  appraiser  and  made  no  objection  to  the  in- 
troduction in  evidence  of  a  copy  of  the  compromise  agreement. 
Neither  did  he  object  to  that  part  of  the  report  of  the  appraiser 
where  the  distribution  to  the  widow  was  made  not  in  accord- 
ance with  the  provisions  of  the  will  of  the  decedent,  but  in 
accordance  with  the  terms  of  the  compromise  agreement.  Such 
a  failure  on  the  part  of  the  attorney  for  the  state  comptroller 
to  object  to  the  compromise  agreement  must  be  deemed  an 
acquiescence  in  its  validity  so  far  as  the  imposition  of  the  trans- 
fer tax  is  concerned."  Matter  of  Yerkes,  N.  Y.  Law  Journal, 
December  5,  1912. 

(2)  Settlement  of  disputed  claims  to  property 

A  dispute  having  arisen  as  to  whether  the  estate  or  a  stranger 
thereto  was  the  owner  of  certain  savings  bank  accounts,  a 
compromise  was  effected  whereby  the  estate  obtained  75%  of 
the  accounts.  After  going  into  the  merits  of  the  compromise 
Surrogate  Thomas  held  that  only  the  75%  was  subject  to  tax. 
Matter  of  Thomas,  39  Misc.  223.  In  the  later  case  of  Marks, 
40  Misc.  507,  the  surrogate  pointed  out  that  in  the  Thomas 


COMPROMISE    OF   CLAIM  637 

case,  supra,  "an  asset  claimed  by  the  administrator  in  behalf 
of  the  estate  was  also  claimed  by  a  stranger  under  a  title  su- 
perior to  that  of  the  decedent.  A  compromise  was  prudently 
and  properly  made  which  recognized  the  rights  of  the  estate 
to  a  portion  of  the  disputed  property.  *  *  * 

"  I  remarked  it  was  competent  for  an  administrator  to  pur- 
chase peace  '  for  the  estate '  and  to  charge  the  disbursement  as 
an  expense  of  administration."  In  the  Marks  case,  supra, 
$10,000  paid  to  a  niece  of  testator  pursuant  to  an  agreement 
under  which  she  withdrew  objections  to  the  will  was  not  allowed 
as  a  deduction  because  it  was  "a  payment  out  of  the  property 
transferred  to  the  beneficiaries  in  satisfaction  of  their  own 
contract  obligation  and  was  not  an  expense  of  administering  the 
estate." 

Legal  effect  of  compromise  with  estate  by  one  claiming  gift 
from  deceased  was  to  quiet  estate's  claim  and  did  not  affect 
taxability  on  ground  of  gift  being  causa  mortis.  Matter  of 
Edwards,  146  N.  Y.  380. 

(3)  Assignment  of  legacy 

Assignment  of  legacy  to  avoid  will  contest  taxable  as  though 
assignment  not  made.  Matter  of  Cook,  187  N.  Y.  253. 

In  Matter  of  Aaron  S.  Baldwin,  N.  Y.  Law  Journal,  Decem- 
ber 11,  1913,  Surrogate  Fowler  held:  "The  decedent,  who  was  a 
resident  of  New  York  County,  died  on  the  21st  of  August,  1912. 
Objections  to  the  probate  of  his  will  were  filed  by  certain  of  his 
next  of  kin,  and  the  sum  of  $10,500  was  paid  to  such  next  of 
kin  before  the  objections  were  withdrawn  and  the  will  admitted 
to  probate.  The  appraiser  refused  to  allow  this  sum  as  a  deduc- 
tion from  the  taxable  assets  of  the  estate,  and  from  the  order 
entered,  upon  his  report  this  appeal  is  taken  by  the  executor. 
The  appraiser's  report  does  not  show  the  details  of  the  ar- 
rangement by  which  the  legatees  agreed  to  pay  the  contesting 
next  of  kin  the  sum  of  $10,500,  but  as  the  executor  had  no  au- 
thority to  make  such  a  payment  it  must  be  inferred  that  the 
legatees  assigned  to  the  next  of  kin  a  certain  proportion  of  their 
respective  legacies.  But  this  agreement  of  compromise  did 
not  diminish  the  assets  of  the  estate.  It  merely  diminished 
the  amount  which  the  legatees  received,  and  this  diminution 
was  caused  by  their  own  act,  not  by  the  will  of  the  decedent. 
The  value  of  the  decedent's  estate,  less  deductions  for  funeral 
expenses,  debts  and  expenses  of  administration  was  subject  to 


638  COMPROMISE   OF   CLAIM 

a  transfer  tax.  The  right  of  the  State  to  a  tax  upon  the  interests 
transferred  by  the  will  of  the  decedent  accrued  immediately 
upon  his  death;  the  right  of  the  legatees  to  the  legacies  be- 
queathed to  them  by  the  decedent  accrued  at  the  same  time 
and  was  governed  by  the  provisions  of  the  will.  Therefore,  no 
agreement  subsequently  executed  by  the  legatees  and  next  of 
kin  could  modify  the  provisions  of  decedent's  will  or  defeat  the 
right  of  the  State  to  a  tax  upon  the  value  of  the  interests  trans- 
ferred. 

"If  the  legatees,  who  contributed  the  sum  of  $10,500  paid  to 
the  next  of  kin,  had  renounced  their  legacies,  they  would  not 
be  subject  to  a  tax.  Matter  of  Wolfe,  89  App.  Div.  349.  But 
they  did  not  make  such  renunciation,  and  their  assignment  of 
a  proportionate  part  of  the  legacies  to  the  contesting  next  of 
kin  shows  that  they  accepted  them,  because  there  could  have 
been  no  assignment  of  a  part  of  the  legacies  unless  they  had 
been  previously  accepted  by  the  legatees.  While  the  legatees 
could  dispose  of  their  legacies  in  any  manner  they  desired,  they 
could  not  by  such  disposition  alter  or  modify  the  provisions  of 
decedent's  will.  As  was  said  by  the  Court  of  Appeals  in  the 
Matter  of  Cook,  187  N.  Y.  254:  'No  settlement  could  change  a 
word  that  the  testator  wrote/  The  will  stands  as  it  was  written, 
and  the  most  solemn  instrument  executed  by  all  the  legatees 
and  next  of  kin  could  not  convert  a  bequest  to  certain  legatees 
into  a  bequest  to  persons  not  mentioned  in  the  will.  Therefore, 
as  the  transfer  of  the  property  was  effected  by  the  provisions 
of  decedent's  will  and  the  legacies  were  not  renounced  by  the 
legatees  therein  mentioned,  the  value  of  the  interests  so  trans- 
ferred is  subject  to  a  tax,  without  any  deduction  on  account  of 
the  amount  paid  to  the  contesting  next  of  kin.  Matter  of  Cook, 
supra;  Matter  of  Westurn,  152  N.  Y.  93;  Matter  of  Marks,  66 
Misc.  395.  Order  fixing  tax  affirmed." 

(4)  Renunciation  of  legacy 

Where  suit  has  been  commenced  and  settlement  made 
whereby  legatee  renounces  a  portion  of  legacy,  the  portion 
renounced  is  not  taxable  upon  the  basis  of  the  legatee  taking  it 
under  the  will.  Matter  of  Merritt,  155  App.  Div.  228.  As  to 
right  to  renounce  vide  Matter  of  Wolfe,  89  App.  Div.  349, 
page  297,  affirmed,  without  opinion,  179  N.  Y.  599. 


COMPTROLLER  639 

COMPTROLLER 

(1)  Represents   the   interests   of          (5)  Payment  of  tax. 

the  state.  (6)  Transfers   of   securities,    de- 

(2)  May  apply  for  appraisal  of  posits  or  other  assets. 

estate.  (7)  Should    be    made    party    to 

(3)  Appraisal  must  be  on  notice  compromise  agreements. 

to  comptroller.  (8)  Where     comptroller    not    a 

(4)  Appoints  appraisers  in  certain  party  to  proceeding. 

counties. 

(1)  Represents  the  interests  of  the  state 

The  state  comptroller  represents  the  interests  of  the  state  of 
New  York  in  transfer  tax  proceedings.  He  usually  appears  in 
all  such  proceedings  by  attorney  designated  and  retained  under 
the  provisions  of  the  last  sentence  of  §  235. 

(2)  May  apply  for  appraisal  of  estate 

The  application  under  the  second  sentence  of  §  230  for  an 
order  of  the  surrogate  directing  an  appraiser  to  fix  the  fair 
market  value  may  be  made  by  the  state  comptroller.  The 
petition  may  be  made  upon  information  and  belief.  Matter  of 
Kelsey  v.  Church,  112  App.  Div.  408. 

DISTRICT  ATTORNEY  PROCEEDING  under  §  235  is  not  the 
only  remedy  in  delinquent  estates.  The  state  comptroller  may 
apply  for  appointment  of  appraiser  after  the  expiration  of 
eighteen  months  from  the  accrual  of  the  tax.  Matter  of  Pearsall, 
N.  Y.  Law  Journal,  Feburary  2,  1912,  opinion  quoted,  post, 
page  666. 

(3)  Appraisal  must  be  on  notice  to  comptroller 

Notice  of  the  appraisal  must  be  given  to  the  state  comptroller 
in  accordance  with  the  provisions  of  the  second  paragraph  of 
§  230.  An  order  exempting  an  estate  from  taxation  will  be 
set  aside  if  made  without  notice  to  the  comptroller.  Matter  of 
Collins,  104  App.  Div.  184;  Matter  of  Schmidt,  39  Misc.  77. 

The  appraiser  is,  by  the  provisions  of  the  last  sentence  of 
§  230,  required  to  file  a  duplicate  of  his  report  in  the  office  of  the 
state  comptroller.  The  surrogate  "upon  the  determination  by 
him  as  to  the  value  of  any  estate  *  *  *  shall  immediately 
forward  a  copy  of  such  taxing  order  to  the  state  comptroller. 
The  surrogate  shall  also  forward  to  the  state  comptroller  copies 
of  all  orders  entered  by  him  in  relation  to  or  affecting  in  any 
way  the  transfer  tax  on  any  estate,  including  orders  of  exemp- 
tion." Third  paragraph  of  §  231. 


640  COMPTROLLER 

(4)  Appoints  appraisers  in  certain  counties 

In  the  counties  of  Albany,  Bronx,  Dutchess,  Erie,  Kings, 
Monroe,  Nassau,  New  York,  Niagara,  Oneida,  Onondaga, 
Orange,  Queens,  Rensselaer,  Richmond,  Suffolk  and  West- 
chester  he  appoints  transfer  tax  appraisers  who  may  be  removed 
at  his  pleasure.  Section  229;  People  ex  rel.  McNeile  v.  Glynn, 
128  App.  Div.  257;  Matter  of  Weeks  v.  Kraft,  147  App.  Div.  403. 

(5)  Payment  of  tax 

In  the  said  seventeen  counties  payment  is  made  direct  to  the 
state  comptroller  of  the  inheritance  tax  assessed  in  said  counties. 
Last  sentence  of  §  222.  All  receipts  for  the  payment  of  the 
transfer  taxes  collected  in  the  said  seventeen  counties  are  signed 
by  the  state  comptroller,  and  for  transfer  taxes  collected  in  the 
other  counties  of  the  state  his  countersignature  is  required  to  that 
of  the  county  treasurer.  First  sentence  of  §  236;  People  ex  rel. 
Lown  v.  Cook,  158  App.  Div.  74,  affirmed,  209  N.  Y.  mem. 

REAL  ESTATE  upon  which  the  transfer  tax  has  been  paid 
should  have  recorded  in  the  office  of  the  county  clerk  or  register 
of  the  county  where  such  real  estate  is  situated,  a  certificate  of 
the  comptroller  issued  under  the  provisions  of  the  last  sentence 
of  §  236.  Vide  supra,  page  97. 

(6)  Transfer  of  securities,  deposits  or  other  assets 

Under  the  provisions  of  §  227  the  delivery  or  transfer  of  any 
securities,  deposits  or  other  assets  shall  be  on  notice  to  state 
comptroller.  Vide  supra,  page  57,  paragraphs  (7),  (11),  (12) 
and  (13) ;  and  supra,  page  838. 

(7)  Should  be  made  party  to  compromise  agreements 

Vide  Matter  of  Yerkes,  N.  Y.  Law  Journal,  December  5, 1912, 
and  Matter  of  Lawrence,  id.,  February  15,  1913,  opinions 
quoted  from  sub  Compromise  of  Claim. 

(8)  Where  comptroller  not  a  party  to  proceeding 

For  discussion  of  binding  effect  of  a  decision  where  state 
comptroller  not  made  a  party  vide  Tilt  v.  Kelsey,  207  U.  S. 
43,  supra,  page  311,  and  Matter  of  Lawrence,  N.  Y.  Law  Journal, 
February  15,  1913,  supra,  page  317;  etiam  Matter  of  Edson, 
38  App.  Div.  19-21,  affirmed,  on  opinion  below,  159  N.  Y.  568; 
Matter  of  Willetts,  119  App.  Div.  119-126,  affirmed,  without 
opinion,  190  N.  Y.  527;  Matter  of  Kidd,  115  App.  Div.  205-210, 
reversed  on  other  points,  188  N.  Y.  274. 


CONSTITUTIONALITY  641 

CONCLUSIONS  OF  FACT 

Testimony  giving,  should  be  excluded.  Morgan  v.  Warner, 
45  App.  Div.  424-427,  affirmed,  on  opinion  below,  162  N.  Y. 
612. 

Vide  Testimony. 

CONCURRENT  JURISDICTION 

Vide  §  2477  of  Code  of  Civil  Procedure  and  §  228  of  Tax  Law; 
Non-Resident  Estates,  supra,  page  139. 

CONFLICTING  CLAIMS  TO  ESTATE 

Vide  Compromise  of  Claim. 

CONSENT  OF  COMPTROLLER 

Vide  Safe  Deposit  Box,  post,  page  837,  and  Transfer  of  Se- 
curities, post,  page  866. 

In  NON-RESIDENT  estate,  vide  supra,  page  135. 

CONSIDERATION 

Deed  given  for  a  consideration  not  subject  to  the  tax,  vide 
supra,  page  37. 

As  to  transfer  by  will  vide  Matter  of  Gould,  156  N.  Y.  423, 
supra,  page  224;  Matter  of  Rogers,  172  id.  617,  supra,  page  274; 
Matter  of  Kidd,  188  N.  Y.  274,  supra,  page  341;  Matter  of 
Demers,  41  Misc.  470;  Matter  of  Riemann,  42  id.  648-650. 

CONSISTENCY 

"  Perfect  consistency  is  not  always  practicable  in  a  scheme  of 
taxation  that  is  intended  to  let  nothing  escape  that  can  be  owned 
or  transferred."  Matter  of  Whiting,  150  N.  Y.  27-30. 

CONSTITUTIONALITY 

The  original  act,  Laws  of  1885,  chapter  483,  in  effect  June  30, 
1885,  held  to  be  constitutional.  Matter  of  McPherson,  104 
N.  Y.  306. 

In  Matter  of  Merriam,  141  N.  Y.  479,  sustained  in  163  U.  S. 
625  sub  nom.  United  States  v.  Perkins,  it  was  held  that  a 
legacy  to  the  United  States  was  taxable,  the  United  States 
Supreme  Court  saying,  page  630:  "The  act  in  question  is  not 
open  to  the  objection  that  it  is  an  attempt  to  tax  the  property 
of  the  United  States,  since  the  tax  is  imposed  upon  the  legacy 
before  it  reaches  the  hands  of  the  government."  Similarly  it 
41 


642  CONSTITUTIONALITY 

was  held  that  the  transfer  of  United  States  bonds  was  subject 
to  the  tax.  Matter  of  Plummer,  30  Misc.  19,  affirmed,  without 
opinion  either  in  the  Appellate  Division  or  the  Court  of  Appeals, 
161  N.  Y.  631;  sustained  in  178  U.  S.  115,  sub  nom.  Plummer  v. 
Coler. 

The  taxation  in  a  non-resident's  estate  of  a  bank  deposit  in 
a  New  York  depositary  upheld.  Matter  of  Houdayer,  150 
N.  Y.  37;  Matter  of  Blackstone,  69  App.  Div.  127,  affirmed  171 
N.  Y.  682;  sustained  in  188  U.  S.  189,  sub  nom.  Blackstone  v. 
Miller.  In  non-resident  estates  transfers  of  bank  account  made 
since  the  1911  amendment  are  not  subject  to  tax,  vide  supra, 
page  133. 

In  Matter  of  Keeney,  194  N.  Y.  281,  sustained  in  222  U.  S. 
525,  sub  nom.  Keeney  v.  New  York,  the  statute  was  attacked  as 
unconstitutional  as  involving  "'an  arbitrary,  discriminatory 
and  unequal  tax  upon  the  transfer  of  property '  in  two  respects. 
First,  that  the  rate  of  tax  varies  according  to  the  relation  the 
grantee  bears  to  the  grantor,  and,  second,  that  it  singles  out  for 
taxation  transfers  where  a  life  estate  is  reserved  to  the  grantor, 
leaving  all  other  transfers  or  conveyances  exempt."  The  con- 
stitutionality of  the  statute  was  upheld,  vide  Keeney  case, 
supra,  page  360. 

LAWS  1897,  CHAP.  284,  in  effect  April  16, 1897,  subd.  6,  §  220, 
held  to  be  constitutional.  Matter  of  William  H.  Vanderbilt, 
163  N.  Y.  597;  Matter  of  Dows,  167  N.  Y.  227,  sustained  in  183 
U.  S.  278,  sub  nom.  Orr  v.  Oilman;  Matter  of  Delano,  176  N.  Y. 
486,  sustained  in  205  U.  S.  466. 

LAWS  1899,  CHAP.  76,  unconstitutional  so  far  as  it  attempted 
to  tax  estates  upon  remainder  or  reversion  which  vested  prior 
to  June  30,  1885.  Matter  of  Pell,  171  N.  Y.  48;  Matter  of 
Scrimgeour,  175  N.  Y.  507.  Vide  post,  page  818. 

Held  constitutional  that  portion  of  §  230  which  provides  for 
taxation  at  the  highest  rate  which  would  be  possible  on  the 
happening  of  any  of  the  contingencies  or  conditions  which  are 
set  forth  in  the  transfer  in  trust  or  otherwise.  Matter  of 
Cornelius  Vanderbilt,  172  N.  Y.  69;  Matter  of  Brez,  id.  609; 
Matter  of  Tracy,  179  id.  501.  Vide  Remainders,  post,  page  822. 

LAWS  1900,  CHAP.  658,  in  effect  April  25,  1900,  providing, 
inter  alia,  for  appointment  by  State  Comptroller  of  appraisers 
(now  §  229)  is  not  a  local  act  and  is  constitutional.  Matter  of 
Wallace,  71  App.  Div.  284. 

Journals  of  the  two  houses  established  that  chap.  41,  Laws 


CONTEMPLATION    OF   DEATH  G43 

1903  was  passed  with  the  requisite  constitutional  number  pres- 
ent. Matter  of  Stickney,  185  N.  Y.  107,  writ  of  error  dismissed, 
209  U.  S.  419,  sub  nom.  Stickney  v.  Kelsey;  Matter  of  Weeks, 
185  N.  Y.  541. 

LAWS  1908,  CHAP.  310,  in  effect  May  18,  1908,  which  added 
subdivision  3  to  §  220  held  to  be  constitutional.  Matter  of 
Porter,  67  Misc.  19,  affirmed,  148  App.  Div.  896.  For  discussion 
of  effect  of  amendment  vide  supra,  page  152. 

CONSTRUCTION  OF  STATUTE 

Vide  cases  cited  sub  Constitutionality;  Doubt;  Legislative 
Declaration;  Retroactive. 

CONSTRUCTION  OF  WILL 

Extrinsic  evidence  that  legacy  impressed  with  trust  does  not 
relieve  from  tax  where  court  construe  absolute  legacy  to  pass 
under  will.  Matter  of  Edson,  159  N.  Y.  568. 

When  the  surrogate  construes  will  he  may  hold  some  of  its 
provisions  void,  and  that  therefore  tax  should  be  assessed  upon 
transfers  to  persons  entitled  to  take  in  intestacy.  Matter  of 
Ullmann,  137  N.  Y.  403^108.  Vide  Appraiser,  supra,  page  599. 

Decree  of  surrogate  binding  on  questions  of  taxation  only. 
Matter  of  Ullmann,  supra;  Amherst  College  v.  Ritch,  151  N.  Y. 
282-343. 

CONTEMPLATION  OF  DEATH 

(1)  Definition.  (4)  Transfers  held  not  subject  to 

(2)  Proceedings  taken  upon  in-  tax. 

formation  and  belief.  (5)  Notice  to  grantee.. 

(3)  Gifts     held     taxable     under 

subd.  4,  §  220. 

Vide  Ante-nuptial  Contract;  Gift;  Property  Held  in  Trust  for 
or  jointly  with  Others;  Trust  Deed. 

i 
(1)  Definition 

"  The  words  '  in  contemplation  of  the  death '  do  not  refer  to  the 
general  expectation  which  every  mortal  entertains,  but  rather 
the  apprehension  which  arises  from  some  existing  condition  of 
body  or  some  impending  peril."  Matter  of  Baker,  83  App. 
Div.  530-533,  affirmed,  on  opinion  below,  178  N.  Y.  575;  Matter 
of  Spaulding,  163  N.  Y.  607;  Matter  of  Hess,  187  N.  Y.  554. 
Vide  etiam,  supra,  page  35. 


644  CONTEMPLATION    OF   DEATH 

"THE  PECULIAR  OPERATION  OF  A  PARTICULAR  PERSON'S 
MIND  at  a  particular  time  and  while  transacting  a  particular 
kind  of  business  is  something  which  is  not  susceptible  of  direct 
proof,  nor  is  it  within  the  realm  of  expert  analysis,  and  if  the  ap- 
plication of  this  statute  (subd.  4  of  §  220)  is  surrounded  by  grave 
difficulties,  dependent  to  a  certain  extent  upon  the  psychological 
speculations  of  the  appraiser  who  is  prosecuting  the  inves- 
tigation, the  remedy  lies  with  the  legislature  and  not  with  the 
courts."  Matter  of  Crary,  31  Misc.  72-75. 

Under  the  original  statute  the  words  "in  contemplation  of 
death"  did  not  appear.  Matter  of  Edwards,  85  Hun,  436, 
supra,  page  194,  affirmed,  without  opinion,  146  N.  Y.  380. 
They  were  first  introduced  by  Laws  1891,  chap.  215,  in  effect 
April  20,  1891.  Matter  of  Edgerton,  35  App.  Div.  125-128, 
supra,  page  227,  affirmed,  without  opinion,  158  N.  Y.  671. 

(2)  Proceeding  taken  upon  information  and  belief 

"If  reliable  information  is  brought  to  the  attention  of  the 
surrogate  that  a  decedent  had  transferred  his  property  in  con- 
templation of  death,  it  would  seem  from  the  provisions  of  §  230 
that  the  surrogate,  'upon  his  own  motion/  could  enter  an  order 
referring  the  appraisal  of  the  property  so  transferred  to  the 
official  appraiser. 

"Whenever  such  information  is  given  to  the  state  comptroller 
or  the  attorney  representing  him  in  the  county  where  the  dece- 
dent was  a  late  resident,  it  is  the  practice  for  the  comptroller's 
attorney  to  prepare  a  petition  on  behalf  of  the  comptroller, 
alleging  upon  information  and  belief  the  facts  in  support  of  such 
transfer  in  contemplation  of  death,  and  present  the  same  to  the 
surrogate,  praying  for  an  order  designating  the  official  appraiser 
to  fix  the  fair  market  value  of  the  property  the  transfer  of  which 
may  be  subject  to  taxation,  and  the  usual  proceedings  then 
follow."  State  comptroller's  opinion,  dated  April  16,  1913, 
2  State  Department  Reports,  497-500. 

(3)  Gifts  held  taxable  under  subd.  4,  §  220 

DEEDS  DELIVERED,  WITHOUT  CONSIDERATION,  to  nieces  a  few 
days  before  death  of  decedent  who  was  seventy-nine  years  of 
age,  ill  with  consumption,  held  to  be  made  in  contemplation  of 
death  and  taxable.  Matter  of  Birdsall,  22  Misc.  180-191, 
affirmed,  without  opinion,  43  App.  Div.  624. 

Ten  days  before  his  death  decedent,  who  was  seventy-six, 


CONTEMPLATION   OF   DEATH  645 

delivered  to  his  adopted  son  deeds  to  real  estate  appraised  at 
$261,000.  He  had  made  his  will  some  eight  years  previously  by 
which  he  devised  the  property  to  his  said  adopted  son  so  if  the 
adopted  son  had  not  acquired  the  land  by  the  deeds,  he  would 
have  received  it  by  devise.  Decedent  had  been  suffering  from 
a  chronic  disease  for  over  two  years  prior  to  his  death.  Surrogate 
Beckett  held  that  there  was  a  gift  made  in  contemplation  of 
death  within  the  meaning  of  subdivision  4  of  §  220,  and  that 
the  $261,000  worth  of  land  was  taxable.  He  said  in  the  course  of 
his  opinion:  "The  deeds  to  the  real  estate  were  executed  by  the 
decedent,  delivered  to  the  grantee  and  duly  recorded  by  him.  It 
was,  therefore,  an  absolute  transfer  of  the  real  estate.  *  *  * 
To  prove  that  property  is  transferred  in  contemplation  of  death 
is  exceedingly  difficult,  as  the  only  parties  whose  intimacy  with 
a  decedent  would  afford  them  an  opportunity  of  being  cognizant 
of  his  intentions  are  usually  those  whose  interests  would  be 
served  by  testimony  to  the  effect  that  the  gift  was  not  made  in 
contemplation  of  death,  and  the  State  is,  therefore,  compelled 
to  rely  upon  conclusions  derived  from  the  testimony  of  witnesses 
who  are  interested  in  disproving  its  contention.  It  is  also  in 
large  measure  the  attempted  proof  of  the  operations  of  a  man's 
mind."  Matter  of  Price,  62  Misc.  149-152. 

IN  MATTER  OF  MARY  DELANEY,  N.  Y.  Law  Journal,  Au- 
gust 16,  1913,  Surrogate  Cohalan  held:  "Appeal  from  an  order 
fixing  tax.  The  appraiser  found  that  an  assignment  of  mort- 
gage for  $13,000  made  by  the  decedent  to  her  daughter,  Nellie 
B.  Reed,  about  two  years  before  the  death  of  the  decedent  was  a 
gift  made  in  contemplation  of  her  death.  The  evidence  taken 
before  the  appraiser  does  not  sustain  this  finding.  He  also 
found  that  a  conveyance  of  premises  made  by  the  decedent  to 
her  son  about  two  months  before  her  death  was  subject  to  tax  as 
a  gift  made  in  contemplation  of  death.  The  decedent  at  the 
time  she  conveyed  the  premises  to  her  son  was  81  years  of  age 
and  was  being  attended  by  a  physician.  These  circumstances 
raise  a  presumption  that  she  must  have  contemplated  the 
probability  of  her  early  dissolution  at  the  time  she  conveyed  the 
premises  to  her  son.  The  appraiser  was  therefore  correct  in 
holding  that  the  gift  to  decedent's  son  was  taxable.  The  order 
fixing  tax  will  be  modified  by  exempting  the  interest  of  Nellie 
B.  Reed  in  decedent's  estate." 

IN  MATTER  OF  DEE,  N.  Y.  Law  Journal,  December  6,  1913, 
Surrogate  Ketcham  held:  "This  appeal  presents  the  question 


646  CONTEMPLATION    OF   DEATH 

whether  a  gift  made  by  the  decedent,  which  was  consummated 
by  every  ceremony  essential  to  a  gift  inter  vivos,  was  taxable  as  a 
gift  made  'in  contemplation  of  the  death  of  the  *  *  * 
donor,'  (Tax  Law,  sec.  220).  While,  after  some  confusion  of 
authority,  it  is  now  fairly  established  that  such  gifts  may  be  tax- 
able-it is  not  essential  in  this  case  to  consider  all  the  varying 
conditions  which  may  lead  to  the  imposition  of  the  tax.  Two 
facts,  appearing  without  denial  or  qualifications,  require  the 
finding  that  in  this  case  the  transfer  was  '  in  contemplation  of 
death'  and  is  taxable. 

"  The  donor  was  a  physician  living  in  the  household  of  the 
donee.  Prior  to  the  gift,  in  speaking  of  the  donee  and  her  hus- 
band to  the  one  witness  whose  statement  is  submitted,  the 
decedent  said  that  the  'only  relations  he  had  was  the  people 
in  the  house  and  that  is  the  only  people  he  had  and  the  people 
that  took  care  of  him,,  *  *  *  and  if  anything  should  happen 
to  him  that  he  would  see  that  they  would  be  well  taken  care  of 
for  the  rest  of  their  days,  because  they  had  treated  him  just 
the  same  as  a  mother  or  father.'  The  decedent,  having  delivered 
the  gift  at  about  10:30  in  the  evening,  was  observed  at  12  o'clock 
of  the  same  night  by  this  witness,  who  says:  'When  I  carne 
down  in  his  office  he  had  them  things  the  doctor  has  to  test 
his  chest,  testing  his  chest,  and  when  he  saw  me  he  dropped 
them,  and  I  asked  him  was  he  ill,  and  he  said  no.'  Except  for 
this  statement,  the  decedent  was  apparently  in  his  ordinary 
health  when  the  gift  was  made.  At  about  2  o'clock  the  following 
morning  he  was  found  upon  the  stairs  of  his  dwelling,  dead. 
The  cause  of  his  death  is  not  shown.  Where  a  gift  was  be- 
stowed by  a  physician  who  was  on  the  same  evening  making 
a  stethoscopic  examination  of  his  own  chest  and  who  had  long 
intended  to  make  provisions  for  the  donee,  to  take  effect  on  his 
death,  and  except  for  such  gift  had  made  no  such  provision, 
the  transfer,  though  inter  vivos,  is  taxable.  The  order  is 
affirmed." 

(4)  Transfers  held  not  subject  to  tax 

STOCK  was  endorsed  over  by  husband  to  his  wife  three  years 
before  his  death,  but  no  transfer  was  made  on  books  of  corpora- 
tion and  dividends  on  the  stock  were  paid  to  him.  He  delivered 
the  stock  to  his  wife,  and  she  put  it  back  in  his  safe  deposit 
box,  the  key  of  which  he  delivered  to  her  and  she  subsequently 
paid  the  rental.  The  dividends  he  paid  over  to  her.  Held, 


CONTEMPLATION    OF   DEATH  647 

that  the  transfer  was  not  in  contemplation  of  death  and  not 
taxable.  Matter  of  Graves,  52  Misc.  433. 

ASSIGNMENT  OF  STOCK  by  husband  to  wife  three  weeks  before 
his  death  held  by  divided  court  not  to  be  taxable  under  the  cir- 
cumstances of  the  case.  Matter  of  Mahlstedt,  67  App.  Div.  176, 
appeal  dismissed,  171  N.  Y.  652. 

IN  MATTER  OF  MARY  F.  McKEON,  N.  Y.  Law  Journal,  June  8, 
1911,  Surrogate  Cohalan  held:  "The  question  which  this 
appeal  presents  for  determination  is  whether  the  real  estate  con- 
veyed by  the  decedent  prior  to  her  death  is  subject  to  a  transfer 
tax.  The  decedent  died  in  December,  1908.  On  August  13, 
1908,  she  executed  and  delivered  to  one  William  H.  Murphy  as 
trustee,  two  deeds  by  which  she  conveyed  to  him  certain  parcels 
of  real  estate.  It  was  provided  in  the  deeds  that  the  trustee 
should  apply  the  income  from  the  real  estate  to  the  support, 
education  and  maintenance  of  the  grantor's  daughter  until  she 
arrived  at  the  age  of  21.  If  the  daughter  attained  that  age 
she  became  entitled  to  the  property  absolutely.  It  was  further 
provided  that  the  trustee  should  pay  to  the  grantor  from  the 
rents  and  profits  of  the  real  estate  a  reasonable  allowance  for 
her  support  and  that  this  allowance  should  constitute  a  lien 
upon  the  property  conveyed.  The  trustee  was  given  power  to 
sell,  mortgage  or  lease  the  property,  and  to  execute  and  deliver 
proper  instruments  to  effect  either  of  these  purposes.  The 
appraiser  reported  that  the  value  of  this  real  estate  was  taxable 
against  decedent's  daughter. 

"  As  the  property  did  not  pass  by  will  or  by  the  intestate  laws 
its  transfer  would  not  be  subject  to  tax — unless  it  appeared  that 
it  was  conveyed  by  the  grantor  in  contemplation  of  her  death  or 
that  the  deeds  were  made  with  the  intention  that  they  should 
not  take  effect  until  at  or  after  the  grantor's  death.  It  appears 
from  the  evidence  taken  before  the  appraiser  that  at  the  time 
the  deeds  were  executed  the  grantor  was  ill,  although  ap- 
parently not  seriously  indisposed,  and  that  a  physician  occa- 
sionally attended  her.  But  it  also  appears  that  she  did  not 
know  the  nature  of  the  disease  from  which  she  suffered,  and  that 
she  did  not  say  anything  which  would  indicate  that  she  appre- 
hended her  dissolution  in  the  immediate  future.  Her  explana- 
tion of  the  conveyance  of  her  real  estate  to  the  trustee  was  that 
she  wished  to  place  the  property  beyond  the  reach  of  her  hus- 
band; that  her  health  was  not  sufficiently  good  to  enable  her 
properly  to  attend  to  the  care  and  preservation  of  the  property 


648  CONTEMPLATION    OF   DEATH 

or  to  the  collection  of  the  rents,  and  that  she  desired  to  make 
provision  for  the  education  and  maintenance  of  her  minor 
daughter.  Neither  her  physical  condition  at  the  time  she 
executed  the  deeds  nor  the  purposes  which  she  wished  to  ac- 
complish by  their  execution  would  indicate  that  the  property 
was  transferred  while  she  actually  apprehended  her  dissolution. 

"The  words  'in  contemplation  of  death'  as  used  in  the  Trans- 
fer Tax  Law,  do  not  refer  to  that  general  expectation  of  death 
which  every  mortal  entertains,  but  rather  to  that  apprehension 
which  arises  from  some  existing  condition  of  body  or  some  im- 
pending peril.  While  the  decedent  died  about  four  months 
after  the  time  she  executed  the  deed,  there  is  no  evidence  to 
show  that  her  physical  condition  was  such  as  to  induce  her  to 
believe  at  the  time  of  the  execution  of  the  deeds  that  she  would 
die  within  a  comparatively  short  time.  In  fact  there  is  no 
evidence  whatever  to  indicate  that  her  apprehension  of  ap- 
proaching dissolution  prompted  her  to  execute  the  deeds  or  that 
the  conveyance  was  made  for  the  purpose  of  evading  the  pay- 
ment of  the  transfer  tax.  The  evidence,  therefore,  is  not -suffi- 
cient to  support  a  finding  that  the  property  was  conveyed  by  the 
decedent  in  contemplation  of  death  (Matter  of  Spaulding,  49 
App.  Div.  541,  aff'd  163  N.  Y.  607). 

"That  the  conveyance  was  not  made  to  take  effect  at  or 
after  the  death  of  decedent  is  apparent  from  the  deeds  them- 
selves. They  were  absolute  in  form,  the  grantee  was  given  the 
power  to  sell,  mortgage  or  lease  the  premises,  no  power  of 
revocation  was  reserved  to  the  grantor.  Therefore,  as  soon  as 
the  deeds  were  delivered  to  the  trustee  the  title  vested  absolutely 
in  him.  The  relation  of  the  cestui  que  trust  to  the  property  was 
not  in  any  way  affected  by  the  death  of  the  grantor.  Her  title 
was  neither  enlarged  nor  diminished  by  that  event.  The  trustee 
had  absolute  power  over  the  property  until  the  cestui  que  trust 
arrived  at  the  age  of  21,  when  it  became  his  duty  to  convey  it  to 
her.  The  execution  and  delivery  of  the  deeds  therefore  con- 
stituted a  valid  gift  inter  vivos  of  the  property  therein  described, 
and  it  was  not  subject  to  a  transfer  tax  upon  the  death  of  the 
grantor  (Matter  of  Hess,  110  App.  Div.  476,  aff'd  187  N.  Y. 
554;  Matter  of  Thome,  44  App.  Div.  8;  Matter  of  Masury, 
28  App.  Div.  580,  aff'd  159  N.  Y.  532).  Order  fixing  tax  re- 
versed." 

IN  MATTER  OF  HERMANN  AHRENS,  N.  Y.  Law  Journal, 
May  14,  1913,  Surrogate  Fowler  held:  "The  transfer  tax  ap- 


CONTEMPLATION   OF   DEATH  649 

praiser  found  that  the  decedent  transferred  to  his  wife  certain 
real  estate  of  the  value  of  $43,000,  and  that  the  transfer  was  in- 
tended to  take  effect  at  or  after  his  death.  The  executor  of  the 
estate  has  appealed  from  the  order  assessing  a  tax  upon  this 
property. 

"The  decedent  died  on  the  3d  of  January,  1912.  On  the  9th 
day  of  December,  1911,  he  executed  and  delivered  the  deeds 
conveying  the  real  estate  to  his  wife  and  they  were  recorded  in 
the  Register's  office  of  this  county  on  the  following  day.  The 
deeds  to  the  property  were  a  gift  from  the  decedent  to  his  wife, 
the  consideration  being  natural  love  and  affection,  but  they  were 
absolute  conveyances  without  any  conditions  or  limitations, 
and  vested  the  title  absolutely  in  the  grantee  as  soon  as  they 
were  delivered  to  her.  Therefore  they  constituted  and  effected 
an  absolute  transfer  of  the  property  therein  mentioned,  and  the 
appraiser  erred  in  finding  that  the  gift  was  intended  to  take 
effect  at  or  after  death.  But  although  the  appraiser's  finding  is 
incorrect,  the  order  fixing  tax  will  not  be  reversed  upon  this 
appeal  if  the  appraiser's  report  shows  that  the  transfer  of  the 
property  is  taxable  under  any  other  provision  of  the  Transfer 
Tax  Law. 

"While  there  was  absolute  conveyance  of  the  property  and 
transfer  of  title  prior  to  the  death  of  the  decedent,  it  would 
nevertheless  be  taxable  if  it  were  transferred  by  the  decedent  as 
a  gift  in  contemplation  of  death  (subdivision  4  of  §  220  of  the 
Tax  Law).  The  phrase  'in  contemplation  of  death'  as  used  in 
the  transfer  tax  statute  does  not  refer  to  that  general  expectation 
of  death  which  every  mortal  entertains,  but  rather  to  the 
apprehension  of  death  which  arises  from  some  existing  condi- 
tion of  body  or  some  impending  peril  (Matter  of  Baker,  83 
App.  Div.  530). 

"The  evidence  adduced  before  the  appraiser  on  behalf  of  the 
estate  shows  that  the  decedent  was  under  the  care  of  a  physician 
in  September,  1911,  although  not  confined  to  bed;  that  in 
November  he  was  visited  by  his  attorney,  who  found  him  in 
bed  and  under  the  care  of  a  physician;  that  he  was  visited  several 
times  in  December  by  the  pastor  of  the  church  to  which  he 
belonged  and  that  he  spoke  to  the  pastor  "about  the  time  he 
expected  to  be  out  again  and  attending  to  his  duties  as  a  mem- 
ber of  certain  church  organizations."  The  family  physician 
who  attended  him  made  an  affidavit  to  the  effect  that  he  did 
not  tell  the  decedent  the  nature  of  his  disease  or  the  hopeless- 


650  CONTEMPLATION    OF   DEATH 

N  ' 

ness  of  his  case  until  a  few  days  before  his  death.  He  died  from 
cancer.  There  was  no  evidence  that  the  decedent  had  con- 
sulted a  specialist,  or  that  he  had  been  examined  by  any  other 
physician  than  his  family  physician. 

"Had  the  family  physician  been  cross-examined  it  might 
have  developed  that  the  decedent  had  consulted  a  specialist 
or  some  other  physician  who  could  have  informed  him  of  the 
nature  of  the  disease  from  which  he  was  suffering.  No  evidence 
was  adduced,  nor  were  any  witnesses  examined  on  behalf  of  the 
State  Comptroller.  There  was  no  evidence  before  the  ap- 
praiser as  to  the  physical  condition  of  the  decedent  on  the  day 
when  he  executed  the  deeds  or  on  the  preceding  days,  although 
the  decedent's  wife  testified  before  the  appraiser  in  behalf  of  the 
estate  and  might  have  been  cross-examined  so  as  to  bring  out 
these  material  facts.  No  evidence  of  the  age  of  the  decedent 
at  the  time  of  his  death  was  submitted  to  the  appraiser,  and  this 
was  a  material  omission,  because  if  he  had  arrived  at  an  age 
when  even  ordinarily  healthy  men  cannot  in  the  course  of  nature 
expect  to  prolong  their  existence  beyond  a  brief  period,  the  court 
would  require  less  direct  and  positive  testimony  of  his  condition 
and  the  facts  and  circumstances  surrounding  the  execution  of 
the  deeds  in  order  to  sustain  a  finding  that  he  had  in  mind  when 
making  the  gift  the  probability  of  his  early  demise. 

"THE  BURDEN  OF  PROVING  that  the  gift  was  made  in  contem- 
plation of  death  was  upon  the  State  Comptroller  (Matter  of 
Palmer,  117  App.  Div.  160);  and  while  the  nature  of  the  case 
rendered  it  exceedingly  difficult  for  him  to  obtain  direct  and  pos- 
itive proof,  he  could  by  an  intelligent  cross-examination  of  the 
witnesses  produced  on  behalf  of  the  estate  have  obtained  some 
evidence  of  the  material  facts  herein  referred  to.  There  was 
therefore  no  evidence  before  the  appraiser  from  which  it  could 
reasonably  be  inferred  that  the  transfer  of  the  real  estate  was 
made  by  the  decedent  in  contemplation  of  his  death  (Matter  of 
Mahlstedt,  67  App.  Div.  176). 

"As  the  evidence  adduced  before  the  appraiser  does  not 
sustain  his  finding  that  the  real  estate  conveyed  by  the  decedent 
to  his  wife  was  transferred  as  a  gift  intended  to  take  effect  at  or 
after  death,  and  is  insufficient  to  warrant  a  conclusion  that  it 
was  a  gift  in  contemplation  of  death,  the  order  fixing  tax  will 
be  modified  by  reducing  the  taxable  value  of  the  estate  by 
the  sum  of  $43,000."  Vide  Burden  of  Proof,  supra,  page 
604. 


CONTRACT  651 

(5)  Notice  to  grantee 

"The  appeal  by  the  state  comptroller  from  so  much  of  the 
order  as  omitted  to  assess  a  tax  upon  the  value  of  real  property 
alleged  to  have  been  conveyed  by  the  decedent,  'in  contempla- 
tion of  death/  presents  an  interesting  question,  which  should 
not  be  passed  upon  without  notice  to  the  grantee  of  that  prop- 
erty, who  is  not  shown  to  have  had  any  notice  of  the  proceed- 
ing, and  against  whom  the  tax  must  be  assessed,  if  at  all.  The 
matter  will  be  remitted  to  the  appraiser  for  further  proceeding, 
and  report  as  to  the  taxability  of  the  transfer  of  this  real  prop- 
erty." Matter  of  Wood,  40  Misc.  155-156.  Vide  supra,  page  77. 

CONTEMPT 

In  Matter  of  Kennedy,  113  App.  Div.  4,  witness  refused  to 
answer  question  regarding  gifts  from  decedent.  The  court  say : 
"A  witness  refusing  to  answer  a  material  question  can  be 
punished  for  contempt,  and  the  surrogate,  if  applied  to  for  that 
purpose,  would  undoubtedly  have  exercised  the  power  in  such  a 
way  that  the  offense  would  not  have  been  repeated  thereafter." 
The  appraiser  had  fixed  tax  without  first  having  the  record  clear 
that  property  belonged  to  decedent,  and  the  Appellate  Division 
remitted  the  matter  for  reassessment. 

Where  executor  refused  to  furnish  information  to  appraiser 
on  ground  that  decedent  was  non-resident  and  the  information 
sought  was  concerning  non-taxable  asset's,  an  order  adjudging 
executor  in  contempt  reversed  because  executor  should  not  be 
compelled  to  answer  until  the  question  of  residence  had  been 
determined.  Matter  of  Bishop,  82  App.  Div.  112.  The  surro- 
gate may,  under  §  2546  of  Code  of  Civil  Procedure,  appoint  a 
referee  to  take  evidence  as  to  residence.  Matter  of  Bishop,  111 
App.  Div.  545,  supra,  page  343. 

SECTION  837  OF  CODE  OF  CIVIL  PROCEDURE  held  not  to  justify 
executor  in  refusing  to  answer  proper  questions  regarding  prop- 
erty of  decedent.  Vide  last  paragraph  of  digest  of  Matter  of 
Lord,  186  N.  Y.  549,  supra,  page  335. 

CONTINGENT  INTERESTS 

For  discussion  of  contingent  remainders  vide  Matter  of  Smith, 
150  App.  Div.  805.  Vide  Remainders. 

CONTRACT 

STATUTE  held  not  to  constitute  a  contract.    Matter  of  Vander- 


652  CONTROVERSY,    SUBMISSION   OF 

bilt,  50  App.  Div.  246-250,  affirmed,  on  opinion  below,  163 
N.  Y.  597. 

CONTRACT  LIABILITY  of  decedent,  vide  Deductions. 

CONTRACT  TO  LEAVE  PROPERTY  BY  WILL  vide  Matter  of 
Kidd,  188  N.  Y.  274,  supra,  page  341;  Matter  of  Demers,  41 
Misc.  470,  discussed  sub  Ante-nuptial  Contract. 

CONTROVERSY,  SUBMISSION  OF 

Code  of  Civil  Procedure,  §  1279,  provides  for  submission  of  a 
controversy  upon  an  agreed  statement  of  facts.  Catlin  v. 
Trustees  of  Trinity  College,  113  N.  Y.  133;  Isham  v.  N.  Y.  Assn. 
for  Poor,  177  N.  Y.  218;  Brown  v.  Lawrence  Park  Realty  Co., 
133  App.  Div.  753. 

CONVERSION 

Vide  Equitable  Conversion. 

COOPER  UNION 

Testator,  who  died  in  1901,  bequeathed  $5,000  to  Cooper 
Union,  and  the  transfer  was  held  taxable  although  the  charter  of 
Cooper  Union  exempts  its  endowments  from  taxation.  Matter 
of  Kucielski,  144  App.  Div.  100. 

COPARTNERSHIP . 

Vide  Partnership. 

CORPORATIONS 

Vide  Closely  Held  Stock;  Stock;  Transfer  of  Securities; 
Schedule  A4,  supra,  page  112. 

CORPUS  OF  TRUST  ESTATES 

Referring  to  the  sixth  paragraph  of  §  230  the  court  said  in 
Matter  of  Tracy,  179  N.  Y.  501-510,  "the  legislative  intention 
is  clear  that  the  transfer  tax  shall  be  paid  out  of  the  corpus  of  the 
trust  estates,  and  not  out  of  the  income."  Vide  etiam  Matter  of 
Hoyt,  44  Misc.  76;  Matter  of  Vanderbilt,  172  N.  Y.  69-73; 
Matter  of  Title  Guarantee  &  Trust  Co.,  81  Misc.  106-112; 
Matter  of  White,  208  N.  Y.  64;  Matter  of  Bass,  57  Misc.  331. 

COSTS 

SURROGATE  CANNOT  AWARD  COSTS,  the  words  in  the  first 
sentence  of  §  232,  "  but  no  costs  shall  be  allowed  by  the  surrogate 


COUNSEL   FEES  653 

on  such  appeal,"  being  added  by  chap.  310,  Laws  1908,  in  effect 
May  18,  1908.  Prior  to  this  amendment  the  awarding  of  costs 
by  surrogate  was  controlled  by  §  3240  of  Code  of  Civil  Procedure. 
Matter  of  Eaton,  55  Misc.  472. 

APPELLATE  DIVISION  refused  to  grant  costs  in  reversing  order 
of  surrogate,  the  unsuccessful  party  not  having  contested  the 
matter  before  surrogate.  Matter  of  Collins,  104  App.  Div. 
184. 

On  appeal  to  Appellate  Division  from  final  order  the  provi- 
sions of  §  3240  of  Code  of  Civil  Procedure  apply,  while  on  an 
appeal  from  an  order  not  final  the  provisions  of  §  3236  and 
subdivision  3  of  §  3251  apply.  If  costs  are  awarded,  disburse- 
ments under  §  3256  are  included  as  a  matter  of  course.  Matter 
of  Babcock,  86  App.  Div.  563. 

Appellate  Division  and  Court  of  Appeals  in  its  discretion,  may 
refuse  to  award  costs  against  the  unsuccessful  party,  under 
§  3240  of  Code  of  Civil  Procedure.  Matter  of  Huntington,  168 
N.  Y.  399-411;  Matter  of  Chappell,  151  App.  Div.  774-776. 

May  award  only  small  amount  of  costs  where  limited  amount 
involved.  Matter  of  Purdy,  24  Misc.  301-303. 

May  be  awarded  to  each  respondent  appearing  by  separate 
attorneys.  Matter  of  Gibson,  33  App.  Div.  628,  affirmed,  157 
N.  Y.  680. 

DISTRICT  ATTORNEY  PROCEEDINGS  UNDER  §  235.  In  Matter 
of  Brady,  N.  Y.  Law  Journal,  February  5, 1913,  district  attorney 
proceedings  were  instituted  under  §  235  and  in  dismissing  the 
proceedings  the  surrogate  awarded  costs  against  the  state  comp- 
troller under  §  2561  of  the  Code  of  Civil  Procedure. 

District  attorney  entitled  to  costs  of  not  over  $100  where  there 
has  not  been  a  contest,  and  to  costs  of  not  over  $250  where  there 
has  been  a  contest. 

CO-TENANT 

Vide  Deductions,  post,  page  658. 

COUNSEL  FEES 

Will  be  allowed  as  a  deduction.  Vide  Schedule  B2,  supra, 
page  126. 

IN  NON-RESIDENT  estate  vide  page  147. 

THE  STATE  COMPTROLLER  is  authorized  by  the  provisions  of 
the  last  sentence  of  §  235,  supra,  page  24,  "  to  designate  and 
retain  counsel." 


054  COUNTY 

COUNTY 

IN  RESIDENT  ESTATES  the  county  where  the  decedent  was  a 
resident  at  the  time  of  his  death  is  the  proper  county  to  bring 
transfer  tax  proceedings.  Tax  Law,  §  228  and  subd.  1  of  §  2476 
of  Code  of  Civil  Procedure.  Vide  Procedure  supra,  page  56. 

As  to  NON-RESIDENT  ESTATES  vide  Matter  of  Hathaway,  27 
Misc.  474,  and  supra,  page  137. 

COUNTY  CLERK 

It  is  the  duty  of  the  county  clerk,  except  in  the  counties  where 
the  registers  perform  the  duties  of  the  county  clerks  with  respect 
to  the  recording  of  deeds,  to  make  report  to  state  comptroller 
"  of  any  deed  or  other  conveyance  filed  or  recorded  in  his  office, 
of  any  property,  which  appears  to  have  been  made  or  intended 
to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor  or  vendor."  Section  239.  Vide  Gift;  Trust  Deed. 

CERTIFICATE  re  real  estate  to  be  recorded  in  office  of  county 
clerk,  vide  last  sentence  of  §  236,  and  supra,  page  97. 

Quarterly  report  of,  vide  §  239,  supra,  page  27. 

COUNTY  TREASURER 

ACTS  AS  APPRAISER  except  in  the  seventeen  counties  of 
Albany,  Bronx,  Dutchess,  Erie,  Kings,  Monroe,  Nassau,  New 
York,  Niagara,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer, 
Richmond,  Suffolk  and  Westchester.  First  sentences  of  §§  229 
and  230. 

TAX  MUST  BE  PAID  TO  COUNTY  TREASURER  except  in  the 
above-mentioned  seventeen  counties.  Section  222;  People  ex 
rel.  Lown  v.  Cook,  158  App.  Div.  74,  aff'd,  without  opinion,  209 
N.  Y.  mem.  Vide  fifth  sentence  of  §  243,  supra,  page  31. 

Section  230  authorizing  County  Treasurer  to  act  as  ap- 
praiser is  constitutional,  although  by  §  237  his  fees  are  based 
upon  the  amount  of  the  tax.  Matter  of  Fuller,  62  App.  Div. 
428. 

Receipts  issued  by,  §  236,  supra,  page  25. 

Quarterly  report  of,  vide  §  240,  supra,  page  27. 

COURT  OF  APPEALS 

Vide  Appeal;  Costs. 

The  Court  of  Appeals  Decisions,  supra,  page  159. 

COUSIN 

Entitled  to  one  thousand  dollars  exemption  and  subject  to 
the  rates  of  tax  set  forth  in  subd.  2  of  §  221a;  supra,  page  47. 


DECEDENT   ESTATE   LAW  655 

CURTESY 

Curtesy  not  subject  to  tax  prior  to  1911  amendment.  Matter 
of  Star-buck,  63  Misc.  156,  affirmed,  201  N.  Y.  531.  Vide 
Matter  of  Green,  144  App.  Div.  232,  and  Matter  of  Andrews, 
N.  Y.  Law  Journal,  February  21,  1912,  quoted  sub  Husband. 

As  to  NON-RESIDENT  estates  vide  supra,  page  36. 

By  Laws  1911,  chap.  732,  in  effect  July  21,  1911,  §  243  was 
amended  by  adding  to  it  what  now  forms  the  last  sentence  of 
said  section.  In  the  case  of  an  intestate  dying  subsequent  to 
July  21,  1911,  it  was  held  that  the  husband's  estate  by  curtesy 
did  not  vest  until  the  death  of  his  wife,  and  that  the  value  of 
such  estate  was  subject  to  the  tax.  Matter  of  Matilda  Beck- 
hardt,  N.  Y.  Law  Journal,  June  7, 1913. 

DEBTS  OF  DECEDENT 

Vide  schedule  B3,   supra,  page  129;   Deductions;   Pledged 
Securities. 
As  to  NON-RESIDENT  estate  vide  supra,  page  147. 

DEBTS  DUE  DECEDENT 

Vide  Schedule  A3,  supra,  page  109  and  page  111.  Vide  Chose 
in  Action,  page  609. 

DECEDENT  ESTATE  LAW 

The  Decedent  Estate  Law,  chap.  13  of  the  Consolidated 
Laws,  volume  1,  pages  497-522,  as  amended,  is  set  forth,  supra, 
page  535. 

Surrogate  of  Broome  County  in  Matter  of  Crary,  31  Misc. 
72  (1900),  upheld  the  appraiser  in  placing  the  value  of  the 
stocks  by  taking  the  average  sales  of  the  same  for  the  three 
months  next  prior  to  decedent's  death,  basing  his  decision  upon 
§  1,  chap.  34,  Laws  1891,  now  §  122  of  Decedent  Estate  Law, 
supra,  page  561. 

It  was  held  that  this  section  of  the  Decedent  Estate  Law  was 
applicable  in  the  valuation  of  stocks  and  bonds,  Surrogate 
Cohalan  holding  hi  Matter  of  Kennedy,  N.  Y.  Law  Journal, 
March  8,  1911,  that  the  appraiser  "should  have  ascertained  the 
average  prices  at  which  the  securities  were  sold  within  a  reason- 
able time  before  and  after  decedent's  death  and  made  his 
calculations  upon  that  basis.  He  should  have  ascertained  the 
value  of  the  active  securities  in  the  manner  prescribed  by 


656  DECREE    OF    SURROGATE 

section  1,  chapter  34  of  the  Laws  of  1891,  and  the  average  price 
of  these  securities  for  a  period  of  two  months  before  and  two 
months  after  decedent's  death  would  represent  the  fair  market 
value  of  these  securities  at  the  date  of  decedent's  death." 

Vide  Schedule  A4,  supra,  page  113. 

The  surrogate  of  Sullivan  County  held,  in  Matter  of  Proctor, 
41  Misc.  79,  that  where  sales  of  stock  were  made  in  the  regular 
and  usual  course  of  business,  and  some  of  them  at  auction,  it  was 
proper  for  appraiser  to  receive  testimony  as  to  sales  during  year 
of  decedent's  death,  although  the  stock  was  inactive  and  sales 
infrequent.  Vide  supra,  page  628. 

NOT  CONTROLLING  in  valuing  inactive  stock.  Matter  of 
Curtice,  111  App.  Div.  230,  affirmed,  without  opinion,  185 
N.  Y.  543.  Vide  cases  cited  sub  Closely  Held  Stock. 

IN  NON-RESIDENT  ESTATES  the  disposition  of  New  York 
real  estate  is  regulated  by  the  laws  of  this  state.  Section  47  of 
Decedent  Estate  Law;  Matter  of  Turner,  82  Misc.  25-28. 

DECREE  OF  SURROGATE 

Vide  Vacating  Decree;  Surrogate. 

Declaring  estate  exempt  from  tax,  page  84;  fixing  tax, 
page  50;  non-resident  estates,  page  157. 

DEDUCTIONS 

(1)  Administration    and    funeral          (5)  Debts. 

expenses.  (6)  Mortgages. 

(2)  Ante-nuptial  contract.  -(7)  Blanket  mortgage. 

(3)  Contract  liability.  (8)  Taxes. 

(4)  Cotenant's  advancements.  (9)  Non-resident. 

(1)  Administration  and  funeral  expenses 

Discussion  of,  sub  Schedules  B1  and  B2  supra,  pages  124 
and  125. 

FEDERAL  INHERITANCE  TAX  not  allowed  as  deduction. 
Matter  of  Gihon,  169  N.  Y.  443;  Matter  of  Becker,  26  Misc. 
634-635;  Matter  of  Irish,  28  id.  647;  Matter  of  Curtis,  31  id.  83. 

INHERITANCE  TAX  IN  FOREIGN  STATE  not  to  be  deducted. 
Matter  of  Kennedy,  20  Misc.  531;  Matter  of  Penfold,  81  id.  598. 

(2)  Ante-nuptial  contract 

Claim  is  in  nature  of  debt  against  the  estate  and  as  such  is 
enforcible  like  any  other  debt.  Matter  of  Baker,  83  App.  Div. 


DEDUCTIONS  657 

530,  affirmed,  on  opinion  below,  178  N.  Y.  575.    Vide  cases  cited 
sub  Ante-nuptial  Contract. 

(3)  Contract  liability 

Contracts  were  entered  into  by  decedent,  who  died  in  1893, 
and  the  question  arose  as  to  whether  there  should  be  allowed  as  a 
deduction  the  amount  of  the  contract  liabilities.  From  the 
printed  papers  on  appeal,  Matter  of  Kemp,  7  App.  Div.  609, 
affirmed,  on  opinion  below,  151  N.  Y.  619,  it  appears  that  at  the 
time  of  his  death  testator  was  erecting  a  large  building  upon 
real  property  owned  by  him  and  had  many  contracts  with  build- 
ers and  for  materials  to  be  paid  at  future  dates.  At  the  time  of 
his  death  there  was  unpaid  upon  said  contracts  the  sum  of 
$251,051.90,  said  amount  not  being  then  due  or  earned.  The 
surrogate,  whose  order  as  to  this  ruling  was  affirmed,  said:  "In 
refusing  to  deduct  from  the  amount  of  personal  property  the 
sum  paid  by  the  executors  in  carrying  out  the  contract  made  by 
the  decedent  for  the  erection  of  buildings  upon  real  property 
owned  by  him,  the  appraiser  acted  properly." 

In  Matter  of  Gustav  Amsinck,  N.  Y.  Law  Journal,  Febru- 
ary 21,  1913,  Surrogate  Fowler  held:  "This  is  an  appeal  by  the 
executors  from  the  order  fixing  tax  upon  the  estate  of  the  above 
named  decedent,  according  to  the  transfer  tax  appraiser's  report, 
which  refused  to  allow  as  a  debt  of  decedent  the  sum  of  $43,000, 
being  the  amount  of  a  contract  entered  into  by  decedent  in  his 
lifetime  for  alterations  to  a  specific  piece  of  real  estate  owned  by 
decedent  at  the  time  of  his  death.  The  premises  referred  to  are 
specifically  devised  by  the  testator  to  his  widow,  and  it  is  con- 
tended by  the  executors  that  the  contract  for  the  expenditure  of 
the  amount  stated  was  entered  into  by  the  decedent  in  his  life- 
time, and  was  a  debt  upon  which  a  recovery  could  be  had  if  an 
action  were  brought  against  the  testator  in  his  lifetime,  or  after 
his  death,  against  his  executors.  The  fact  that  this  indebtedness 
was  incurred  for  any  specific  piece  of  real  estate,  and  that  that 
piece  of  real  estate  should  therefore  be  charged  with  this  pay- 
ment, does  not  seem  to  be  a  correct  view  to  take  of  the  transac- 
tion. There  was  no  evidence  offered  before  the  appraiser  to 
show  that  the  contract  was  not  a  valid  debt  against  the  deced- 
ent's estate,  and  in  the  absence  of  this  proof  it  must  be  accepted 
as  a  valid  debt  against  his  estate;  and  being  proved  as  a  valid 
debt  against  his  estate,  it  was  a  valid  debt  against  all  of  his 
estate  and  not  against  any  specific  part  of  it.  Accordingly,  the 
42 


658  DEDUCTIONS 

appeal  is  sustained,  and  this  debt  declared  to  be  a  valid  debt  of 
decedent  chargeable  against  his  whole  estate,  and  the  report  of 
the  transfer  tax  appraiser  should  be  remitted  for  the  purpose  of 
correction  in  the  respect  noted." 

It  would  seem  that  if  the  expense  of  improvements  to  the 
property  of  decedent  is  to  be  deducted,  that  the  property  should 
be  appraised  with  the  improvements.  It  hardly  seems  equitable 
to  say  that  the  expense  of  the  improvements  should  be  deducted 
from  the  assets  of  the  estate,  but  the  value  of  such  improve- 
ments should  not  be  taken  into  consideration. 

ANNUITY.  In  Matter  of  Daniell,  40  Misc.  329,  the  decedent, 
four  years  before  his  death,  entered  into  an  agreement  between 
himself,  his  wife  and  a  third  person  as  trustee  whereby  he 
agreed  to  pay  his  wife  an  annuity,  and  the  agreement  further 
provided  that  upon  his  death  the  trustee  might  (if  the  wife 
elected  to  do  so)  demand  payment  of  a  gross  sum  to  be  calculated 
upon  her  probable  duration  of  life  according  to  the  Northampton 
Tables.  The  wife  accepted  this  agreement  in  lieu  of  all  claims 
for  support  and  in  lieu  of  dower  as  well  as  in  lieu  of  any  claim 
to  a  distributive  share  of  the  decedent's  estate.  The  will  recited 
the  agreement,  and  authorized  the  executors,  in  case  his  wife 
should  not  elect  to  receive  a  gross  sum  in  lieu  of  said  annuity,  to 
set  aside  a  sum  sufficient  to  pay  annuity.  The  appraiser  refused 
to  deduct  value  of  annuity,  the  wife  not  having  elected  to  take 
a  gross  sum;  the  surrogate  reversed  appraiser  and  held  that 
the  value  of  the  annuity  be  deducted  from  taxable  value  of 
estate. 

LEASE,  vide  Schedule  B3,  supra,  page  132. 

(4)  Cotenant's  advancements 

COVENANT'S  ADVANCEMENTS  for  necessary  and  lasting  im- 
provements on  the  common  property,  although  made  thirty- 
years  before  death  of  decedent  by  the  ancestor  of  the  cotenants 
of  the  decedent,  held  by  Surrogate  Brown,  Monroe  County,  to 
be  deductions  that  should  be  made  from  decedent's  interest  in 
the  real  estate  held  by  decedent  and  others  as  tenants  in  com- 
mon. Matter  of  Wood,  68  Misc.  267. 

(5)  Debts 

Vide  Schedule  B3  supra,  page  129. 

Etiam  third  sentence  of  §  225,  supra,  page  10,  and  the  first 
sentence  of  said  section  cited  post,  page  880. 


DEDUCTIONS  659 

(6)  Mortgages 

Should  be  set  forth  under  Schedule  A1,  supra,  page  101. 

MORTGAGES  to  be  deducted  from  real  estate  and  not  from 
personal  estate  of  decedent.  Matter  of  Sutton,  3  App.  Div. 
208-212,  affirmed,  on  opinion  below,  149  N.  Y.  618;  Matter  of 
Livingston,  1  App.  Div.  568;  Matter  of  Maresi,  74  App.  Div. 
76-79. 

Cases  have  held  that  even  though  will  contains  a  direction 
that  mortgages  be  paid  out  of  personalty  still  for  transfer  tax 
purposes  the  deductions  should  be  made  from  the  value  of  the 
real  estate.  Matter  of  Offerman,  25  App.  Div.  94;  Matter  of 
Murphy,  157  N.  Y.  679;  Matter  of  De  Graaf,  24  Misc.  147-149. 

The  case  of  Berry,  23  Misc.  230,  calls  attention  to  the  Real 
Property  Law  now  §  250,  and  says  "there  does  not  seem  to  be 
any  necessity  for  reading  the  two  statutes  together." 

Bond  and  mortgage  should  be  deducted  from  value  of  mort- 
gaged premises  and  not  from  personal  estate.  Matter  of  Mur- 
phy, 157  N.  Y.  679;  Matter  of  Maresi,  74  App.  Div.  76-79. 

(7)  Blanket  Mortgage 

In  Matter  of  Michael  Tremberger,  N.  Y.  Law  Journal, 
March  7,  1912,  the  decedent  in  his  lifetime  owned  two  parcels 
of  real  estate,  and  conveyed  one  of  them  to  his  wife  subject  to 
one-half  of  a  mortgage  then  existing  on  both  parcels.  Surrogate 
Fowler  held  that  only  one-half  of  the  mortgage  should  be  de- 
ducted from  his  estate,  unless  it  should  appear  that  the  value  of 
the  one-half  conveyed  to  his  wife  was  less  than  the  one-half  of 
the  mortgage  subject  to  which  it  was  conveyed,  the  Surrogate 
saying:  "The  executrix  of  the  estate  of  decedent  appeals  from 
the  order  assessing  a  tax  upon  his  estate. 

"  The  decedent,  who  was  a  resident  of  New  York,  died  on  the 
18th  of  May,  1910.  On  the  23d  day  of  May,  1907,  he  purchased 
the  premises  known  as  Nos.  430  and  432  Wales  avenue,  in  the 
Borough  of  the  Bronx,  City  of  New  York,  subject  to  two  mort- 
gages aggregating  $10,500.  On  the  same  day  he  conveyed  to  his 
wife,  Wilhelmina  Tremberger,  the  premises  No.  430  Wales 
avenue,  subject  to  one-half  of  the  two  mortgages  aggregating 
$10,500.  Neither  in  the  deed  by  which  the  premises  were  con- 
veyed to  the  decedent,  nor  in  the  deed  by  which  he  conveyed 
No.  430  to  his  wife,  did  the  grantee  assume  the  mortgage  or  agree 
to  pay  the  mortgage  indebtedness,  but  the  premises  were  in 
each  case  conveyed  subject  to  the  existing  mortgages.  The  ap- 


(560  DEDUCTIONS 

praiser  ascertained  the  value  of  the  premises  No.  432  Wales 
avenue,  of  which  the  decedent  died  seized,  and  deducted  there- 
from $5,250,  this  sum  being  one-half  of  the  amount  of  the 
mortgages  covering  Nos.  430  and  432  Wales  avenue.  The 
executrix  contends  that  the  appraiser  had  no  authority  to  de- 
duct one-half  of  the  aggregate  of  the  two  mortgages  from  the 
value  of  the  premises  of  which  the  decedent  died  seized,  and 
alleges  that  the  entire  amount  of  the  two  mortgages  should  be 
deducted  from  that  part  of  the  mortgaged  premises  of  which  the 
decedent  died  seized. 

"  Section  230  of  the  Transfer  Tax  Law  provides  that  the  ap- 
praiser shall  appraise  the  property  of  decedent  at  its  fair  market 
value  at  the  date  of  decedent's  death.  His  powers  and  duties 
are  of  a  quasi-judicial  character,  and  he  may  take  such  proof  as 
will  enable  him  to  report  to  the  surrogate  the  clear  market  value 
of  the  property  of  which  the  decedent  died  seized  or  possessed 
(People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35).  Therefore, 
the  appraiser  had  the  right  to  procure  such  information  and  as- 
certain such  facts  as  would  enable  him  to  determine  the  value  of 
decedent's  interest  in  the  premises. 

"  As  the  decedent  took  the  entire  parcel  known  as  Nos.  430  and 
432  Wales  avenue  subject  to  the  mortgages  aggregating  $10,500, 
but  did  not  assume  or  promise  to  pay  the  mortgage  indebtedness, 
and  as  the  decedent's  grantee  took  the  premises  No.  430  Wales 
avenue  subject  to  one-half  of  the  mortgages  covering  the  entire 
parcel,  but  did  not  agree  to  pay  any  part  of  the  mortgage  in- 
debtedness, the  mortgagee  could  not,  in  the  event  of  the  mort- 
gage being  foreclosed  and  the  premises  sold  for  less  than  the 
mortgage  indebtedness,  obtain  a  deficiency  judgment  against  the 
legal  representative  of  the  decedent  or  against  his  grantee 
(Stebbins  v.  Hall,  29  Barb.  524;  Argall  v.  Pitts,  78  N.  Y.  239; 
Smith  v.  Truslow,  84  N.  Y.  660).  While  no  act  or  agreement  of 
the  original  mortgagors,  or  their  successors  in  interest,  could 
change  or  impair  the  lien  of  the  mortgage  upon  all  the  land 
covered  by  it,  yet  as  between  the  decedent  and  his  grantee  the 
premises  conveyed  by  him  subject  to  one-half  of  the  existing 
mortgages  would  be  liable  for  the  full  amount  of  the  mortgage 
indebtedness  subject  to  which  it  was  conveyed  (Hagg  v.  Rose, 
183  N.  Y.  182).  If  the  value  of  such  premises  at  the  date  of 
decedent's  death  exceeded  the  amount  of  the  mortgage  subject 
to  which  it  was  conveyed,  no  deduction  on  account  of  such 
mortgage  indebtedness  should  be  made  from  the  value  of  that 


DEDUCTIONS  661 

part  of  the  mortgaged  premises  of  which  the  decedent  died 
seized.  But  if  the  value  of  such  premises  was  less  than  the 
amount  of  the  mortgage  subject  to  which  they  were  conveyed 
by  decedent,  then,  as  in  the  event  of  a  deficiency  on  foreclosure 
there  would  be  no  personal  liability  on  the  part  of  the  decedent 
or  his  grantee,  the  difference  between  the  value  of  the  premises 
and  the  amount  of  the  mortgage  indebtedness  subject  to  which 
they  were  conveyed  by  the  decedent  should  be  deducted  from 
the  value  of  that  part  of  the  mortgaged  premises  of  which  the 
decedent  died  seized.  But  as  the  appraiser's  report  does  not 
contain  any  evidence  as  to  the  value  of  the  premises  No.  430 
Wales  avenue,  it  is  impossible  for  the  court  to  determine  whether 
the  appraiser  was  justified  in  deducting  only  one-half  of  the 
mortgages  from  that  part  of  the  mortgaged  premises  of  which 
the  decedent  died  seized.  The  appraiser's  report  should  there- 
fore be  remitted  to  him  for  the  purpose  of  ascertaining  the  value 
of  the  premises  conveyed  by  the  decedent  subject  to  one-half 
of  the  mortgages  covering  the  entire  plot;  and  in  the  event  of 
such  value  being  less  than  the  amount  of  the  mortgages  subject 
to  which  it  was  conveyed,  to  correct  his  report  as  herein  in- 
dicated." 

UPON  THE  AMENDED  REPORT  in  the  Tremberger  case,  Surro- 
gate Fowler,  N.  Y.  Law  Journal,  October  31,  1913,  held:  "This 
is  an  appeal  by  the  executrix  of  the  decedent  from  the  report 
of  the  transfer  tax  appraiser  and  the  order  entered  thereon. 
The  decedent  in  his  lifetime  was  the  owner  of  the  premises 
known  as  Nos.  430-432  Wales  avenue,  Borough  of  the  Bronx. 
It  appears  from  a  certified  copy  of  a  deed,  with  the  proofs  an- 
nexed to  the  appraiser's  report,  filed  herein  on  December  17, 
1911,  the  said  premises,  forming  a  plot  fifty  feet  front  and  rear 
and  one  hundred  feet  on  each  side,  were  conveyed  to  him  by  a 
deed  dated  and  recorded  May  22,  1907.  The  premises  thus 
conveyed  to  him  were  described  by  one  description  in  said  deed, 
and  were  conveyed  subject  to  two  mortgages,  each  covering 
the  entire  premises,  aggregating  in  amount  $10,500.  In  like 
manner,  among  the  proofs  annexed  to  said  report  a  certified 
copy  of  the  deed  is  found  dated  May  23,  1907,  and  recorded 
May  24,  1907,  by  which  the  decedent  herein,  Michael  Trem- 
berger, conveyed  to  Wilhelmine  Tremberger  the  premises  known 
as  No.  430  Wales  avenue,  being  a  plot  twenty-five  feet  front  and 
rear  and  one  hundred  feet  on  either  side. 

"This  deed  contains  the  following  provision: '  Subject  to  one- 


662  DEDUCTIONS 

half  of  the  amount  of  two  mortgages  aggregating  the  sum  of 
$10,500  covering  the  premises  conveyed  and  the  premises  ad- 
joining on  the  north  known  as  No.  432  Wales  avenue.'  From 
this  it  appears  that  the  decedent  in  his  lifetime  apportioned  the 
mortgages  on  the  two  lots  owned  by  him  on  the  occasion  of  the 
conveyance  of  one  of  them.  The  contention  of  the  appellant 
that  the  appraiser  made  the  apportionment  fails,  because,  as 
just  shown,  the  decedent  made  it  himself,  and  the  appraiser 
apparently  accepted  this  apportionment  as  binding  upon  the 
executrix  herein,  and  consequently  upon  him  in  the  preparation 
of  his  report.  Order  fixing  tax  affirmed. ' ' 

(8)  Taxes 

Not  to  be  deducted  where  decedent  dies  before  books  closed 
for  correction.  Matter  of  Maresi,  74  App.  Div.  76;  Matter  of 
Freund,  143  App.  Div.  335,  affirmed,  202  N.  Y.  556. 

When  so  far  completed  that  the  name  of  the  person  designated 
as  owner  cannot  be  changed  or  altered  by  the  assessment 
officers  they  are  payable  out  of  decedent's  estate  and  are  proper 
deductions.  Matter  of  Hoffman,  42  Misc.  92,  citing  Matter  of 
Babcock,  115  N.  Y.  450-456,  and  subdivision  2  of  §  2719  of  Code 
of  Civil  Procedure. 

Deducted  as  assessed  against  decedent  in  Allegany  County, 
although  the  taxes  were  not  levied.  Matter  of  Brundage,  31 
App.  Div.  348.  Taxes  payable  at  time  of  decedent's  death 
deducted.  Matter  of  Liss,  39  Misc.  123. 

NEW  YORK  CITY  personal  taxes  assessed  against  the  testator 
for  the  year  1912  allowed  as  a  deduction  from  the  assets  of  his 
estate,  the  testator  having  died  November  7,  1911.  Matter  of 
Henry  Dormitzer,  N.  Y.  Law  Journal,  February  6,  1913. 

Taxes  on  real  estate  situated  without  the  state  not  allowed 
as  a  deduction  in  the  absence  of  evidence  showing  that  such 
taxes  are  not  a  personal  liability  of  decedent.  Matter  of  Lennox, 
N.  Y.  Law  Journal,  June  11,  1908. 

(9)  Non-resident 

For  discussion  vide  Non-resident  Estates  supra,  page  147. 

DEBTS  DUE  NON-RESIDENT  CREDITORS  should  be  pro  rated, 
as  well  as  mortuary  expenses,  commissions  on  property  without 
the  State  and  other  administration  expenses  in  respect  to  such 
property.  Matter  of  Browne,  195  N.  Y.  522;  Matter  of  Porter, 
67  Misc.  19,  affirmed,  148  App,  Div.  896. 


DEFINITIONS  663 

In  Matter  of  Badger,  N.  Y.  Law  Journal,  June  8,  1912,  held 
that  where  the  appraiser  had  not  made  the  deductions  in  ac- 
cordance with  the  rule  in  the  Porter  case,  supra,  the  proper 
remedy  was  by  appeal,  and  if  appeal  had  not  been  taken  that 
surrogate  would  not  modify  decree  fixing  tax  as  the  error  was 
one  of  law. 

DEBTS  OF  RESIDENT  CREDITORS  should  be  deducted  from 
New  York  assets.  Matter  of  King,  172  N.  Y.  616;  Matter  of 
Grosvenor,  193  N.  Y.  652.  Vide  Pledged  Securities. 

"Under  the  decision  in  the  Matter  of  Porter  (67  Misc.  19, 
aff'd,  148  App.  Div.  896)  the  appraiser  should  have  deducted 
from  the  New  York  assets  the  debts  due  to  residents  of  this 
State  and  then  deducted  the  foreign  debts  and  administration 
expenses  in  the  proportion  which  the  New  York  assets  bore  to 
the  entire  assets  of  the  estate."  Matter  of  Yerkes,  N.  Y.  Law 
Journal,  December  5,  1912. 

DEED 

County  clerk  or  register  reports  to  state  comptroller  the  filing 
or  recording  of  any  deed  "which  appears  to  have  been  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor  or  vendor."  Section  239. 

"  The  transfer  tax  statute  does  not  impose  a  tax  upon  a  trans- 
fer of  property  which  is  made  for  a  valuable  consideration." 
Matter  of  Heiser,  N.  Y.  Law  Journal,  July  19,  1913,  opinion 
quoted  post,  page  804.  For  discussion  of  question  as  to  transfer 
by  deed  given  for  a  consideration,  vide  supra,  page  37. 

As  to  when  transfer  subject  to  tax  vide  cases  cited  sub  Gift 
and  Trust  Deed. 

UNRECORDED  deed  not  delivered  by  grantor;  held,  that  prop- 
erty subject  to  tax.  Matter  of  Sharer,  36  Misc.  502;  Matter  of 
Jones,  65  id.  121. 

For  discussion  of  subd.  4  of  §  220,  vide  supra,  page  35. 

DEED  OF  TRUST 

Vide  Trust  Deed. 

DEFEASIBLE  INTERESTS 

Vide  Remainders. 

DEFINITIONS 

For  the  definitions  of  the  statute  vide  §  243,  page  30. 


064  DELAY       . 

DELAY 

Vide  Interest. 

DELINQUENT  ESTATES 

Two  additional  appraisers  appointed  in  New  York  County  to 
whom  are  referred  delinquent  estates,  under  provisions  of 
second  sentence  of  §  229. 

As  to  proceedings  under  §  235  vide  Matter  of  Pearsall,  N.  Y. 
Law  Journal,  February  2,  1912,  and  other  cases  sub  District 
Attorney. 

DEPOSITIONS 

Commission  to  take  testimony  of  witnesses  not  within  the 
state  under  §§  887-888  of  Code  of  Civil  Procedure  may  be 
issued  by  surrogate  provided  the  proof  upon  the  application 
shows  that  surrogate  has  jurisdiction  of  the  property  for  trans- 
fer tax  purposes.  Matter  of  Wallace,  71  App.  Div.  284. 

DEPOSITS  IN  BANKS 

Vide  Bank  Deposits;  Property  held  in  Trust  for  or  Jointly 
with  Others. 

DESCENT  AND  DISTRIBUTION 

The  statutory  provisions  of  descent  and  distribution  are 
contained  in  Decedent  Estate  Law,  supra,  page  548. 
Vide  Schedule  D,  supra,  page  94. 

DETRACTION 

The  tax  is  not  a  detraction  tax  and  does  not  violate  our 
treaties  with  foreign  nation  re  droit  de  detraction.  Matter  of 
Strobel,  39  N.  Y.  Supp.  169,  affirmed,  per  curiam,  5  App.  Div. 
621. 

DEVOLUTION  OF  TITLE 

Vide  Schedule  A1,  supra,  page  102. 

As  to  tax  on,  Matter  of  Green,  153  N.  Y.  223,  supra,  page  216; 
Matter  of  Wolfe,  179  N.  Y.  599,  supra,  page  297;  Matter  of 
Keeney,  194  N.  Y.  281,  supra,  page  360;  Matter  of  White,  208 
N.  Y.  64,  supra,  page  390;  Matter  of  Agnew,  N.  Y.  Law  Journal, 
December  13,  1913,  supra,  page  53.  Vide  etiam  cases  cited  sub 
Power  of  Appointment;  Remainders;  Trust  Deed;  Time  of  Tax. 


DISTRICT   ATTORNEY  665 


DISCOUNT 

Vide  Interest. 


DISPUTED  CLAIMS 

Vide  Compromise  of  Claim;  etiam  Schedule  B3,  supra, 
page  131. 

DISTRICT  ATTORNEY 

(1)  Former  appraisal  a  bar.  (4)  Costs. 

(2)  Necessary  allegations.  (5)  When  tax  not  a  lien. 

(3)  District    attorney    has    not          (6)  Decree  not  modified  although 

exclusive  right.  district  attorney  consented. 

(1)  Former  appraisal  a  bar 

By  direction  of  Comptroller  District  Attorney  of  New  York, 
filed  his  petition  for  the  assessment  and  collection  of  tax  in  an 
estate  where  the  surrogate  had  already  made  an  order.  Held, 
that  surrogate's  order  was  a  complete  bar  to  District  Attorney 
proceedings.  Matter  of  Wolfe,  137  N.  Y.  205. 

(2)  Necessary  allegations 

In  Matter  of  Catherine  McGee,  N.  Y.  Law  Journal,  May  3, 
1912,  Surrogate  Cohalan  held:  "This  is  an  application  by  the 
district  attorney  for  an  order  directing  Catherine  Molloy,  a 
legatee  under  the  will  of  the  decedent,  to  pay  a  balance  of  a  tax 
alleged  to  be  due  on  her  legacy.  The  petition  alleges  that  the 
tax  assessed  upon  the  estate  of  decedent  was  paid  in  1898,  but 
that  the  sum  then  paid  'apparently  represents  a  payment  on 
account  of  principal.'  It  is  not  alleged  that  the  tax  assessment 
upon  the  legacy  of  Catherine  Molloy  was  not  paid  in  full  nor 
is  it  alleged  that  any  part  of  the  tax  assessed  upon  her  legacy 
still  remains  unpaid.  In  the  absence  of  such  necessary  allega- 
tions the  court  will  not  make  a  decree  directing  payment." 

Another  application  was  made  by  district  attorney  in  this 
estate  and  granted.  Vide  opinion  quoted  sub  Payment  of  Tax, 
page  762. 

District  attorney  obtained  an  order  to  show  cause  why 
administrators  should  not  pay  transfer  tax  previously  assessed. 
On  return  day  it  appeared  that  tax  had  been  assessed  without 
notice  to  sole  heir  at  law.  Surrogate  held  that  the  order  ob- 
tained by  District  Attorney  must  be  dismissed  as  the  failure  to 
give  notice  in  original  proceedings  was  a  fatal  defect.  Matter  of 
Winters,  21  Misc.  552. 


666  DISTRICT  ATTORNEY 

• 

(3)  District  attorney  has  not  exclusive  right 

In  Matter  of  Phebe  Pearsall,  N.  Y.  Law  Journal,  February  2, 
1912,  Surrogate  Fowler  held  that  although  more  than  eighteen 
months  have  elapsed  since  the  death  of  the  decedent,  the  Surro- 
gate may  upon  the  petition  of  any  interested  party  designate 
an  appraiser,  and  the  District  Attorney  has  not  the  exclusive 
right  to  commence  such  proceedings.  The  surrogate  in  his 
opinion  said:  "This  is  a  motion  by  the  State  Comptroller  to 
have  the  surrogate  assess  a  tax  upon  the  remainder  after  the 
life  estate  of  Frances  Pearsall  Field  in  the  residuary  estate  of  the 
decedent. 

"Under  the  provisions  of  decedent's  will  this  residuary  estate 
was  to  be  held  in  trust  for  the  benefit  of  Frances  Pearsall  Field 
during  her  life,  and  upon  her  death  the  trustees  were  directed 
to  divide  it  among  her  issue  then  surviving.  The  value  of  this 
life  estate  was  ascertained  by  the  appraiser  who  was  designated 
to  appraise  the  estate  for  the  purpose  of  the  transfer  tax;  but 
as  the  statute  in  existence  at  the  date  of  decedent's  death 
provided  that  future  or  contingent  estates  should  not  be  taxed 
until  they  vested  in  possession,  he  did  not  ascertain  the  value 
of  the  remainder  after  the  life  estate  of  Frances  Pearsall  Field, 
and  the  order  entered  upon  his  report  did  not  assess  a  tax  upon 
this  remainder. 

"  It  is  alleged  in  the  moving  papers  that  Frances  Pearsall  Field 
died  on  the  21st  day  of  July,  1907,  leaving  her  surviving  four 
children  and  the  child  of  one  of  her  children  who  predeceased 
her.  These  children,  therefore,  became  entitled  to  the  possession 
of  the  remainder  on  the  21st  day  of  July,  1907,  and  the  tax  upon 
their  respective  interests  accrued  upon  that  date.  The  attorney 
for  the  executor  contends  that  the  district  attorney  and  not  the 
State  Comptroller  is  the  proper  party  to  commence  this  pro- 
ceeding, and  he  asks  that  the  surrogate  pass  upon  this  pre- 
liminary objection  before  going  into  the  merits  of  the  applica- 
tion to  assess  the  tax. 

"This  is  an  application  to  assess  a  tax  and  not  a  motion  to 
compel  the  payment  of  a  tax.  The  distinction  is  material, 
.because  while  sections  230  and  231  of  the  Tax  Law  prescribe 
how  the  value  of  estates  shall  be  ascertained  and  the  tax  assessed 
thereon,  section  235  prescribes  the  method  of  procedure  to  be 
adopted  for  the  purpose  of  enforcing  payment  of  the  tax. 
Section  230  provides  that  the  surrogate  may,  upon  his  own 
motion  or  upon  the  application  of  any  interested  person, 


DISTRICT   ATTORNEY  667 

nate  one  of  the  appraisers  appointed  by  the  State  Comptroller 
to  appraise  the  property  of  decedents  whose  estates  may  be 
subject  to  the  payment  of  any  transfer  tax,  while  section  231 
provides  that '  from  such  report  of  appraisal  *  *  *  the  surro- 
gate shall  forthwith  determine  the  cash  value  of  all  estates  and 
the  amount  of  tax  to  which  the  same  are  liable;  or  the  surrogate 
may  so  determine  the  cash  value  of  all  such  estates  and  the 
amount  of  tax  to  which  they  are  liable  without  appointing  an 
appraiser.'  There  is  nothing  in  these  sections  which  limits  the 
time  within  which  the  surrogate  may  designate  an  appraiser  or 
assess  a  tax  upon  the  appraiser's  report,  or  assess  such  tax  upon 
his  own  motion  without  the  appointment  of  an  appraiser.  The 
appraiser's  report  in  the  estate  of  Phebe  Pearsall  having  been 
duly  filed  in  this  court,  the  surrogate  could,  by  virtue  of  the 
authority  conferred  upon  him  by  section  231,  of  his  own  motion 
assess  a  tax  upon  the  transfer  of  the  remainder  interests  to  the 
legatees  who  became  entitled  to  such  interests  upon  the  death 
of  the  life  tenant.  If  he  could  make  such  assessment  upon  his 
own  motion,  there  does  not  appear  to  be  any  valid  reason  why 
he  could  not  make  it  upon  the  motion  of  any  interested  party. 
For  the  purpose  of  appraising  estates  and  assessing  a  tax  under 
the  provisions  of  the  Transfer  Tax  Law,  the  State  Comptroller 
is  made  an  interested  party  (sec.  230  of  the  Tax  Law) ;  therefore 
the  surrogate  may,  upon  the  motion  of  the  State  Comptroller 
as  a  party  in  interest,  assess  a  tax  upon  the  transfer  of  the 
remainder  interest  to  the  respective  legatees  under  the  will  of  the 
decedent. 

"Section  235  of  the  Tax  Law  makes  it  the  duty  of  the  State 
Comptroller  to  notify  the  district  attorney  of  the  refusal  or 
neglect  of  parties  liable  to  taxation  to  make  such  payment, 
provided  that  eighteen  months  have  elapsed  since  the  accrual  of 
the  tax.  It  further  provides  that  the  district  attorney  shall 
apply  to  the  surrogate  for  a  citation  directed  to  such  parties  to 
show  cause  why  the  tax  should  not  be  paid.  To  construe  this 
section  to  mean  that  in  all  estates  where  the  tax  had  not  been 
paid  within  eighteen  months  after  the  death  of  the  decedent  an 
appraiser  could  not  be  appointed  by  the  surrogate  upon  the 
motion  of  an  interested  party,  or  the  tax  assessed  by  the  surro- 
gate upon  his  own  motion,  and  that  the  only  method  that  could 
be  pursued  to  ascertain  the  value  of  taxable  interests  or  deter-  • 
mine  the  tax  upon  said  interests  is  by  the  State  Comptroller 
notifying  the  district  attorney  and  the  latter  applying  to  the 


668  DISTRICT  ATTORNEY 

surrogate  for  a  citation,  would  necessarily  result  in  limiting  the 
jurisdiction  given  to  the  surrogate  by  sections  230  and  231  to 
a  period  of  eighteen  months  after  the  death  of  the  decedent  or 
the  accrual  of  the  tax.  But  there  is  nothing  in  the  language  of 
this  section  to  indicate  that  the  Legislature  intended  any  such 
restriction  or  limitation.  The  procedure  prescribed  by  sec- 
tion 235  is  essentially  one  to  compel  the  payment  of  the  tax;  but 
before  a  decree  of  the  Surrogate's  Court  can  be  entered  directing 
payment,  or  before  contempt  proceedings  can  be  instituted  to 
compel  payment,  it  must  be  made  to  appear  to  the  satisfaction  of 
the  surrogate  that  there  is  a  tax  due  and  that  certain  persons  are 
liable  for  its  payment.  This  can  only  be  shown  by  the  order  of 
the  surrogate  determining  the  taxable  value  of  the  interests  of 
the  legatees  or  beneficiaries  and  assessing  a  tax  thereon.  There- 
fore, as  the  entry  of  an  order  assessing  a  tax  is  a  condition 
precedent  to  the  granting  of  a  decree  directing  payment  of 
such  tax,  the  method  of  procedure  prescribed  by  section  235 
to  compel  payment  of  the  tax  cannot  limit  the  jurisdiction 
granted  to  the  surrogate  by  sections  230  and  231  to  appraise  the 
estates  of  decedents  for  the  purpose  of  taxation  and  to  assess  a 
tax  thereon  in  accordance  with  the  provisions  of  the  act. 

"As  the  petition  submitted  by  the  State  Comptroller  upon 
this  motion  shows  that  the  life  tenant  died  on  the  21st  day  of 
July,  1907,  and  that  it  then  became  known  in  whom  the  re- 
mainder after  her  life  estate  vested,  the  surrogate  may,  upon 
the  motion  of  the  State  Comptroller,  determine  the  value  of 
that  remainder  interest  and  assess  a  tax  upon  the  transfer  of  that 
interest  to  the  legatees  in  whom  it  vested  in  accordance  with 
the  provisions  of  decedent's  will." 

(4)  Costs 

Costs  awarded  under  §  235  belong  to  District  Attorney. 

District  Attorney  who  instituted  proceedings  and  who  has 
gone  out  of  office  before  termination  of  appraisal  should  have 
notice  of  final  order  so  that  claim  to  costs  may  be  adjusted  by 
surrogate.  Matter  of  Bolton,  35  Misc.  688. 

COSTS  AWARDED  AGAINST  COMPTROLLER.  In  Matter  of 
Julia  Brady,  N.  Y.  Law  Journal,  February  5,  1913,  Surrogate 
Fowler  held:  "This  is  an  application  by  the  district  attorney  to 
compel  payment  of  the  transfer  tax,  and  is  directed  to  the  re- 
spondent, John  J.  Herrick,  named  in  the  petition  with  seven 
other  persons  as  beneficiaries.  The  answer  by  said  respondent 


DIVORCED   WIFE  669 

.shows  that  he  was  the  executor  of  his  father,  John  Herj-ick, 
deceased,  and  that  as  such  executor  he  has  duly  accounted  and 
been  discharged.  He  further  shows  that  he  never  had  any  inter- 
est, beneficial  or  otherwise,  in  the  estate  of  the  decedent  herein, 
which  estate,  under  a  deed  of  trust,  his  father,  said  John  Her- 
rick,  had  administered  as  trustee  many  years  before  his  death. 
This  answer  is  almost  identical  with  the  respondent's  testimony 
given  by  him  on  March  2,  1909,  when  he  was  called  as  a  witness 
before  the  transfer  tax  appraiser  and  there  examined  by  the 
counsel  for  the  State  Comptroller,  who  represents  the  district 
attorney  in  the  present  proceeding. 

"It  seems  that  the  present  proceeding  should  not  have  begun, 
in  the  face  of  the  record  before  the  appraiser  showing  that  the 
respondent  had  a  perfect  defense  to  any  proceeding  that  might 
be  begun  to  compel  him  to  pay  the  transfer  tax  due  against 
the  estate  of  said  decedent,  Julia  Brady,  and  that  inasmuch  as 
the  said  counsel  for  the  district  attorney,  who  was  then  the 
attorney  for  the  State  Comptroller,  had  taken  part  in  the 
proceedings  before  the  appraiser,  he  must  have  been  aware  that 
the  disposition  of  this  proceeding,  to  wit,  dismissal,  was  the 
only  one  possible.  The  surrogate  has  power  in  his  discretion 
under  section  2561  of  the  Code  of  Civil  Procedure  to  fix  the 
amount  of  costs  where  there  has  been  a  contest." 

The  proceeding  was  dismissed  with  costs  against  the  state 
comptroller. 

(5)  When  tax  not  a  lien 

Vide  Matter  of  Strail,  195  N.  Y.  575,  supra,  page  368. 

(6)  Decree  not  modified  although  district  attorney  consented 

Proceedings  under  §  235  having  been  brought,  the  estate  was 
appraised,  and  valuation  placed  upon  business  by  executor  was 
accepted,  and  order  assessing  tax  was  duly  entered.  Later 
motion  was  made  to  modify  decree,  which  was  denied  although 
successor  to  district  attorney  consented.  Matter  of  Wallace, 
28  Misc.  603. 

DIVIDENDS 

Vide  Apportionment  of  Property  supra,  page  593. 

DIVORCED  WIFE 

Of  son  not  a  person  enumerated  in  paragraph  1,  §  221a. 
Matter  of  Merritt,  155  App.  Div.  228. 


670  DOMESTIC    CORPORATIONS 

DOMESTIC  CORPORATIONS 

Since  amendment  by  Laws  1911,  chap.  732,  in  effect  July  21, 
1911,  transfer  of  stock  of  domestic  corporation  is  not  subject  to 
tax  in  non-resident  estate.  For  decisions  prior  to  1911  amend- 
ment vide  cases  cited  sub  Non-resident. 

DOMESTIC  RELATIONS  LAW 

Widow  of  an  adopted  son  is  "a  widow  of  a  son"  within  intend- 
ment  of  subd.  1  of  §  221a.  Domestic  Relations  Law,  §  114; 

Matter  of  Duryea,  128  App.  Div.  205. 

t 

DOMICILE 

Vide  Residence.  For  discussion  of  law  of  domicile  vide  Mat- 
ter of  Majot,  199  N.  Y.  29-34. 

DOUBLE  TAXATION 

To  be  avoided  whenever  possible.  Matter  of  Palmer,  183 
N.  Y.  238;  Matter  of  Cooley,  186  N.  Y.  220;  Matter  of  Willmer, 
75  Misc.  62-65,  affirmed,  153  App.  Div.  804:  Matter  of  Thayer, 
58  Misc.  117-119,  affirmed,  193  N.  Y.  430. 

Discussion  of,  in  Matter  of  Penfold,  81  Misc.  598.  As  to 
non-resident  estates  vide  supra,  page  135. 

DOUBT 

Resolved  in  favor  of  taxpayer.  Matter  of  Enston,  113  N.  Y. 
174;  Matter  of  Vassar,  127  N.  Y.  1-12;  Matter  of  Stewart, 
131  N.  Y.  274;  Matter  of  Fayerweather,  143  N.  Y.  114-119; 
Matter  of  Harbeck,  161  N.  Y.  211;  Matter  of  Wolfe,  89  App. 
Div.  349-351,  affirmed,  without  opinion,  179  N.  Y.  599;  Matter 
of  Miller,  77  App.  Div.  473-479;  Matter  of  Cooley,  186  N.  Y. 
220;  Matter  of  Bishop,  82  App.  Div.  112-116;  Matter  of  Jour- 
dan,  151  App.  Div.  8-12,  dissenting  opinion  adopted  in  206 
N.  Y.  653;  Matter  of  Mergentime,  129  App.  Div.  367-374, 
affirmed,  on  opinion  below,  195  N.  Y.  572;  Matter  of  Allen,  76 
Misc.  88-91 ;  Matter  of  de  Peyster,  N.  Y.  Law  Journal,  Janu- 
ary 21,  1913,  affirmed,  without  opinion,  156  App.  Div.  938. 

Court  will  not,  however,  emasculate  statute  by  too  liberal 
construction.  Matter  of  Bostwick,  160  N.  Y.  489^94. 

Vide  cases  cited  Legislative  Declaration;  Retroactive. 

DOUBTFUL  CLAIMS 

Vide  Compromise  of  Claims;  etiam  Schedule  B3,  supra, 
page  131, 


DOWER  671 


DOWER 


(1)  Intention    of    testator    gov-          (2)  Cases  in  which  deduction  not 
erns.  allowed. 

(3)  Deduction  allowed. 

(1)  Intention  of  testator  governs 

The  widow  is  entitled  to  deduction  for  her  dower  interest 
unless  she  accepts  a  provision  in  lieu  of  dower.  The  question 
frequently  arises  as  to  whether  the  provisions  of  the  will  are 
meant  to  be  in  lieu  of  dower.  As  was  said  in  Roessle  v.  Roessle, 
81  Misc.  558-561,  "the  whole  question  is  one  of  the  testator's 
intention  to  be  gathered  from  the  language  he  has  used.  Matter 
of  Gordon,  172  N.  Y.  25,  28.  Where  such  intention  is  plain  the 
case  cannot  be  aided  by  the  attempted  application  of  rules  of 
construction  or  the  citation  of  decisions  made  in  construing 
other  wills  where  either  the  language  of  the  will  or  other  cir- 
cumstances of  the  case  differed  from  those  in  the  case  at  bar." 

(2)  Cases  in  which  deduction  not  allowed 

Where  widow  elects  to  take  legacy  in  lieu  of  dower  she  is  not 
entitled  to  deduction  on  theory  that  her  legacy  is  debt  of  the 
estate.  Matter  of  De  Graaf,  24  Misc.  147-149. 

"The  appellant  (widow  of  testator)  could  have  refused  to 
accept  the  legacy  given  to  her  in  lieu  of  dower  under  the  will, 
in  which  event,  whatever  the  value  of  the  dower  might  have 
been,  it  could  not  have  been  taxable  under  the  Transfer  Tax 
Act,  since  it  would  not  be  a  transfer  by  will;  but  the  moment  the 
appellant  accepted  the  provision  under  the  will  in  lieu  of  her 
dower,  a  tax  under  and  by  virtue  of  the  Transfer  Tax  Act 
immediately  attached  upon  that  performance."  Matter  of 
Riemann,  42  Misc.  648-650. 

Testator  devised  a  portion  of  his  real  property  to  his  widow, 
and  gave  a  life  interest  to  her  in  his  remaining  real  property. 
Held,  that  she  was  not  entitled  to  deduction  for  dower.  Matter 
of  Vivanti,  63  Misc.  618,  affirmed,  206  N.  Y.  656,  supra, 
page  387. 

IN  MATTER  OF  HENRY  I.  BARBEY,  114  N.  Y.  Supp.  725, 
Surrogate  Thomas  held,  that  as  the  provisions  made  by  the 
will  in  favor  of  the  widow  were  "expressly  stated  to  be  in  lieu  of 
dower,  and  the  widow  having  elected  to  accept  them,  the 
estate  is  not  to  be  diminished,  for  purposes  of  taxation,  by  the 
value  of  her  dower  right." 

IN  MATTER  OF  STUYVESANT,  72  Misc.  295,  Surrogate  Cohalan 


672  DOWER 

said:  "It  has  been  uniformly  held  by  the  courts  of  this  state 
that,  in  the  absence  of  express  words  declaring  that  the  testa- 
mentary provision  is  made  for  the  widow  in  lieu  of  dower,  the 
widow  is  entitled  to  both  unless  there  be  such  an  incompatibility 
between  the  claim  of  dower  in  addition  to  the  testamentary 
provision  and  the  other  arrangements  made  by  the  testator  for 
the  disposition  of  his  estate  as  will  indicate  a  manifest  intention 
on  the  part  of  the  testator  that  the  widow  was  not  to  receive 
both.  Lewis  v.  Smith,  9  N.  Y.  502;  Adsit  v.  Adsit,  2  Johns.  Ch. 
448;  Horstmann  v.  Flege,  172  N.  Y.  384.  But  if  the  disposition 
which  the  testator  has  made  of  his  estate  indicates  clearly  that 
he  intended  the  testamentary  provision  for  his  widow  in  lieu 
of  dower  she  is  put  to  her  election.  Savage  v.  Burnham,  17 
N.  Y.  561;  Vernon  v.  Vernon,  53  id.  351;  Asche  v.  Asche,  113 
id.  234;  Matter  of  Gorden,  172  id.  28." 

IN  MATTER  OF  EDWARD  KEYS,  N.  Y.  Law  Journal,  March  15, 
1912,  Surrogate  Fowler  held:  "The  decedent  having  devised 
all  his  property  to  a  trustee  with  directions  to  pay  a  certain 
part  of  the  income  to  the  widow,  she  is  not  entitled  to  dower  in 
addition  to  the  other  provisions  contained  in  the  will  for  her 
benefit,  and  the  appraiser  therefore  erred  in  deducting  the  value 
of  her  dower  from  the  taxable  assets  of  decedent's  estate  (Matter 
of  Stuyvesant,  72  Misc.  295)." 

(3)  Deduction  allowed 

In  Matter  of  Weiler,  122  N.  Y.  Supp.  608,  affirmed,  without 
opinion,  139  App.  Div.  905,  an  application  was  made  to  vacate 
order  which  had  assessed  tax  on  decedent's  real  estate  without 
deducting  therefrom  the  value  of  the  widow's  dower.  Surrogate 
Thomas  in  granting  the  application  said:  "The  widow's  estate 
of  dower  in  the  lands  of  the  decedent  was  property,  which  be- 
came vested  as  an  inchoate  estate  upon  her  marriage  and  con- 
summate upon  the  death  of  her  husband,  independent  of  the 
will,  and  not  by  virtue  thereof.  Adsit  v.  Adsit,  2  Johns.  Ch.  448, 
7  Am.  Dec.  539;  Lewis  v.  Smith,  9  N.  Y.  502,  61  Am.  Dec.  706; 
Sandford  v.  Jackson,  10  Paige,  266;  Konvalinka  v.  Schlegel, 
104  N.  Y.  125,  9  N.  E.  868,  58  Am.  Rep.  494;  Gray  v.  Gray, 
5  App.  Div.  132,  39  N.  Y.  Supp.  57;  Kimbel  v.  Kimbel,  14 
App.  Div.  570,  43  N.  Y.  Supp.  900.  It  was,  therefore,  not 
subject  to  transfer  tax,  and  in  assuming  it  to  be  so  both  parties 
were  in  error  when  the  order  fixing  tax  was  made." 

The  will  contained  no  direction  that  the  provision  therein 


DOWER  673 

in  favor  of  the  widow  should  be  in  lieu  of  dower.  It  provided 
that  all  the  personal  estate  should  go  to  the  widow  for  life,  and 
that  all  the  real  estate  should  be  held  by  trustees  for  the  benefit 
of  persons  other  than  the  widow.  The  comptroller  contended 
that  the  trust  in  the  lands  required  the  widow  to  elect  whether 
she  would  take  the  legacy  or  her  dower,  and  inasmuch  as  she 
had  not  made  an  election,  there  should  be  no  deduction  for 
dower.  Surrogate  Ketcham  discusses  and  sums  up  the  cases  re 
dower  by  saying  that  "only  a  manifest  purpose  in  the  will 
which  would  fail  if  dower  were  demanded  will  lead  to  a  construc- 
tion which  requires  an  election."  Held,  that  in  the  will  at  bar 
there  was  nothing  to  indicate  that  the  testator  did  not  intend 
that  his  widow  should  have  her  dower  in  the  real  estate,  and  that 
the  value  of  the  wife's  dower  "should  be  deducted  from  the 
gross  value  of  the  lands."  Matter  of  Shields,  68  Misc.  264. 

IN  MATTER  OF  CHURCH,  80  Misc.  447,  it  was  held  that  the 
appraiser  was  correct  in  deducting  the  value  of  dower.  Surro- 
gate Downs,  Orleans  County,  said:  "The  comptroller  has 
appealed  from  such  order  upon  the  ground  that  the  assessment 
of  said  tax  was  erroneous,  in  that  the  appraiser  in  determining 
and  fixing  the  amount  thereof  has  deducted  therefrom  the  value 
of  the  widow's  dower  in  all  of  the  real  property  of  which  her 
husband  was  seized  at  the  time  of  his  death. 

"No  question  is  raised  upon  this  appeal  as  to  the  rule  well 
recognized  that  dower  does  not  pass  by  the  will,  and  is  therefore 
not  subject  to  transfer  tax.  This  principle  is  clearly  enunciated 
in  Adsit  v.  Adsit,  2  Johns.  Ch.  448,  7  Am.  Dec.  539;  Lewis  v. 
Smith,  9  N.  Y.  502,  61  Am.  Dec.  706;  Tobias  v.  Ketchum,  32 
N.  Y.  319;  Vernon  v.  Vernon,  53  N.  Y.  351.  The  appellant 
contends,  however,  that  in  this  particular  case  the  terms  of  the 
will  are  inconsistent  with  a  claim  of  dower,  and  that  the  widow 
must  either  take  under  the  will  or  elect  to  take  dower. 

"The  courts  of  this  state  in  a  long  line  of  decisions  hold  that 
the  right  of  a  widow  to  dower  in  her  husband's  lands  is  absolute, 
and  that  no  provision  in  a  will  for  the  benefit  of  the  widow  will 
be  deemed  to  be  taken  in  lieu  of  dower,  unless  there  be  an  express 
declaration  to  that  effect,  or  unless  upon  the  face  of  the  will 
there  be  a  clear  manifestation  of  the  intent  of  the  testator  that 
the  widow  shall  not  take  both.  Kimbel  v.  Kimbel,  14  App. 
Div.  570;  Purdy  v.  Purdy,  18  App.  Div.  310;  Konvalinka  v. 
Schlegel,  104  N.  Y.  125.  The  will  of  Perry  Church,  so  far  as 
material  in  this  proceeding,  is  as  follows:  'Second,  I  give,  devise 
43 


674  DOWER 

and  bequeath  to  Margaret  Armour,  of  the  town  of  Ridgeway, 
Orleans  county,  N.  Y.,  the  Ridgeway  farm  consisting  of  about 
forty-four  acres  in  the  town  of  Ridgeway,  Orleans  county,  N.  Y., 
and  now  occupied  by  said  Margaret  Armour,  and  also  a  farm 
north  of  Ridgeway  Corners  in  the  town  of  Ridgeway,  Orleans 
county,  N.  Y.,  consisting  of  about  sixty-two  acres  and  known  as 
the  Hunt  place;  the  said  two  places  being  hereby  devised  to  said 
Margaret  Armour  in  fee  simple  absolute. 

'  Third,  I  give,  devise  and  bequeath  to  my  wife  Rosetta 
Church,  all  the  rest,  residue  and  remainder  of  my  property, 
both  real  and  personal,  of  whatever  kind,  name  or  nature,  and 
wherever  situate,  and  not  hereinabove  devised,  in  fee  simple 
absolute  forever.' 

"There  being  no  express  declaration  that  the  provision  for 
the  widow  shall  be  in  lieu  of  dower,  the  only  question  which 
presents  itself  is  whether  or  not  the  above  provisions  are  in- 
consistent with  a  claim  of  dower,  and  whether  or  not  the 
general  scheme  of  the  will  is  defeated  if  the  widow  be  allowed  to 
take  her  provision  both  under  the  will  and  dower.  In  Kon- 
valinka  v.  Schlegel,  supra,  the  court  says: 

"  The  intention  of  the  testator  to  put  the  widow  to  an  election 
cannot  be  inferred  from  the  extent  of  the  provision,  or  because 
she  is  a  devisee  under  the  will  for  life  or  in  fee.  *  *  *  The 
only  sufficient  and  adequate  demonstration  which,  in  the  ab- 
sence of  express  words,  will  put  the  widow  to  her  election,  is 
a  clear  incompatibility,  arising  on  the  face  of  the  will,  between 
a  claim  of  dower  and  a  claim  to  the  benefit  given  by  the  will. 

"Appellant  claims  that  the  intent  of  the  testator  that  his 
widow  shall  not  claim  both  the  provision  and  dower  is  shown  by 
the  use  of  the  words  'fee  simple  absolute.'  I  am  unable  to  see 
the  force  of  any  such  contention.  I  believe  the  testator,  in  using 
the  above  words,  intended  tp  convey  all  of  the  estate  which  he 
had  in  the  property  so  devised,  and  that  the  words  are  used 
merely  as  descriptive  of  the  tenure  of  the  estate.  Section  31  of 
the  Real  Property  Law  defines  a  fee  simple  absolute  as  an  estate 
of  inheritance  not  defeasible  or  conditional.  As  used  in  this 
will,  the  effect  is  to  convey  the  whole  of  the  estate  which  the 
testator  had  in  the  lands  conveyed. 

"  It  cannot  be  claimed  that  the  same  words  could  not  have 
been  used  had  there  been  a  mortgage  upon  the  two  parcels  of 
land  devised  in  the  second  paragraph  or  any  other  incumbrance. 
The  dower  right  is  a  lien  and  the  wife  is  entitled  to  its  benefits. 


DOWER  675 

The  dower  right  was  not  the  testator's  to  give  any  more  than 
any  other  incumbrance.  Gloss  v.  Eldert,  30  App.  Div.  338. 

"  Inasmuch  as  the  terms  of  this  will  are  consistent  with  a  claim 
of  dower  by  the  widow,  the  appraiser  did  not  err  in  deducting 
the  value  of  such  dower  in  fixing  the  tax  to  be  assessed." 

IN  MATTER  OF  GUSTAV  AMSINCK,  N  Y.  Law  Journal,  April  19, 
1913,  the  Comptroller  appealed  from  the  order  fixing  tax,  which 
allowed  deductions  from  the  decedent's  real  estate  of  the 
dower  interest  of  his  widow.  Surrogate  Fowler  held:  "The 
decedent  at  the  time  of  his  death  had  an  estate  which  is  ap- 
praised by  the  transfer  tax  appraiser  in  his  report  as  being 
valued  at  $2,774,811.79,  the  real  estate  in  the  State  of  New 
York  fherein  mentioned  being  valued  at  $645,000.  Under  the 
terms  of  decedent's  will  he  devised  to  his  widow  all  of  his  real 
estate  in  the  State  of  New  York,  and  other  interests  in  said 
estate  which  are  valued  at  $1,591,597,  making  in  all  the  amount 
of  which  his  widow  was  the  beneficiary  the  sum  of  $2,236,597, 
which  was  upwards  of  80  per  cent,  of  his  entire  estate  situated 
in  this  State.  He  devised  a  piece  of  real  estate  in  Hamburg, 
Germany,  to  his  sister,  and  to  one  whom  he  describes  in  his 
will  as  his  faithful  servant,  Emma  Keidy,  he  gave  the  sum  of 
$10,000  and  a  lot  of  land  situated  in  Summit,  Union  County, 
N.  J.,  containing  about  two  and  one-half  acres  of  land,  with  the 
greenhouses  thereon  and  the  contents  therein.  He  also  gave  to 
Maria  Anna  Van  Duhn  and  her  husband  during  their  joint 
lives  and  the  life  of  their  survivor  the  use  of  the  cottage  and  the 
grounds  adjoining  such  cottage  which  they  occupied  on  the 
decedent's  property  at  Summit,  N.  J. 

"  The  widow  of  the  decedent  did  not  exercise  any  power  of 
election  in  accordance  with  section  201  of  the  Real  Property 
Law,  and  now  contends  that  she  is  entitled,  together  with  the 
fee  of  the  real  estate  in  the  State  of  New  York  specifically 
devised  to  her,  to  a  dower  interest  therein,  inasmuch  as  there  was 
no  provision  in  the  will  of  the  decedent  to  the  effect  that  the 
provision  for  her  was  made  in  lieu  of  dower.  It  seems  to  me 
that  she  is  right  in  her  contention. 

"  Dower  is  favored  by  the  law  and  it  is  never  excluded  by  a 
provision  for  the  wife  except  by  express  words  or  by  necessary 
implication.  Where  there  are  no  express  words  there  must  be 
upon  the  face  of  the  will  a  demonstration  of  the  testator  that 
the  widow  shall  not  take  both  dower  and  the  provision,  and 
the  only  sufficient  and  adequate  demonstration  which,  in  the 


C7G  EDUCATIONAL   CORPORATION 

absence  of  express  words,  will  put  the  widow  to  her  election  is  a 
clear  incompatibility  arising  on  the  face  of  the  will  between  a 
claim  of  dower  and  a  claim  to  the  benefit  given  by  the  will 
(Konvalinka  v.  Schlegel,  104  N.  Y.  129;  Tobias  v.  Ketchum, 
32  N.  Y.  325,  326;  Horstmann  v.  Flege,  172  N.  Y.  384).  The 
respective  devises  made  to  the  widow  and  the  other  persons 
mentioned,  considered  alone  or  in  connection  with  the  largeness 
of  the  gifts  made  for  her  benefit,  are  no  evidence  of  such  in- 
compatibility and  are  insufficient  to  put  her  to  an  election  or  to 
deprive  her  of  dower  in  the  lands  devised  to  her  (Carey  v.  Mc- 
Gowan,  50  Misc.  426;  Closs  v.  Eldert,  30  App.  Div.  338,  339, 
340;  Matter  of  Accounting  of  Frazer,  92  N.  Y.  239;  Kon- 
valinka v.  Schlegel,  104  N.  Y.  129).  The  order  entered  on  the 
report  of  the  appraiser  is  sustained." 

EDUCATIONAL  CORPORATION 

Exempt  under  first  sentence  of  §  221.  Since  amendment  by 
Laws  1911,  chap.  732,  supra,  page  41,  an  educational  corpora- 
tion, wherever  incorporated,  is  exempt.  A  transfer  to  a  foreign 
corporation  made  prior  to  1911  amendment  was  held  not  entitled 
to  exemption.  Matter  of  Balleis,  144  N.  Y.  132;  Matter  of 
Wolfe,  23  Misc.  439. 

For  discussion  of  exemptions  vide  Matter  of  Francis,  121 
App.  Div.  129,  affirmed,  on  opinion  below,  189  N.  Y.  554; 
Matter  of  Mergentime,  129  App.  Div.  367,  affirmed,  on  opinion 
below,  195  N.  Y.  572;  Matter  of  Moses,  138  App.  Div.  525; 
Matter  of  Arnot,  145  App.  Div.  708,  affirmed,  without  opinion, 
203  N.  Y.  627;  Matter  of  Field,  71  Misc.  396,  affirmed,  without 
opinion,  147  App.  Div.  927;  Matter  of  Allen,  76  Misc.  88; 
Matter  of  McCormick,  206  N.  Y.  100. 

Testator  bequeathed  the  residue  of  his  estate  to  the  city  of 
Yonkers,  in  trust,  to  found  and  maintain  a  trades  school  under 
the  direction  of  the  board  of  education  and  as  a  part  of  the  public 
school  system  for  the  teaching  of  mechanical  trades  and  practical 
and  scientific  knowledge  connected  therewith,  to  such  persons 
as  wish  to  learn  a  trade  by  which  to  earn  their  living  particularly . 
Held,  that  the  transfer  was  not  taxable.  Matter  of  Saunders, 
77  Misc.  54-57,  affirmed,  without  opinion,  156  App.  Div.  891. 

NEW  YORK  HISTORICAL  SOCIETY  was  held  to  be  an  educa- 
tional corporation  and  entitled  to  the  exemptions  under  the  first 
sentence  of  §  221,  Surrogate  Cohalan  in  his  opinion,  Matter  of 
de  Peyster,  N.  Y.  Law  Journal,  January  21,  1913,  affirmed, 


EDUCATIONAL    CORPORATION  677 

without  opinion,  156  App.  Div.  938,  saying:  "The  Court  of 
Appeals  has  said  that  a  transfer  tax  is  not  a  general  burden 
imposed  upon  the  citizens  of  the  State,  and  that  in  a  proceeding 
to  assess  such  a  tax  the  provisions  of  the  statute  should  be  con- 
strued in  favor  of  the  citizen  (Matter  of  Enston,  113  N.  Y. 
174;  Matter  of  Fayerweather,  143  N.  Y.  114).  A  corporation 
which  gives  free  education  to  the  people  of  the  State  is  a  benef- 
icent agent  of  government.  It  performs  a  meritorious  govern- 
mental service;  it  aids  the  government  in  what  is  perhaps  the 
most  important  of  governmental  functions — the  making  of  good 
citizens.  That  the  New  York  Historical  Society  is  such  a 
corporation  is  obvious  from  the  above  recital  of  its  possibilities 
for  public  usefulness.  By  means  of  its  free  lectures  it  diffuses 
knowledge  upon  various  subjects;  by  means  of  its  manuscripts, 
prints  and  pictures  it  gives  the  student  an  opportunity  of  ac- 
curately grasping  the  details  of  historic  occurrences  and  events. 
Its  wealth  of  historical  data  is  available  to  the  historian,  the 
sociologist  and  the  statesman.  Its  records  showing  the  sacri- 
fices that  have  been  made  for  country  and  for  principle  inspire 
patriotism  in  the  young  and  altruism  in  the  aged." 

YOUNG  MEN'S  SYMPHONY  ORCHESTRA  and  People's  Sym- 
phony Concerts  were  declared  to  be  educational  corporations, 
within  the  meaning  of  the  first  sentence  of  §  221,  in  Matter  of 
Alfred  L.  Seligman,  N.  Y.  Law  Journal,  July  19,  1913.  Surro- 
gate Fowler  in  dismissing  the  appeal  of  the  state  comptroller 
said:  "An  examination  of  the  proofs  upon  which  the  findings 
of  the  exemption  of  these  two  corporations  were  based  shows 
that  the  object  of  incorporation  of  the  People's  Symphony 
Orchestra  was  'to  provide  musical  entertainment  and  instruc- 
tion to  the  public  and  to  encourage  and  develop  the  taste  and 
study  for  music.'  The  affidavit  by  the  president  of  the  society 
shows  that  it  lives  up  to  the  purposes  of  its  incorporation;  that 
at  all  concerts  by  it  each  number  on  the  programme  is  pre- 
ceded by  a  lecture  delivered  by  the  musical  director,  and  that 
it  generally  consists  of  a  sketch  of  the  life  of  the  composer  whose 
work  is  to  follow,  a  statement  of  the  idea  he  wishes  to  convey, 
and  an  analysis  of  the  method  used  in  the  elaboration  of  the 
musical  theme.  It  is  also  shown  that  the  lecturers  under  the 
Board  of  Education  of  the  City  of  New  York  have  recognized 
the  educational  value  of  these  concerts,  and  have  made  requests 
for  information  regarding  them,  so  that  announcements  might 
be  given  to  pupils  and  audiences  attending  their  lectures.  It  is 


678  EDUCATIONAL    CORPORATION 

further  shown  that  the  society  depended  upon  gifts  for  two- 
thirds  of  its  income,  and  by  its  treasurer's  report  for  a  number 
of  years  up  to  the  season  of  1911-1912  it  is  shown  that  a  deficit 
averaging  about  $2,500  a  year  was  made  up  by  contributions. 

"  The  proofs  annexed  to  the  report  and  referring  to  the  Young 
Men's  Symphony  Orchestra  of  New  York  show  that  this  cor- 
poration was  formed  to  promote  musical  efficiency  among  its 
members  and  to  train  them  in  orchestral  and  ensemble  playing, 
and  to  lay  the  foundation  so  that  they  might  attain  a  high  pro- 
fessional plane  as  musicians.  The  affidavit  of  its  vice-president 
and  secretary  shows  that  it  is  entirely  supported  by  gifts  and 
voluntary  contributions,  and  that  all  its  officers,  members  and 
employees  render  their  services  gratuitously,  nor  do  any  of  them 
receive  any  pecuniary  profit,  except  the  musical  director,  who 
receives  a  reasonable  compensation  for  his  services.  Under  the 
decision  in  the  Matter  of  De  Peyster  (N.  Y.  Law  Journal, 
January  21,  1913),  wherein  an  appeal  had  been  taken  by  the 
New  York  Historical  Society  from  an  order  assessing  a  transfer 
tax  upon  a  bequest  by  the  decedent  to  it,  it  was  found  '  that  it 
affords  the  public  at  large  an  opportunity  of  viewing  fine  paint- 
ings, perusing  rare  books,  examining  historical  treasures, 
inspecting  manuscripts  connected  with  the  history  of  this 
State,  *  *  *  and  that  in  addition  to  these  it  performs  the 
affirmative  or  active  work  of  diffusing  knowledge  or  information 
through  the  system  of  lectures  inaugurated  by  it  and  held  at 
frequent  intervals  during  the  year.  It  cannot  be  said  to  be 
exclusively  historical  when  we  take  into  consideration  the  op- 
portunities afforded  to  the  public  for  instruction,  for  the  acqui- 
sition of  knowledge  and  cultivation  of  the  intellectual.'  *  *  * 

"Young  Men's  Symphony  Orchestra  of  New  York  and  the 
People's  Symphony  Concerts  are  engaged  in  work  which  is 
purely  educational  and  closely  analogous  to  that  which  it  ap- 
pears from  the  quotation  from  the  decision  cited  is  carried  on 
by  the  New  York  Historical  Society,  and  like  that  society  the 
work  of  the  corporations  under  examination  might  be  said 
to  be  embraced  within  the  meaning  of  the  word  'educational,' 
as  used  in  the  Tax  Law  to  designate  corporations  entitled  to 
exemption  from  taxation.  There  was  no  evidence  before  the 
appraiser  that  would  justify  a  finding  other  than  that  made  by 
him  as  to  the  taxable  value  of  the  specific  legacies  to  the  Young 
Men's  Symphony  Orchestra." 


ELECTION  679 


ELECTION 


(1)  Renunciation  of  legacy.  (4)  Renunciation     of     commis- 

(2)  Assignment  of  legacy.  sions. 

(3)  Election     by     appointee  of  (5)  Non-resident  estates. 

power  of  appointment. 

(1)  Renunciation  of  legacy 

May  elect  not  to  take  under  will  and  thus  avoid  tax.  Matter 
of  Wolfe,  89  App.  Div.  349,  affirmed,  without  opinion,  179 
N.  Y.  599;  Matter  of  Mather,  90  App.  Div.  382-385,  affirmed, 
without  opinion,  179  N.  Y.  526. 

QUERY  as  to  whether  can  renounce  transfer  operating  under 
the  laws  of  inheritance  or  descent.  Matter  of  Wolfe,  89  App. 
Div.  349-354,  supra,  page  299. 

Legatee  may  renounce  a  part  of  a  legacy.  Matter  of  Merritt, 
155  App.  Div.  228. 

(2)  Assignment  of  legacy 

Where  there  has  been  an  assignment  of  a  legacy  the  tax  is  the 
same  as  though  the  assignment  had  not  been  made.  Matter  of 
Cook,  187  N.  Y.  253. 

(3)  Election  by  appointee  of  power  of  appointment 

For  cases  where  appointee  of  power  has  taken  under  the 
original  will  and  not  by  virtue  of  the  exercise  of  the  power  of 
appointment  vide  Matter  of  Lansing,  182  N.  Y.  238;  Matter  of 
Ripley,  122  App.  Div.  419,  affirmed,  per  curiam,  192  N.  Y. 
536;  People  ex  rel.  Ripley,  69  Misc.  402;  Matter  of  Haggerty, 
128  App.  Div.  479,  affirmed,  without  opinion,  194  N.  Y.  550; 
Matter  of  Lewis,  60  Misc.  643,  reversed  on  authority  of  Matter 
of  Lansing  and  Matter  of  Haggerty,  supra,  129  App.  Div.  905, 
the  Appellate  Division  being  affirmed,  without  opinion,  194 
N.  Y.  550;  Matter  of  Haight,  152  App.  Div.  228.  Vide  etiam 
Matter  of  Backhouse,  185  N.  Y.  544,  supra,  page  328. 

It  has  been  held  that  the  position  taken  by  the  appointee  in 
the  transfer  tax  proceeding  is  sufficient  election.  Matter  of 
Chapman,  133  App.  Div.  337-340,  appeal  dismissed,  196  N.  Y. 
561,  same  case  in  138  App.  Div.  923,  the  order  of  surrogate  be- 
ing affirmed  on  authority  of  133  App.  Div.  337,  supra,  affirmed, 
without  opinion,  199  N.  Y.  562.  It  is  the  practice,  however,  for 
the  appointee  to  file  with  the  appraiser  a  formal  statement,  duly 
acknowledged,  setting  forth  his  election.  This  is  the  better 
practice  for  it  makes  the  record  complete.  Vide  MATTER  OP 


680  ELECTION 

MITCHILL,    N.   Y.    Law    Journal,    November  22,    1913,   post, 
page  777. 

Where  the  exercise  of  the  power  works  a  modification  to  the 
extent  of  creating  different  estates  and  interests,  Surrogate 
Heaton  of  Rensselaer  County,  in  Matter  of  Warren,  62  Misc. 
444-448,  held  that  the  beneficiaries  under  the  power  being 
compelled  "to  take,  if  at  all,  under  the  power,  they  cannot  elect 
to  take  upon  the  original  will  for  the  purposes  of  this  applica- 
tion." 

(4)  Renunciation  of  commissions 

In  Matter  of  Stephen  Van  Rensselaer,  a  non-resident,  N.  Y. 
Law  Journal,  October  11,  1912,  Surrogate  Fowler  said:  "No 
proof  of  the  law  of  New  Jersey  in  regard  to  the  particular  time 
at  which  executors  become  entitled  to  commissions  was  adduced 
before  the  appraiser.  In  the  absence  of  such  proof  it  will  be 
presumed  that  the  law  of  New  Jersey  on  this  question  is  the 
same  as  our  law  (Hynes  v.  McDermot,  82  N.  Y.  41;  Savage  v. 
O'Neill,  44  N.  Y.  298).  Our  courts  hold  that  an  executor  is  not 
entitled  to  commissions  until  such  commissions  have  been 
ascertained  by  the  court  and  a  decree  entered  authorizing  their 
payment  (Wheelright  v.  Rhodes,  28  Hun,  57;  Freedman  v. 
Freedman,  4  Redf.  211).  If,  therefore,  the  executor  of  the 
decedent's  estate  renounced  his  right  to  commissions  before 
a  decree  of  the  Orphans'  Court  of  New  Jersey  was  made  deter- 
mining the  amount  of  such  commissions  and  directing  their 
payment,  he  renounced  something  to  which  he  was  not  actually 
entitled  and  to  which  he  never  became  entitled.  The  estate 
was  not  diminished  by  the  amount  of  such  commissions,  be- 
cause they  were  never  deducted  from  the  estate  and  had  never 
become  the  lawful  property  of  any  individual.  The  property 
passed  without  any  deduction  for  commissions  to  the  legatee 
mentioned  in  decedent's  will  and  upon  the  privilege  of  succeed- 
ing to  the  entire  amount  of  the  property  so  transferred  a  tax 
may  be  imposed. 

"If,  however,  the  renunciation  was  made  after  the  entry  of 
the  decree  in  the  Orphans'  Court  ascertaining  such  commis- 
sions and  directing  their  payment,  then,  as  such  commissions 
would  be  the  property  of  the  executor,  his  renunciation  of  them 
would  constitute  a  gift  of  the  amount  of  such  commissions  from 
him  to  the  legatee  and  they  would  not  form  a  part  of  the  taxable 
assets  of  the  estate. 


LAWS    CONCERNING    CHILDREN    OR   ANIMALS  681 

"As  the  report  of  the  appraiser  does  not  contain  a  copy 
of  the  decree  of  the  Orphans'  Court  nor  a  copy  of  the  renuncia- 
tion of  the  executor,  it  is  impossible  to  determine  at  this  time 
whether  the  commissions  alleged  to  have  been  renounced  by  the 
executor  constituted  a  part  of  the  estate  that  passed  to  the 
legatee  under  the  will  of  the  decedent  or  whether  they  passed 
to  the  legatee  as  a  gift  from  the  executor.  Such  a  determination 
will  be  made  in  the  manner  herein  indicated  when  copies  of  the 
documents  above  mentioned  have  been  filed  with  the  papers 
upon  this  appeal." 

As  to  allowance  of  commissions  in  resident  estate  vide 
page  126;  in  non-resident  estate,  page  149. 

(6)  Non-resident  estate 

Chap.  310,  Laws  1908,  in  effect  May  18,  1908,  added  to 
§  220  the  present  subdivision  3,  which  reads:  "Whenever 
the  property  of  a  resident  decedent,  or  the  property  of  a  non- 
resident decedent  within  this  state,  transferred  by  will  is  not 
specifically  bequeathed  or  devised,  such  property  shall,  for  the 
purposes  of  this  article,  be  deemed  to  be  transferred  propor- 
tionately to  and  divided  pro  rata  among  all  the  general  legatees 
and  devisees  named  in  said  decedent's  will,  including  all  trans- 
fers under  a  residuary  clause  of  such  will." 

Prior  to  1908  amendment  the  executor  could  so  marshal  the 
assets  as  to  avoid  or  minimize  the  tax.  Matter  of  James,  144 
N.  Y.  6;  Matter  of  Whiting,  200  N.  Y.  520;  Matter  of  McEwan, 
51  Misc.  455.  Not  possible  in  intestacy.  Matter  of  Ramsdill, 
190  N.  Y.  492. 

For  discussion  of  amendment  vide  supra,  page  152. 

Constitutionality  of  1908  amendment  upheld.  Matter  of 
Porter,  67  Misc.  19,  affirmed,  without  opinion,  148  App.  Div. 
896. 

ENFORCEMENT  LAWS  CONCERNING  CHILDREN  OR 
ANIMALS 

Corporations  organized  for  the  enforcement  of  laws  relating 
to  children  or  animals,  wherever  incorporated,  are  exempt 
under  the  provisions  of  the  first  sentence  of  §  221. 

Prior  to  amendment  of  §  221  by  chap.  206,  Laws  1912,  in 
effect  April  8,  1912,  a  bequest  of  money  to  the  society  held 
taxable.  Surrogate  Cohalan  in  his  opinion  in  Matter  of  Daly, 
79  Misc.  586,  an  estate  in  which  decedent  died  prior  to  the  1912 


682  EQUITABLE    CONVERSION 

amendment,  said:  "While  fully  appreciating  the  valuable  serv- 
ices which  the  society  renders  and  the  admirable  work  which 
it  performs,  I  am  constrained  to  hold  that  it  is  not  an  educa- 
tional, charitable  or  benevolent  corporation  within  the  meaning 
of  those  terms  in  section  221  of  the  transfer  tax  statute.  The 
remedy  for  the  statutory  discrimination  against  corporations 
similar  to  the  Society  for  the  Prevention  of  Cruelty  to  Animals 
lies  with  the  Legislature  and  not  with  courts.  In  Matter  of 
Moses,  138  App.  Div.  525,  the  court  held  that  the  Brooklyn 
Society  for  the  Prevention  of  Cruelty  to  Children  was  not 
entitled  to  exemption  from  taxation  on  a  bequest  of  money  or 
securities.  This  decision  I  consider  controlling  upon  the  matter 
under  consideration."  To  same  effect  Matter  of  Saunders,  77 
Misc.  54-63,  affirmed,  without  opinion,  156  App.  Div.  891. 

EQUITABLE  CONVERSION 

ACTUAL  FORM  in  which  property  existed  at  time  of  death 
determines  liability  to  tax,  and  the  doctrine  of  equitable  con- 
version is  not  applicable.  Matter  of  Swift,  137  N.  Y.  77-86; 
Matter  of  Sutton,  149  N.  Y.  618;  Matter  of  Dows,  167  N.  Y. 
227-232,  sustained  in  183  U.  S.  278,  sub  nom.  Orr  v.  Gilman. 

In  Matter  of  Baker,  67  Misc.  360,  decedent  was  under  con- 
tract to  sell  real  estate  in  another  state,  and  left  a  conveyance 
thereof  which  was  delivered  the  day  after  her  death.  Held,  that 
the  rule  was  that  "however  the  equitable  conversion  may  have 
been  effected,  by  will  or  contract,  the  property  is  to  be  taxed  or 
exempted  according  to  its  nature  and  tenure  at  the  decedent's 
death,"  and  therefore  the  transfer  in  question  was  not  taxable  as 
the  land  was  without  the  state  of  New  York. 

Where  testator  directs  that  his  real  estate  be  sold  and  that  a 
portion  of  the  proceeds  be  given  to  his  daughter,  and  the  daugh- 
ter dies  before  the  real  estate  is  sold,  the  interest  passing  under 
daughter's  will  is  taxable  as  personal  property.  Matter  of 
Mills,  177  N.  Y.  562. 

EQUITY 

EQUITY  and  exact  justice  not  the  concern  of  the  courts  in 
applying  the  statute,  as  the  proceeding  is  statutory  and  not  one 
in  equity.  Matter  of  Tracy,  179  N.  Y.  501-509;  Matter  of 
White,  208  N.  Y.  64-68. 

"Laws  relating  to  taxation  cannot  of  necessity  enter  into  the 
minute  equities  of  each  individual  case."  Matter  of  Borup,  28 
Misc.  474. 


EVASION    OF  TAX  683 

"As  the  imposition  of  a  transfer  tax  is  a  statutory  and  not  an 
equitable  proceeding  this  court  cannot  depart  from  the  proce- 
dure prescribed  by  the  transfer  tax  statute  in  order  that  equity 
may  be  done  between  the  state  of  New  York  and  the  benefi- 
ciaries of  decedent's  bounty."  Matter  of  Stuart,  N.  Y.  Law 
Journal,  May  10,  1913. 

Foreign  inheritance  tax  not  allowed  as  a  deduction,  although, 
as  was  said  by  Surrogate  Fowler  in  Matter  of  Penfold,  142 
N.  Y.  Supp.  678-769:  "I  confess  that  it  seems  to  me  hard  in 
principle  that  an  abstraction,  and  not  property,  should  be  made 
the  subject  of  taxation.  To  exact  a  tax  in  the  last  resort  on 
property  which  has  already  been  appropriated  by  a  co-ordinate 
taxing  power  seems  to  me  indefensible  in  principle;  but  if  such 
is  the  law,  and  I  think  it  is,  it  must  be  followed  by  me,  regardless 
of  my  own  theories  or  convictions." 

ERRONEOUS  PAYMENT  OF  TAX 

People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402;  Matter  of 
Scott,  208  N.  Y.  602,  supra,  page  396;  and  cases  cited  sub  Pay- 
ment of  Tax;  Refund;  Vacating  Decree. 

EVASION  OF  TAX 

Vide  Reappraisal. 

"Efforts  to  evade  the  law  are  secret  and  not  public.  Wit- 
nesses are  not  called  in  to  attest  them.  The  evidence  to  prove 
the  same  must  of  necessity  be  circumstantial  rather  than  direct 
and  such  circumstantial  evidence  may  overbear  the  positive 
testimony  of  an  interested  party  who  swears  to  the  contrary. 
The  effect  of  this  transfer  is  to  pass  the  property  to  the  next  of 
kin  of  the  deceased  exactly  as  it  would  have  passed  by  will  had 
this  transfer  not  been  before  made.  There  is  no  moral  reason 
why  this  property  should  not  be  taxed  as  though  the  property 
had  passed  three  months  later  by  the  will  of  the  deceased. 
Courts  should  not  be  over  zealous  to  protect  an  estate  from 
taxation  and  to  shield  parties  by  a  presumption  of  innocence 
where  no  other  rational  motive  for  a  transfer  is  shown,  and 
no  reason  appears  why  the  estate  itself  should  not  bear  its 
just  proportion  of  the  public  burden."  Matter  of  Palmer, 
117  App.  Div.  360-368;  Matter  of  Jones,  65  Misc.  121-123. 

"  If  a  transfer  of  property  is  made  for  the  purpose  of  cheating 
the  law  and  avoiding  payment  of  the  transfer  tax,  it  may  well  be 
that  a  gift  so  made  although  absolute  and  unconditional,  is 


684  EVIDENCE 

made  in  contemplation  of  death,  and  that  a  tax  should  be  paid 
thereon  although  the  grantor,  vendor  or  donor  may  live  for 
many  years  thereafter."  Matter  of  Cornell,  66  App.  Div.  162- 
169,  modified,  but  not  as  to  this  dicta,  in  170  N.  Y.  423.  Vide 
cases  cited  sub  Contemplation  of  Death. 

Attempt  to  evade  tax  by  refusal  to  answer  material  questions 
punishable  in  contempt  proceedings  before  surrogate.  Matter 
of  David  Kennedy,  113  App.  Div.  4-8. 

Act  done  to  evade  tax  would  make  case  not  within  previous 
decisions.  Matter  of  Cooley,  186  N.  Y.  220-229. 

In  Matter  of  Sarah  Heiser,  N.  Y.  Law  Journal,  July  19,  1913, 
opinion  quoted  page  804,  Surrogate  Fowler  held  that  it  was 
immaterial  for  what  purpose  a  joint  tenancy  was  created  in  the 
absence  of  an  allegation  of  fraud. 

Even  though  payment  of  tax  may  be  evaded  it  should  be 
assessed.  Matter  of  Dingman,  66  App.  Div.  228. 

EVIDENCE 

Vide  Burden  of  Proof;  Laws  of  Another  State;  Testimony. 

EXAMINER  OF  VALUES 

Examiner  of  values  in  New  York  County.  Section  229.  Vide 
page  113. 

EXCEPTIONS  AND  LIMITATIONS 

§  221,  supra,  page  5  and  page  40. 
Vide  Exemptions,  post,  page  685. 

EXCLUSIVE  JURISDICTION 

Vide  Code  of  Civil  Procedure,  §§  2476-2477  and  §  228  of  Tax 
Law.  As  to  resident  estates  vide  supra,  page  56.  For  non- 
resident estates  vide  Matter  of  Hathaway,  27  Misc.  474,  and 
discussion,  supra,  page  137. 

EXCUSE  FOR  NON-PAYMENT 
Vide  Interest. 

EXECUTOR 

Commissions  of,  discussed  sub  Schedule  B2,  supra,  page  126. 
As  to  production  of  receipt  upon  final  accounting,  vide  Mat- 
ter of  Meyer,  209  N.  Y.  386,  supra,  page  397. 

Vide  Appeal;  Contempt;  Lien  of  Tax;  Payment  of  Tax. 


EXEMPTIONS  685 

EXEMPLIFIED  COPIES 

Vide  Laws  of  Another  State  or  County. 

EXEMPTIONS 

(1)  Exemptions  under  §  221.  (5)  Foreign  corporations  prior  to 

(2)  Status  of  corporation  claim-  1911  amendment. 

ing  exemption.  (6)  Legislature  may  release  from 

(3)  Form   for  affidavit   claiming  tax. 

exemption.  (7)  Amount    of    exemption    and 

(4)  Corporations    to    be   formed  rate  of  tax. 

after  testator's  death. 

Vide  Adopted  Child;  Bishop;  Burden  of  Proof;  Cemetery 
Plot;  Charitable;  Deductions;  Educational;  Enforcement  Laws 
Concerning  Children  or  Animals;  Illegitimate  Descendants; 
Library;  Municipality;  Mutually  Acknowledged  Relation; 
Religious;  Wife. 

The  present  statutory  provisions  relative  to  exemptions  are 
contained  in  §§  221,  221a  and  2216,  and  are  discussed,  supra, 
page  40. 

Application  to  have  estate  declared  exempt  discussed,  supra, 
page  83. 

(1)  Exemptions  under  §  221 

The  historical  development  of  the  statute  relative  to  exemp- 
tions now  grouped  under  §  221  may  best  be  studied  by  the  ex- 
amination of  the  following  cases: 

LAWS  1887,  CHAP.  713:  Catlin  v.  Trustees  of  Trinity  College, 
113  N.  Y.  113,  supra,  page  164;  Matter  of  Van  Kleeck,  121 
id.  701;  Matter  of  Prime,  136  id.  347-355;  Matter  of  Hamilton, 
148  id.  310. 

LAWS  1892,  CHAP.  169:  Church  of  the  Transfiguration  v. 
Niles,  86  Hun,  221. 

LAWS  1892,  CHAP.  399:  Matter  of  Balleis,  144  N.  Y.  132; 
Matter  of  Palmer,  33  App.  Div.  307,  affirmed,  on  opinion 
below,  158  N.  Y.  669;  Matter  of  Wolfe,  23  Misc.  439. 

LAWS  1896,  CHAP.  908:  Matter  of  Thrall,  157  N.  Y.  46; 
Matter  of  Graves,  171  id.  40;  Matter  of  Kimberly,  27  App. 
Div.  470. 

LAWS  1900,  CHAP.  382:  Matter  of  Huntington,  168  N.  Y. 
399;  Matter  of  Watson,  171  id.  256;  Matter  of  Crouse,  34 
Misc.  670. 


086  EXEMPTIONS 

LAWS  1901,  CHAP.  458:  Matter  of  Prall,  78  App.  Div.  301; 
Matter  of  Kucielski,  144  id.  100. 

LAWS  1903,  CHAP.  41:  Matter  of  Eliza  White,  118  App.  Div. 
869. 

LAWS  1905,  CHAP.  368:  Matter  of  Francis,  189  N.  Y.  554; 
Matter  of  Mergentime,  195  id.  572;  Matter  of  McConnick, 
206  id.  100-104;  Matter  of  Moses,  138  App.  Div.  525;  Matter 
of  Higgins,  55  Misc.  175-178. 

LAWS  1908,  CHAP.  310;  Matter  of  Townsend,  153  App.  Div. 
85. 

LAWS  1909,  CHAP.  62:  Matter  of  Arnot,  145  App.  Div.  708, 
affirmed,  without  opinion,  203  N.  Y.  627;  Matter  of  Robinson, 
80  Misc.  458. 

LAWS  1911,  CHAP.  732:  Matter  of  Neustadter,  N.  Y.  Law 
Journal,  August  16,  1913,  opinion  quoted  page  688. 

(2)  Status  of  corporation  claiming  exemption 

The  status  of  a  corporation  claiming  exemption  under  §  221 
"must  be  determined  by  the  statutory  law  and  its  certificate  of 
incorporation  rather  than  by  what  it  has  assumed  to  do  there- 
under." Matter  of  Eliza  White,  118  App.  Div.  869-871; 
Matter  of  Moses,  138  App.  Div.  525-532;  Matter  of  Field,  71 
Misc.  396,  affirmed  147  App.  Div.  927;  Matter  of  Robinson, 
80  Misc.  458-465. 

Cooper  Union  by  its  charter  is  exempted  from  taxation,  but 
notwithstanding  that  fact  a  legacy  to  it  by  one  not  its  founder 
who  died  in  1901  is  subject  to  transfer  tax.  Matter  of  Kuciel- 
ski, 144  App.  Div.  100. 

UNITED  STATES  government  not  exempt.  Matter  of  Merriam, 
141  N.  Y.  479,  sustained  in  163  U.  S.  625,  sub  nom.  United 
States  v.  Perkins;  Matter  of  Cullum,  145  N.  Y.  593. 

MASONIC  HALL  and  Asylum  Fund  was  held  to  be  within 
the  exemptions  under  §  221  in  Matter  of  Allen,  76  Misc.  88 
(1912).  The  state  comptroller  contended  "that,  inasmuch  as 
the  education  and  the  charity  dispensed  by  this  corporation  are 
limited  to  a  particular  class,  i.  e.,  members  of  a  fraternal  organi- 
zation and  their  wives,  widows  and  orphans,  its  charity  or 
benevolence  is  not  of  a  general  or  public  nature,  as  its  benefits 
are  not  open  to  aged  and  indigent  men,  their  wives,  widows  and 
orphans  as  constituting  a  geneVal  class  of  humanity,  and  that 
the  appellant  being  a  private  charitable  or  benevolent  corpora- 
tion is  not  within  the  meaning  or  intent  of  the  exceptions  and 


EXEMPTIONS 


687 


limitations  contained  in  section  221  of  the  Tax  Law  in  relation 
to  taxable  transfers." 

City  of  Philadelphia  v.  Masonic  Home,  160  Penn.  St.  572, 
28  Atl.  Rep.  954,  was  cited  in  support  of  this  contention.  Surro- 
gate Fraser,  Washington  County,  in  overruling  the  contention 
said:  "The  statute  does  not  provide  that  the  exemption  shall 
be  to  a  public  educational,  charitable  or  benevolent  corporation, 
but  to  any  educational,  charitable  or  benevolent  corporation  and 
surely  it  cannot  be  successfully  contended  that  the  corporation, 
the  Trustees  of  the  Masonic  Hall  and  Asylum  Fund,  is  not  an 
educational  and  charitable  corporation." 

(3)  Form  for  affidavit  claiming  exemption 

The  claim  for  exemption  under  §  221  should  be  made  by 
affidavit  to  be  filed  with  the  appraiser. 

The  following  is  a  good  illustration  of  the  form  the  affidavit 
should  take: 

SURROGATES'  COURT,  NEW  YORK  COUNTY. 


In  the  Matter  of  the  Appraisal, 
under  the  Act  in  Relation  to 
Taxable  Transfers  of  Property, 
of  the  Property  of 

CORNELIA  EATON, 

Deceased. 


Affidavit  for  Exemption  Under 
§221. 


State  of  New  York, 
County  of  New  York, 

ROBERT  W.  DE  FOREST  being  duly  sworn,  says :  That  he  is  the  Vice 
President  of  the  Presbyterian  Hospital  in  the  City  of  New  York  and 
that  said  corporation  is  a  domestic  corporation  organized  by  charter  of 
the  State  of  New  York. 

That  said  corporation  was  incorporated  and  is  maintained  exclu- 
sively for  hospital  purposes,  and  is  a  Hospital  corporation  within  the 
meaning  of  Section  221  of  Chapter  62  of  the  Laws  of  1909,  and  all 
other  acts  amendatory  and  supplemental  thereto.  That  the  object  of 
said  corporation  is,  as  set  forth  in  its  charter,  to  wit : 

"The  object  of  the  Society  is  the  establishment, 
"support  and  management  of  an  institution  for 
"the  purpose  of  affording  surgical  and  medical 
"aid  and  nursing  to  sick  and  disabled  persons 
"of  every  creed,  nationality  and  color." 

That  the  said  corporation  is  not  a  stock  corporation,  nor  profit- 
muking  enterprise  of  any  description. 


088  EXEMPTIONS 

That  no  officer,  member  or  employee  receives  or  is  entitled  to  receive 
any  pecuniary  profit  from  the  operations  of  the  said  corporation,  except 
reasonable  compensation  for  services  in  effecting  one  or  more  of  the 
purposes  for  which  said  corporation  was  organized. 

WHEREFORE  the  deponent  asks  that  the  said  corporation  may  be 
declared  exempt  from  the  payment  of  the  transfer  tax  on  the  legacy  to 
it  under  the  last  Will  and  Testament  of  Cornelia  Eaton,  deceased. 

ROBERT  W.  DE  FOREST. 
Sworn  to  before  me  this 
14th  day  of  October,  1912. 
WILLIAM  MCBRIEN, 
Notary  Public,  Queens  County, 
Certificate  filed  in  New  York  Co.  (No.  24). 

It  is  true  that  the  courts  have  allowed  an  exemption  under 
§  221  even  though  it  has  not  been  claimed  at  the  time  of  ap- 
praisal. The  practitioner  should  not,  however,  depend  upon 
the  court  allowing  the  exemption  but  should  make  his  claim 
in  due  season. 

(4)  Corporation  to  be  formed  after  testator's  death 

Bequests  and  devises  to  a  corporation  to  be  formed  to  be 
known  as  Arnot  Art  Gallery  were  held  exempt.  Matter  of 
Arnot,  145  App.  Div.  708,  affirmed,  without  opinion,  203  N.  Y. 
627.  The  testator  died  February  15,  1910,  and  the  Arnot  Art 
Gallery  was  incorporated  in  March,  1911. 

Under  Laws  1896,  chap.  908,  a  bequest  to  trustees  "for  the 
purpose  of  founding,  erecting  and  maintaining"  a  proposed 
Home  for  the  Aged  was  held  not  subject  to  tax.  Matter  of 
Graves,  171  N.  Y.  40.  Vide  Matter  of  McCartin,  N.  Y.  Law 
Journal,  December  5,  1913,  opinion  quoted  supra,  page  608. 

CORPORATION  NOT  FORMED  AT  TIME  OF  APPRAISAL.  In  Mat- 
ter of  Caroline  Neustadter,  N.  Y.  Law  Journal,  August  16,  1913, 
Surrogate  Cohalan  held:  "The  decedent  died  on  the  19th  day  of 
January,  1912,  a  resident  of  New  York  County.  An  appraiser 
was  duly  appointed  to  appraise  her  estate  for  the  purpose  of  the 
transfer  tax,  and  from  the  order  entered  upon  his  report  this 
appeal  is  taken.  In  paragraph  twenty-fourth  of  her  will  she 
gives  to  trustees  therein  named  the  sum  of  $1,000,000,  and 
directs  them  to  organize  a  corporation  to  be  known  as  'The 
Neustadter  Homes/  the  corporation  to  be  formed  within  two 
years  after  her  decease,  'provided  Marjorie  Walker,  George 
Sternberger  or  the  survivor -of  them  shall  live  so  long.'  She 
further  directed  that  the  corporation  should  erect  'model 


EXEMPTIONS  689 

homes'  for  persons  of  moderate  means,  and  that  it  should  charge 
such  rental  for  the  homes  as  would  show  a  net  return  of  six  per 
cent,  upon  the  investment.  This  net  income  may  be  used  in  the 
discretion  of  the  trustees  for  the  purpose  of  erecting  new  build- 
ings or  improving  and  altering  the  existing  ones. 

"  It  is  contended  by  the  executors  that  this  bequest  is  exempt 
from  taxation  as  being  for  a  charitable  purpose.  A  net  return  of 
six  per  cent,  upon  capital  invested  in  real  estate  holdings  would 
ordinarily  be  regarded  as  good  business,  and  the  persons  who 
occupied  homes  erected  by  such  a  corporation  and  paid  such 
rentals  as  would  insure  a  net  income  of  six  per  cent,  upon  the 
capital  invested  would  certainly  resent  the  insinuation  that 
they  were  objects  of  charity.  Under  modern  conditions  it  is 
sometimes  difficult  to  determine  accurately  where  philanthropy 
begins  and  where  business  ends,  but  I  doubt  if  we  have  yet 
reached  the  stage  of  philanthropic  development  when  a  net 
return  of  six  per  cent,  on  capital  invested  in  real  estate  can 
properly  be  characterized  as  an  investment  for  charitable  pur- 
poses. I  am  inclined  to  think  that  the  Legislature  intended 
to  limit  the  meaning  of  the  word  'charitable'  as  used  hi  the 
Transfer  Tax  Act  to  those  corporations  which  aid  the  poor  and 
needy  by  gifts,  donations  or  other  financial  assistance  from 
which  a  pecuniary  dividend  is  neither  expected  nor  required. 
The  will  further  provides  that  the  corporation  must  be  organized 
within  the  lifetime  of  Marjorie  Walker  and  George  Sternberger, 
or  the  survivor  of  them.  These  persons  are  not  identified  in  the 
will,  and  there  is  nothing  in  the  appraiser's  report  to  show 
whether  they  are  still  alive.  If  they  are  not  living  the  corpora- 
tion cannot  be  organized.  In  that  case  the  bequest  would 
lapse  and  become  a  part  of  the  residuary  estate,  and  taxable 
at  the  rate  prescribed  for  beneficiaries  of  the  one  per  cent, 
class.  In  a  codicil  to  the  will  the  testatrix  directs  that  if  it 
should  be  held  that  this  bequest  is  subject  to  a  transfer  tax, 
then  that  provision  of  the  will  is  revoked,  and  she  directs  the 
trustees  to  form  'a  charitable  corporation  to  be  known  and 
designated  as  the  Neustadter  Home.' 

"  This  corporation  has  not  yet  been  organized,  and  until  satis- 
factory proof  has  been  made  to  the  court  that  the  proposed 
corporation  shall  be  charitable  within  the  meaning  of  that  word 
in  section  221  of  the  Tax  Law,  and  that  it  was  organized  within 
the  time  limited  by  the  will  and  codicil,  it  will  not  be  declared 
exempt  from  taxation." 
44 


090  EXEMPTIONS 

BEQUEST  TO  TRUSTEES  FOR  CHARITABLE  AND  BENEVOLENT 
PURPOSES  was  discussed  by  Surrogate  Sawyer,  Westchester 
County,  in  Matter  of  Robinson,  80  Misc.  458  (1913).  The  state 
comptroller  contended  that  the  bequest  was  not  exempt  under 
§  221  because  it  was  not  to  a  corporation,  his  brief  stating: 
"There  is  no  doubt  that  the  purposes  provided  for  by  the 
testatrix  were  charitable  and  benevolent.  Nor  can  there  be 
any  doubt  that  the  transfer  of  her  residuary  estate  was  to  these 
two  trustees  and  not  to  a  corporation." 

The  estate  claimed  the  transfer  was  exempt  under  §  221 
because  the  bequest  was  left  in  trust  for  charitable  purposes 
and  provision  was  made  that  the  execution  of  such  charitable 
purposes  may  be  carried  out  by  a  corporation,  if  the  trustees 
think  it  advisable. 

The  surrogate  held  that  the  transfer  was  taxable  and  in  the 
course  of  his  opinion  said : 

" The  question  in  this  case  then  is  simply  this:  Is  a  bequest  to 
two  trustees,  in  trust,  for  charitable  purposes,  with  a  discre- 
tionary right  given  to  the  two  trustees  to  form  a  corporation,  if 
they  deem  it  advisable,  to  carry  out  the  trusts  provided  for  in 
the  will  of  the  testatrix,  exempt  from  taxation  under  the  pro- 
visions of  the  first  portion  of  section  221  of  the  Transfer  Tax 
Law,"  which  is  as  follows: 

"But  any  property  devised  or  bequeathed  to  any  person  who 
is  a  bishop  or  to  any  religious,  educational,  charitable,  mis- 
sionary, benevolent,  hospital  or  infirmary  corporation,  including 
corporations  organized  exclusively  for  Bible  or  tract  purposes, 
shall  be  exempted  from  and  not  subject  to  the  provisions  of  this 
article." 

"  There  is  no  mandatory  direction  by  the  testatrix  to  the 
trustees  to  form  any  corporation.  They  may  do  so  if  they 
choose,  or  they  may  increase  the  number  of  trustees;  but  the 
right  given  to  form  a  corporation  is  simply  permissive  and  not 
mandatory. 

"  The  testatrix  died  in  1909,  four  years  ago.  No  corporation 
has  ever  been  formed  by  the  trustees,  nor  have  I  received  any 
intimation  that  one  will  ever  be  formed.  I  -think  that  I  can 
safely  say  that  one  never  will  be  formed.  If  the  intention  of  the 
trustees  had  been  to  form  a  corporation  to  carry  out  the  pur- 
poses as  set  forth  in  the  will,  they  certainly  would  have  filed  their 
certificate  of  incorporation  within  the  four  years  last  past.  I  am 
compelled  to  take  the  situation  as  I  find  it.  The  title  to  the 


EXEMPTIONS  691 

'  res '  or  trust  fund  is  certainly  now  vested  in  Burton  C.  Meighan 
and  Frank  B.  Upham,  in  trust,  for  the  purposes  as  set  forth  in 
the  will  of  the  testatrix.  Section  220  specifically  states  that  the 
transfer  of  any  property,  real  or  personal,  over  $500,  is  taxable, 
whether  the  same  is  in  trust  or  otherwise. 

"By  the  most  strained  construction  of  section  221, 1  do  not  see 
how  the  framers  of  the  law  ever  intended  that  a  bequest  such  as 
the  one  under  consideration  should  be  exempt  under  the  clause 
quoted.  The  devise  is  clearly  not  to  a  corporation.  There 
being  no  corporation  formed,  how  are  we  to  ascertain  the  status 
of  the  corporation  and  determine  whether  or  not  it  is  a  chari- 
table, religious,  or  other  kind  of  a  corporation.  This  phase  of  the 
situation  was  considered  in  the  Matter  of  White,  reported  in 
118  App.  Div.  869,  103  N.  Y.  Supp.  688,  and  the  judge  writing 
the  opinion  stated  as  follows: 

"  *  The  status  of  this  corporation  must  be  determined  by  the 
statutory  law  and  its  certificate  of  incorporation  rather  than  by 
what  it  has  assumed  to  do  thereunder.' 

"This  is  the  proper  way  of  determining  the  status  of  any 
corporation  claiming  exemption  under  the  Transfer  Tax  Law. 

"The  above  case  was  cited  with  approval  in  Matter  of  Moses, 
138  App.  Div.  525,  123  N.  Y.  Supp.  443. 

"It  is  an  elementary  rule  of  statutory  construction  that  the 
words  of  a  statute  are  to  be  given  the  usual  ordinary  meaning. 
McCluskey  v.  Cromwell,  11  N.  Y.  593;  Matter  of  O'Neil,  91 
N.  Y.  516;  Matter  of  Daly,  79  Misc.  Rep.  586,  141  N.  Y.  Supp. 
199. 

"If  the  Legislature  had  intended  to  pass  an  act  allowing 
exemptions  to  trustees  for  charitable  purposes,  they  certainly 
would  not  have  divided  the  section  into  two  different  para- 
graphs, one  in  which  they  exempted  only  devises  and  bequests 
to  certain  corporations  and  the  other  of  which  they  exempted 
where  the  devise  or  bequest  was  to  corporations  for  charitable 
purposes. 

"As  the  case  at  bar  is  a  devise  to  trustees  for  a  charitable 
purpose,  by  the  most  liberal  construction,  I  am  compelled  to 
hold  that  even  though  there  is  a  permissive  right  to  form  a 
corporation,  where  some  steps  have  not  actually  been  taken  to 
form  such  a  corporation,  this  fact  in  itself  will  not  be  sufficient 
to  warrant  an  exemption  under  the  first  paragraph  of  section  221 
of  the  Tax  Law.  If  the  corporation  had  been  already  formed 
when  the  application  was  made  to  this  court,  the  result  might 


692  EXEMPTIONS 

be  different.  I  am  not  called,  however,  to  pass  upon  this  ques- 
tion at  this  time.  The  corporation  has  never  been  formed. 

"  Clearly  the  framers  of  this  statute  never  intended  any  de- 
vise to  a  trustee  for  charitable  purposes  to  be  exempt  under  sec- 
tion 221.  While  fully  appreciating  the  charitable  intentions  of 
the  testatrix,  I  am  of  the  opinion  that  the  statute  shows  clearly 
that  a  tax  must  be  imposed  in  this  case  upon  the  residuary 
estate  transferred.  If  the  law  is  severe,  then  the  remedy  lies 
with  the  Legislature  and  not  with  the  courts." 

Appeal  from  decision  pending. 

(6)  Foreign  corporations  prior  to  1911  amendment 

Foreign  corporations  are  now  entitled  to  exemption,  but 
transfers  made  prior  to  1911  amendment  are  not  exempt. 
Matter  of  Julia  A.  Smith,  77  Hun,  134;  Matter  of  Balleis,  144 
N.  Y.  132;  Matter  of  Prime,  136  N.  Y.  347;  Matter  of  Wolfe, 
23  Misc.  439. 

In  Matter  of  Charles  N.  Crittenton,  N.  Y.  Law  Journal, 
April  5,  1911,  Surrogate  Cohalan  held:  "This  appeal  is  taken 
by  the  National  Florence  Crittenton  Mission  from  an  order 
assessing  a  tax  upon  the  transfer  of  a  bequest  made  to  it  by  the 
decedent.  The  appellant  was  created  by  an  act  of  Congress 
and  made  a  body  politic  and  corporate  in  the  District  of 
Columbia.  Its  headquarters  are  in  Washington,  but  it  main- 
tarns  a  place  in  New  York  City  for  the  exercise  of  its  benevo- 
lent and  charitable  functions.  It  claims  that  it  is  included  in  the 
classification  of  exempt  corporations  mentioned  in  section  221 
of  the  Transfer  Tax  Act.  That  it  is  a  benevolent  and  chari- 
table association  may  be  conceded,  but  to  entitle  it  to  exemption 
from  the  operation  of  the  provisions  of  the  Transfer  Tax  Law 
it  must  also  appear  that  it  is  a  corporation  created  by  or  under 
the  laws  of  the  State  of  New  York  and  subject  to  visitation  and 
control  by  this  State  (Matter  of  Prime,  136  N.  Y.  347;  Matter 
of  Balleis,  144  N.  Y.  132).  The  appellant  contends  that  it  is  a 
domestic  corporation  within  the  meaning  of  the  definition  in 
subdivision  18  of  section  3343  of  the  Code.  But  this  definition 
is  explained  and  limited  by  article  1,  section  3,  subdivision  5, 
of  the  General  Corporation  Act,  which  defines  a  corporation  as 
'a  corporation  incorporated  by  or  under  the  laws  of  the  State 
or  Colony  of  New  York.  Every  corporation  which  is  not  a 
domestic  corporation  is  a  foreign  corporation,  except  as  pro- 
vided by  the  Code  of  Civil  Procedure  for  the  purpose  of  con- 


EXPERT  693 

struing  such  Code.'  As  this  proceeding  is  not  brought  under  the 
Code  of  Civil  Procedure,  but  is  an  application  for  exemption 
from  taxation  under  an  entirely  independent  act,  it  must  be 
held  that  the  appellant  is  not  a  domestic  corporation  for  the 
purpose  of  claiming  the  exemption  provided  in  section  221  of  the 
Transfer  Tax  Law." 

AMERICAN  BAPTIST  FOREIGN  MISSION  SOCIETY  incorporated 
in  three  states,  including  New  York,  held  to  be  exempt  under 
§  221.  Matter  of  Lyon,  144  App.  Div.  104. 

(6)  Legislature  may  release  from  tax 

Legislature  may  release  property  which  had  been  bequeathed 
or  devised  from  the  provisions  of  the  inheritance  tax  act, 
whether  such  bequest  or  devise  had  become  operative  prior  to 
the  passage  of  the  act,  or  subsequent  thereto.  Church  of  the 
Transfiguration  v.  Niles,  86  Hun,  221-223.  Vide  cases  cited 
sub  Legislative  Declaration. 

(7)  Amount  of  exemption  and  rate  of  tax 

The  statutory  provisions  relative  to  rates  of  tax  and  the 
amount  of  exemption  to  the  individual  beneficiary  are  now 
comprised  within  §  221a.  The  present  statute  is  discussed, 
supra,  page  40.  The  previous  statutes  are  set  forth,  supra, 
page  403,  and  the  cases  on  this  branch  of  the  law  are  arranged 
chronologically,  post,  page  808. 

EXPENSES 

Of  administration  vide  Schedule  B2  supra,  page  125.  Funeral 
expenses,  Schedule  B1  supra,  page  124. 

EXPERT 

"In  practice  if  a  person  who  is  a  resident  of  this  State  dies 
seized  of  real  estate  the  appraiser  does  not  personally  appraise 
the  property,  but  accepts  the  evidence  of  some  one  qualified  to 
appraise  real  estate;  if  the  property  consists  of  paintings,  statu- 
ary or  works  of  art  the  appraiser  requires  the  evidence  of  a 
person  xWhose  experience  and  knowledge  of  art  and  the  market 
for  art  enable  him  to  testify  as  to  the  value  of  such  articles;  if 
the  property  consists  of  stocks  and  bonds,  their  value  is  ascer- 
tained by  a  reference  to  the  quotations  in  the  standard  financial 
publications,  or  if  necessary,  experts  may  be  called."  Matter 
of  Cora  F.  Barnes,  N.  Y.  Law  Journal,  December  17,  1913. 


FAIR   MARKET  VALUE 

Appraisal  of  real  estate  by  expert,  vide  Schedule  A1  supra, 
page  98. 

Of  personal  chattels,  vide  Schedule  A3  supra,  page  107. 

Expert  accountant,  vide  Schedule  A5  supra,  page  117. 

Stock  not  customarily  bought  or  sold,  vide  Closely  Held  Stock. 

As  to  laws  of  another  state  or  country,  §  942  of  Code  of  Civil 
Procedure  and  page  729. 

FAIR  MARKET  VALUE 

Vide  Cash  Value. 

FATHER 

Entitled  to  five  thousand  dollar  exemption  and  the  lower 
rates  of  subd.  1  of  §  22  la.  Vide  pages  45  et  seq. 

FEDERAL  INHERITANCE  TAX 

The  taxable  assets  should  not  be  diminished  by  first  sub- 
tracting the  tax  fixed  by  the  United  States  Inheritance  Tax. 
Matter  of  Gihon,  169  N.  Y.  443;  Matter  of  Becker,  26  Misc. 
633-635;  Matter  of  Irish,  28  id.  647;  etiam  Matter  of  Penfold, 
81  id.  598. 

FEDERAL  QUESTIONS 

Vide  United  States  Supreme  Court,  cases  post,  page  877; 
Appeal,  supra,  page  593. 

FINAL  ACCOUNTING 

Vide  second  sentence  of  §  236;  etiam  Matter  of  Meyer,  209 
N.  Y.  386,  supra,  page  397. 

FITCHBURG  R.  R.  CO. 

Prior  to  amendment  by  chap.  732,  Laws  1911,  in  effect 
July  21,  1911,  stock  of  Fitchburg  Railroad  Company,  of  which 
non-resident  decedent  died  possessed,  was  taxed  on  2551/10000 
basis.  Matter  of  Thayer,  193  N.  Y.  430. 

Since  the  1911  amendment  to  §§  220  and  243  stock  is  not 

taxable  in  non-resident's  estate. 

/ 

FOREIGN  CORPORATIONS 

Stock  of  foreign  corporations  taxable  when  held  by  resident. 
Matter  of  Merriam,  141  N.  Y.  479-485;  subd.  1  of  §  220  and 
third  sentence  of  §  243. 


FORMS  695 

STOCK  OF  FOREIGN  CORPORATION  HELD  BY  NON-RESIDENT 
not  taxable  even  prior  to  amendment  by  Laws  1911,  chap.  732. 
The  fact  of  the  certificate  of  stock  being  physically  within  the 
state  did  not  affect  the  rule.  Matter  of  James,  144  N.  Y.  6. 
As  to  stock  held  by  non-resident  prior  to  1911  amendment 
in  a  corporation  incorporated  in  New  York  and  other  states  vide 
Apportionment  of  Property. 

PRIOR  TO  AMENDMENT  OF  SECTION  221  by  Laws  1911, 
chap.  732,  in  effect  July  21,  1911,  foreign  corporations  were  not 
entitled  to  the  exemptions  of  said  section.  Matter  of  Prime, 
136  N.  Y.  347;  Matter  of  Balleis,  144  N.  Y.  132. 

Corporation  created  by  Congress  held  to  be  foreign  corpora- 
tion within  the  meaning  of  §  221  prior  to  1911  amendment. 
Matter  of  Crittenton,  N.  Y.  Law  Journal,  April  4,  1911. 

NATIONAL  BANK,  held  to  be  domestic  corporation.  Matter  of 
Gushing,  40  Misc.  505. 

FOREIGNER 

Vide  Treaty;  Non-resident;  Residence. 

FORGIVING  DEBT 

Vide  Schedule  A3  supra,  page  111. 

FORMS 

Affidavit  as  to  non-residence,  page  146. 

as  to  value  of  real  estate,  page  98. 
"        for  appraisal,  page  87. 

"        for  appraisal  (non-resident  estate),  page  143. 
"        for  exemption  under  §  221,  page  687. 

under  §  238,  page  61. 

"        upon  application  in  non-resident  estate  for  consent 
under  §  227,  page  136. 

Application  for  waiver  for  transfer  of  securities,  page  69. 
Notice  of  appraisal,  page  80. 

"      of  motion  under  §  2481  of  the  Code,  page  881. 
Order  amending  original  order,  page  883. 

"     appointing  appraiser,  on  petition  of  estate's  representa- 
tive, page  76. 

Order  appointing  appraiser,  on  Surrogate's  own  motion,  page 
73. 

Order  appointing  appraiser  (non-resident  estate),  page  142. 
"     declaring  estate  exempt,  page  84. 


096  FOURTEENTH    AMENDMENT 

Order  fixing  tax,  page  50. 

"    (non-resident),  page  157. 
"     permitting  search  of  safe  deposit  box,  page  59. 
"     remitting  penalty,  page  724. 
Petition  for  appointment  of  appraiser,  page  74. 

(non-resident  estate), 
page  139. 
Petition  to  modify  decree,  page  881. 

to  open  safe  deposit  box,  page  57. 
"        to  remit  penalty,  page  723. 
Report  of  appraiser  in  resident  estate,  page  50. 

"  non-resident  estate,  page  155. 

Waiver  from  state  comptroller  re  opening  safe  deposit  box, 
page  60. 

Waiver  re  release  of  safe  deposit  box,  page  67. 

"       re  transfer  of  securities,  page  70. 

Warrant  of  state  comptroller  for  return  of  overpayment, 
page  764. 

FOURTEENTH  AMENDMENT 

"The  Fourteenth  Amendment  does  not  dimmish  the  taxing 
power  of  the  State."  Keeney  v.  New  York,  222  U.  S.  525-535, 
sustaining  Matter  of  Keeney,  194  N.  Y.  281 ;  Chanler  v.  Kelsey, 
205  U.  S.  466-478,  sustaining  Matter  of  Delano,  176  N.  Y.  486. 

FRACTION  OF  DAY 

As  to  when  death  of  decedent  occurs  on  same  day  upon  which 
statute  is  passed  vide  Matter  of  Dreyfous,  18  N.  Y.  Supp.  767; 
Matter  of  Lane,  157  App.  Div.  694-697,  post,  page  809. 

FRAUD 

Vide  second  sentence  of  §  232,  supra,  page  20;  Evasion  of 
Tax;  Reappraisal. 

FULL  FAITH  AND  CREDIT 

Vide  Laws  of  Another  State  or  Country;  Comity. 

FUNERAL  EXPENSES 

Vide  Schedule  B1  supra,  page  124. 

FUTURE  ESTATES 

Vide  §  230;  Life  Estate;  Power  of  Appointment;  Remainders; 
Superintendent  of  Insurance. 


GIFT  697 

GENERAL  CONSTRUCTION  LAW 

The  transfer  tax  law  has  been  continuously  in  force  since  the 
original  act  of  1885.  Matter  of  Jones,  54  Misc.  202;  §  93  of 
General  Construction  Law. 

GENERAL  TAX 

The  tax  is  not  a  general  tax.  Matter  of  Enston,  113  N.  Y. 
174-177,  supra,  page  165,  and  cases  cited  supra,  page  2. 

GIFT 

(1)  Definition  of  taxable  gift.  (5)  Unrecorded  deed. 

(2)  Proceedings  taken  upon  infor-          (6)  Convincing    evidence    neces- 

mation  given  comptroller.  sary  to  establish  gift  inter 

(3)  Income     or     possession     re-  vivos. 

served  by  grantor.  (7)  Report    remitted    for    addi- 

(4)  Power     of     revocation     not  tional  testimony. 

reserved.  (8)  Gifts  held  not  taxable. 

Vide  Ante-Nuptial  Contract;  Contemplation  of  Death;  Eva- 
sion of  Tax;  Property  Held  Jointly  or  in  Trust;  Trust  Deed. 

(1)  Definition  of  taxable  gift 

A  gift,  other  than  by  will,  is  not  subject  to  the  tax  unless  it 
comes  within  the  meaning  and  intendment  of  subdivision  4  of 
§  220  which  provides  that  a  tax  shall  be  imposed  "when  the 
transfer  is  of  intangible  property,  or  of  tangible  property  within 
the  state  made  by  a  resident,  or  of  tangible  property  within 
the  state  made  by  a  non-resident,  by  deed,  grant,  bargain,  sale 
or  gift  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  donor  or  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  such  death." 

For  discussion  of  distinction  between  a  gift  "made  in  con- 
templation of  death"  and  a  gift  "intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  such  death "  vide  page  35. 
For  cases  of  gifts  made  in  contemplation  of  death  vide  page  643. 

Tax  is  not  limited  to  transfer  of  property  gratuitously  given 
by  will  but  is  extended  to  all  property  transferred  by  will. 
Matter  of  Jay  Gould,  156  N.  Y.  423;  Matter  of  Rogers,  71 
App.  Div.  461-465,  affirmed,  on  opinion  below,  172  N.  Y.  617; 
etiam  Matter  of  Edson,  38  App.  Div.  19-22,  affirmed,  on  opinion 
below,  159  N.  Y.  568. 

"  It  is  true,  "  said  Chief  Justice  Cullen  in  Matter  of  Keeney, 
194  N.  Y.  281-287,  sustained  hi  222  U.  S.  525,  sub  nom.  Keeney 


698  GIFT 

v.  New  York,  "that  an  ingenious  mind  may  devise  other  means 
of  avoiding  an  inheritance  tax,  but  the  one  commonly  used  is  a 
transfer  with  reservafipn  of  a  life  estate.  We  think  this  fact 
justified  the  legislature  in  singling  out  this  class  of  transfers  as 
subject  to  a  special  tax." 

(2)  Proceedings  taken  upon  information  given  comptroller 

In  reply  to  letter  from  surrogate  of  Chemung  County  the 
comptroller  wrote  an- opinion,  dated  April  16,  1913,  2  State 
Department  Reports,  497-500,  in  which  he  said,  inter  alia: 
"Occasionally  proceedings  are  instituted  by  a  surrogate  'upon 
his  own  motion/  where  he  believes  an  attempt  was  made  to 
avoid  the  statute  or  the  acts  of  the  parties  would  indicate  such 
an  intention.  And  '&  frequently  happens  that  information  is 
given  the  comptrolleyor  his  attorney  as  to  the  disposition  of 
property  by  a  decedent  a  short  time  prior  to  his  death  from 
which  an  estate  otherwise  exempt  is  rendered  taxable." 

"THE  COUNTY  CLERK  of  each  county,  except  in  the  counties 
where  the  registers  perform  the  duties  of  the  county  clerk  with 
respect  to  the  recording  of  deeds,  and  when  in  such  counties  the 
registers,  shall,  at  the  same  times,  make  reports  containing  a 
statement  of  any  deed  or  other  conveyance  filed  or  recorded  in 
his  office,  of  any  property,  which  appears  to  have  been  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor  or  vendor  *  *  *  which  shall  be  imme- 
diately forwarded  to  the  state  comptroller."  Section  239. 

(3)  Income  or  possession  reserved  by  grantor 

Decedent  deeded  without  adequate  consideration  to  her 
cousin  certain  real  estate  and  on  the  same  day  the  cousin 
leased,  without  rent,  the  real  estate  to  decedent  for  life,  by 
which  arrangement  the  decedent  retained  absolute  possession 
and  actually  had  the  income  of  the  transferred  property  until 
her  death.  In  declaring  the  transfer  taxable  under  subdivision  4 
of  §  220,  Surrogate  Sexton,  Oneida  County,  in  Matter  of  Dob- 
son,  73  Misc.  170,  summarizes  his  conclusions  by  saying: 
"The  whole  transaction  looks  to  me  like  a  varnished  attempt 
to  evade  the  Transfer  Tax  Law.  It  was  not  a  bona  fide  sale  for  a 
consideration,  but  a  gift  by  deed  of  $80,000  worth  of  real 
estate  for  such  companionship  and  care  as  Thomas  (the  grantee) 
might  feel  equal  to.  Dobson  (the  decedent),  sold  the  cow,  but 
hung  on  to  the  tail  and  milk.  On  the  evidence  in  this  case,  the 


GIFT  699 

title  of  Thomas  was  as  fruitless  and  barren  as  was  Samson's 
mother  before  the  angel  called.  The  woman  with  every  other 
requisite  awaited  the  germ  of  life;  so  Thomas  sat  on  the  sands 
of  a  barren  title,  awaiting  Dobson's  death  for  full  fruition." 

As  to  transfer  in  trust  intended  to  take  effect  at  or  after 
death  vide  Matter  of  Keeney,  194  N.  Y.  281-287,  sustained  in 
222  U.  S.  525,  sub  nom.  Keeney  v.  New  York,  and  cases  cited 
sub  Trust  Deed. 

GIFT  ABSOLUTE  ON  ITS  FACE  HELD  TAXABLE  under  the  cir- 
cumstances of  the  case.  "The  evidence  clearly  shows  that 
Rufus  was  to  be  the  custodian  or  manager  of  the  property  and 
that  the  transfer  to  him  although  absolute  in  form  was  merely 
for  the  accomplishment  of  that  purpose."  Matter  of  John 
Palmer,  117  App.  Div.  360-369. 

About  ten  years  before  his  death  decedent  in  MATTER  OF 
NEWMAN  COWAN,  N.  Y.  Law  Journal,  July  24,  1913,  made  and 
delivered  to  his  daughter  and  to  his  two  sons  deeds  of  certain 
New  York  real  estate.  Each  of  said  deeds  contained  the  follow- 
ing clause:  "Excepting  and  reserving,  however,  to  the  said 
Newman  Cowan,  party  of  the  first  part  hereto,  the  full  use  and 
absolute  control  of  all  of  said  premises  hereinabove  described, 
and  all  of  the  rents,  issues  and  profits  hereof,  during  the  term  of 
the  natural  life  of  the  said  Newman  Cowan." 

Surrogate  Cohalan  held  that  the  transfer  of  the  real  property 
was  a  gift  intended  to  take  effect  at  death  of  the  grantor  and 
therefore  taxable  under  the  provisions  of  subdivision  4  of  §  220. 

(4)  Power  of  revocation  not  reserved 

GIFT  OF  STOCK  WITH  RESERVATION  OF  RIGHT  TO  VOTE  STOCK 
and  upon  condition  that  all  dividends  to  be  paid  to  donor  until 
death,  held  taxable  although  no  power  of  revocation  reserved. 
Matter  of  Brandreth,  169  N.  Y.  437-442. 

GIFT  OF  SECURITIES  UNDER  AGREEMENT  that  the  donor 
should  have  during  his  lifetime  "all  or  such  part  of  the  net  in- 
come of  such  securities  as  he  might  wish"  held  taxable.  No 
power  of  revocation  was  reserved.  Matter  of  Cornell,  170  N.  Y. 
423.  Vide  etiam  Matter  of  Webber,  151  App.  Div.  539-540. 

CAUSA  MORTIS  GIFT  subject  to  revocation  at  all  times  during 
lifetime  of  the  giver  takes  effect  after  death  of  grantor  and  is 
subject  to  tax.  Matter  of  Edwards,  146  N.  Y.  380,  supra, 
page  194;  Matter  of  Birdsall,  22  Misc.  180-195,  affirmed,  with- 
out opinion,  43  App.  Div.  624. 


700  GIFT 

(5)  Unrecorded  deed 

Decedent  five  years  prior  to  his  death  had  executed  deeds  of 
his  farms  to  his  son  and  to  members  of  his  son's  family,  the 
deeds  remaining  unrecorded,  and  in  possession  of  grantor.  The 
testimony  indicated  that  the  grantees  were  not  in  possession  of 
the  farms  described  in  the  deeds,  and  that  it  was  not  intended 
that  they  should  be  until  his  death.  Held,  taxable.  Matter  of 
Jones,  65  Misc.  121. 

IN  MATTER  OF  SHARER,  36  Misc.  502,  the  decedent  had  a 
metallic  box  which  he  kept  at  his  bank.  On  this  box  he  had 
pasted  a  paper  upon  which  he  had  written  his  name  and  also 
the  name  of  his  sister-in-law.  After  the  decedent's  death  there 
was  found  in  this  box  unrecorded  deeds  from  himself  to  said 
sister-in-law  and  also  executed  assignments  of  certain  stock  and 
a  mortgage,  and  certificates  of  deposit  endorsed  on  the  back  by 
him  to  the  order  of  another  sister-in-law.  The  several  docu- 
ments were  in  envelopes  on  which  the  decedent  had  written  "  the 
property  of"  with  the  name  of  the  person. 

The  executors  claimed  that  the  property  in  this  box  passed 
by  the  instruments  described  and  was  not  taxable  in  the  estate 
of  the  decedent.  The  state  claimed  that  the  alleged  transfers 
were  incomplete  and  ineffectual  because  not  delivered  and,  if 
valid,  that  they  were  not  intended  to  take  effect  in  possession 
and  enjoyment  until  at  or  after  the  death  of  the  decedent. 
Surrogate  Devendorf,  Herkimer  County,  held  that  the  property 
was  subject  to  the  tax,  saying:  "I  have  considered  the  case 
carefully  and  am  convinced  that  the  deceased  never  intended  to 
and  in  law  did  not  part  absolutely  with  his  bank  stock,  railroad 
stock,  certificates  of  deposit,  the  Keller  and  Daily  mortgages 
and  the  reat  estate  mentioned. 

"  It  is  true  that  he  signed  certain  papers  which  if  delivered  in 
good  faith  and  followed  by  a  change  of  possession  and  acts  of 
ownership  on  the  part  of  the  transferee  would  be  good  and 
effectual  to  carry  absolute  and  title  away  from  him;  but  to  all 
the  world  after  the  date  of  the  alleged  delivery  he  continued  to 
be  and  remain  the  owner  of  the  property  as  before;  the  property 
was  not  within  the  reach  of  either  Margaret  or  Julia  Caldwell 
when  it  went  to  Sharer's  private  box  at  the  bank;  he  received 
the  income  from  it  and  so  far  as  can  be  determined  treated  it 
as  his  own;  he  still  exercised  dominion  over  it  and  did  not  permit 
the  transfer  to  take  effect  so  far  as  the  use  or  control  of  the 
property  was  concerned  during  his  life. 


GIFT  701 

"Whatever  may  be  alleged  as  to  the  legality  of  the  execution 
of  the  papers  and  the  alleged  subsequent  delivery  thereof, 
yet  the  property  was  so  managed  and  such  management  ac- 
quiesced in  by  the  parties  that  the  transfer  if  any  took  effect 
after  Sharer's  death." 

(6)  Convincing  evidence  necessary  to  establish  gift  inter  vivos 
IN  MATTER  or  LAWRENCE,  N.  Y.  Law  Journal,  February  15, 
1913,  Surrogate  Fowler  said,  inter  alia:  "Under  the  law  of  this 
State,  in  order  to  establish  a  valid  gift,  it  is  necessary  to  show 
that  the  donor  delivered  to  the  donee  the  property  constituting 
the  gift,  or  that  such  delivery  was  made  to  some  one  authorized 
to  accept  the  gift  on  behalf  of  the  donee  (Matter  of  Bolin,  136 
N.  Y.  177;  Gannon  v.  McClure,  160  N.  Y.  484).  In  the  matter 
under  consideration  there  is  no  proof  that  the  decedent  delivered 
the  bonds  hi  question  to  any  of  the  parties  claiming  title 
thereto. 

"From  the  evidence  adduced  before  the  appraiser  it  appears 
that  the  safe  deposit  vault  in  the  National  Park  Bank  in.  the 
City  of  New  York  was  rented  by  the  decedent,  that  he  was  the 
only  lessee  of  the  vault  and  that  no  one  except  him  had  a  key  to 
the  vault.  It  also  appears  that  when  the  safe  deposit  box  was 
opened  after  his  death  there  were  found  therein  nine  bundles 
containing  bonds,  each  bundle  being  held  together  by  one  or 
more  rubber  bands.  Five  of  the  bundles  had  pinned  to  the  top 
bond  of  each  bundle  a  small  piece  of  white  paper,  on  which  was 
written  in  each  case  the  name  of  decedent  and  an  abbreviated 
description  of  the  bonds  in  that  particular  bundle.  It  is  ad- 
mitted that  the  bonds  in  these  five  bundles  belonged  to  the 
decedent.  The  other  four  bundles  contained  the  bonds  in  con- 
troversy. 

"One  of  these  bundles  consisted  of  seventy  bonds  which  were 
held  together  by  one  or  more  rubber  bands.  On  the  top  of  the 
bonds,  but  under  a  rubber  band,  was  a  National  Park  Bank 
Safe  Deposit  Vault  manila  envelope.  On  this  was  written  in 
decedent's  hand  writing  the  words  'Nanine  L.  Pond.'  The 
envelope  itself  was  unsealed  and  contained  nothing.  Pinned 
to  the  envelope  was  a  piece  of  white  paper  on  which  was  written, 
but  not  in  decedent's  handwriting,  the  name  'Nanine  L. 
Pond,'  with  an  abbreviated  description  of  the  bonds.  The 
bundle  was  divided  into  six  sub-bundles,  one  for  each  kind  of 
bond,  the  bonds  of  each  kind  being  in  turn  held  together  by  a 


702  GIFT 

separate  rubber  band  and  having  a  smaller  National  Park 
Bank  Safe  Deposit  envelope  on  the  top  of  it.  The  words  '  Nan- 
ine  L.  Pond/  together  with  a  description  of  the  particular  kind 
of  bond,  were  written  on  each  envelope. 

"There  was  another  bundle  with  the  name  'Josephine  B. 
Lawrence'  written  in  the  handwriting  of  the  decedent  on  the 
large  manila  envelope,  and  containing  slips  of  paper  and  small 
envelopes  indorsed  similarly  to  those  in  the  Nanine  L.  Pond 
bundle.  This  bundle  contained  seventy  bonds.  There  was  also 
a  bundle  with  the  name  'Ethel  K.  Lawrence'  written  on  the 
large  manila  envelope  and  containing  six  bonds  of  the  par  value 
of  one  thousand  dollars  each.  There  was  another  bundle  having 
the  name  '  Edward  R.  True,  Jr., '  written  on  the  large  envelope 
and  containing  twenty  bonds. 

"These  bonds  were  all  coupon  bonds  and  transferable  by 
delivery.  They  were  kept  in  the  safe  deposit  vault  for  nearly 
one  year  after  the  death  of  decedent  and  the  interest  collected 
by  the  executors.  The  fact  of  their  being  in  the  safe  deposit 
box  which  was  rented  exclusively  by  the  decedent,  and  the  key 
to  which  was  kept  in  the  possession  of  the  decedent,  would 
necessarily  raise  a  presumption  that  the  bonds  and  other  prop- 
erty in  the  box  capable  of  being  transferred  by  delivery  belong 
to  the  decedent.  This  presumption  could  of  course  be  rebutted 
by  proof  that  the  bonds  were  delivered  to  the  decedent  for 
safe-keeping,  or  for  any  other  purpose  not  inconsistent  with  a 
claim  of  title  in  third  parties.  No  such  proof  was  adduced  before 
the  appraiser,  and  according  to  the  duly  authenticated  records 
of  the  Court  of  Probate  for  the  First  District  of  New  London, 
Connecticut,  no  such  proof  was  adduced  before  that  court. 
The  decedent  may  at  some  time  have  intended  to  give  these 
bonds  to  the  persons  whose  names  appeared  upon  the  envelopes 
in  the  different  bundles  or  he  may  have  intended  that  the  bonds 
should  go  to  them  upon  his  death.  If  the  decedent  had  intended 
to  make  a  gift  of  the  bonds  to  the  persons  whose  names  were 
written  by  him  on  the  envelopes,  but  had  riot  consummated  the 
gift  by  delivery,  the  bonds  were  the  property  of  decedent  at  the 
time  of  his  death  (Gegan  v.  Union  Trust  Co.,  129  App.  Div. 
184,  aff'd  198  N.  Y.  541). 

"  According  to  the  law  of  this  State  a  gift  will  not  be  presumed ; 
it  must  be  established  by  evidence  that  is  clear  and  convincing 
(Tompkins  v.  Leary,  134  App.  Div.  114;  Devlin  v.  Greenwich 
Bank,  125  N.  Y.  756).  It  therefore  appears  that  the  decedent 


GIFT  703 

did  not  make  a  valid  gift  inter  vivos  of  the  bonds  to  the  persons 
whose  names  appeared  upon  the  envelopes  attached  to  the 
respective  bundles.  There  is  no  evidence  whatever  that  the 
decedent  intended  that  the  bonds  should  become  the  property  of 
the  alleged  donees  at  the  time  of  his  death,  and  there  is  no 
evidence  to  sustain  the  finding  of  the  appraiser  that  the  bonds 
were  given  by  the  decedent  in  contemplation  of  death  or  as  a 
gift  intended  to  take  effect  at  or  after  his  death.  It  appears 
that  the  claimants  were  non-residents  of  this  State  at  the  time 
the  State  Comptroller  commenced  proceedings  to  determine  the 
transfer  tax  upon  the  estate  of  the  decedent,  and  that  he  was 
therefore  unable  to  compel  their  appearance  before  the  ap- 
praiser. As  they  were  the  only  parties  whose  knowledge  of  the 
transaction  constituting  the  alleged  gift  would  enable  the  ap- 
praiser to  properly  determine  whether  the  decedent  intended  to 
dispose  of  the  property  to  the  claimants  as  a  gift  intended  to 
take  effect  at  or  after  his  death,  it  was  incumbent  upon  them  to 
explain,  either  by  affidavit  or  testimony,  how  the  bonds  which 
they  claim  to  be  their  property  were  in  the  possession  of  the 
decedent  at  the  time  of  his  death.  In  the  absence  of  such  ex- 
planation to  rebut  the  presumption  of  ownership  in  the  decedent 
this  court  must  hold  that  for  the  purpose  of  determining  their 
liability  to  a  transfer  tax  in  this  State  the  bonds  were  the  prop- 
erty of  the  decedent  at  the  time  of  his  death.  The  order  fixing 
tax  will  be  reversed  and  the  appraiser's  report  remitted  to  him 
for  correction  as  herein  indicated." 

Another  portion  of  the  opinion  of  the  Lawrence  case  is  quoted, 
supra,  page  317. 

As  to  ownership  of  property  in  SAFE  DEPOSIT  Box  vide 
Matter  of  Francis,  N.  Y.  Law  Journal,  August  12,  1913,  supra, 
page  749. 

IN  MATTER  OF  LOEWI,  75  Misc.  57,  decedent  a  little  over  a 
year  before  his  death  told  his  son  that  he  was  getting  old  (he 
was  seventy-two)  and  would  like  to  give  his  children  something; 
that  his  son  should  go  to  his  safe  deposit  vault  and  take  out 
certain  bonds  and  mortgages  and  if  any  of  his  children  needed 
any  of  the  bonds  to  give  the  bonds  to  them.  There  was  no 
evidence  that  the  decedent  spoke  to  any  of  his  children,  except 
his  son,  about  the  alleged  gift.  The  interest  on  the  securities 
was  paid  to  decedent  up  to  the  time  of  his  death.  The  testa- 
tor's will  divided  his  property  equally  among  his  children. 
Held,  that  the  transfer  of  the  securities  was  taxable. 


704  GIFT 

GIFT  INTER  Vivos  held  under  the  circumstances  of  the  case 
to  be  made  in  contemplation  of  death,  and  therefore  taxable. 
Matter  of  Birdsall,  22  Misc.  180-193-197,  affirmed,  43  App. 
Div.  624. 

Vide  cases  cited  under  subdivision  8,  post,  page  705,  for  GIFTS 

HELD  NOT  TAXABLE. 

(7)  Report  remitted  for  additional  testimony 

In  Matter  of  John  Loster,  N.  Y.  Law  Journal,  July  29,  1913, 
the  appraiser  reported  that  the  sum  of  $20,000  was  given  by  the 
decedent  to  one  Christine  Cherry  as  a  gift  intended  to  take 
effect  after  death,  and  that  it  was  therefore  subject  to  the  pro- 
visions of  subdivision  4  of  §  220. 

Surrogate  Cohalan  remitted  the  report  of  the  appraiser  for 
additional  testimony,  saying:  "The  executor  contends  that  this 
sum  was  a  valid  indebtedness  of  the  decedent  to  Christine 
Cherry,  as  evidenced  by  the  following  memorandum:  'Sixty 
days  after  death  pay  to  the  order  of  Christine  Cherry  twenty 
thousand  dollars  at  44  Greenwich  St.,  N.  Y.  City.  Value 
received.  John  Loster.'  A  promissory  note  must  contain 
the  positive  engagement  of  the  maker  to  pay  at  a  certain  fixed 
or  determinable  future  time  (Carnwright  v.  Gray,  127  N.  Y. 
92).  A  note  or  engagement  on  the  part  of  the  debtor  to  pay  a 
certain  sum  at  a  certain  fixed  time  after  his  death  is  valid  as  a 
promissory  note  (Hegeman  v.  Moon,  131  N.  Y.  462;  Root  v. 
Strang,  77  Hun,  14).  If  the  instrument  above  quoted  were  a 
promissory  note,  the  fact  that  it  was  payable  sixty  days  after 
the  death  of  the  maker  would  not  affect  its  validity.  But  it  is 
not  a  promissory  note,  because  it  does  not  contain  the  uncondi- 
tional promise  of  the  maker  to  pay  the  amount  therein  men- 
tioned (sec.  320,  Negotiable  Instruments  Law).  John  Loster 
does  not  by  the  instrument  above  quoted  promise  to  pay  to 
Christine  Cherry  $20,000,  or  any  other  sum,  nor  does  he  direct 
his  executor  or  administrator  to  make  the  payment. 

"While  he  may  have  intended  that  his  executor  should  pay 
Christine  Cherry  the  sum  of  $20,000,  he  did  not  make  such  a 
direction  in  the  instrument  referred  to,  and  this  court  cannot 
supply  the  omission.  The  memorandum  therefore  is  not  a 
promissory  note.  Neither  is  it  an  acknowledgment  of  in- 
debtedness, because  it  does  not  allege  that  the  decedent  was 
indebted  to  Christine  Cherry  in  the  sum  of  $20,000,  or  any 
other  sum.  From  the  testimony  taken  before  the  appraiser  it 


GIFT  705 

appears  that  Christine  Cherry  was  employed  by  the  decedent 
for  many  years  in  connection  with  the  conduct  of  his  business, 
and  that  at  the  time  he  delivered  to  her  the  memorandum  above 
referred  to  he  stated  that  because  of  the  assistance  she  had 
rendered  to  him  and  the  faithful  services  which  she  had  per- 
formed 'she  ought  to  receive  a  greater  amount  or  part  of  my 
estate,  because  there  is  no  one  that  I  care  particularly  to  leave 
it  to.' 

"If  she  had  rendered  services  which  in  the  opinion  of  the 
decedent  were  worth  $20,000,  the  payment  to  her  of  that  sum 
would  be  in  satisfaction  of  her  claim  for  such  services  and  would 
not  be  subject  to  a  tax.  If,  on  the  other  hand,  it  was  paid  to 
her  not  in  satisfaction  of  a  valid,  enforcible  claim  against  the 
decedent,  but  as  a  gift  intended  to  take  effect  after  death,  it 
would  be  subject  to  a  tax. 

"The  testimony  taken  before  the  appraiser  does  not  show 
that  the  decedent  gave  Christine  Cherry  the  sum  of  $20,000  as  a 
gift  intended  to  take  effect  after  his  death.  Neither  does  it 
show  that  that  sum  was  given  by  the  decedent  in  satisfaction  of 
a  valid  indebtedness  existing  against  the  decedent  and  in  favor 
of  Christine  Cherry.  It  will  therefore  be  necessary  to  remit  the 
appraiser's  report  to  him  for  the  purpose  of  taking  additional 
testimony  on  this  point." 

(8)  Gifts  held  not  taxable 

A  conveyance  and  agreement  by  which  absolute  title  and 
immediate  possession  passed  to  grantee,  with  no  power  of  revo- 
cation reserved  to  grantor,  subject  to  the  maintenance  of 
grantor  and  wife,  held  not  taxable.  Matter  of  Hess,  110  App. 
Div.  474,  affirmed,  on  opinion  below,  187  N.  Y.  554,  supra, 
page  340. 

Decedent  three  years  prior  to  death  transferred  and  delivered 
to  his  daughter  and  two  grandsons  certain  stock,  but  said  stock 
still  continued  in  name  of  donor  on  the  books  of  the  corporation 
and  the  dividends  were  paid  to  him.  No  express  contract  was 
shown  to  support  a  trust  or  reservation.  Nothing  was  said  on 
the  subject  between  the  donor  and  the  donees.  It  was  not 
shown  that  there  was  bad  faith,  or  that  the  gifts  were  made 
with  the  intent  of  evading  the  tax.  Held,  not  taxable.  Matter 
of  Bullard,  76  App.  Div.  207. 

Vide  Matter  of  Edgerton,  35  App.  Div.  125,  affirmed,  without 

45 


706 


GIFT  TO   A   CLASS 


opinion,  158  N.  Y.  671,  supra,  page  227;  Matter  of  Thorne,  162 
N.  Y.  238,  supra,  page  236. 

AN  OLD  MAN,  SOMEWHAT  ENFEEBLED,  made  gifts  of 
$1,500,000  which  were  held  not  taxable  as  there  was  nothing  in 
the  evidence  "to  indicate  to  the  decedent  at  the  time  the  gifts  in 
question  were  made  that  he  was  in  immediate  danger  of  death." 
Matter  of  Spaulding,  49  App.  Div.  541-547,  affirmed  on  opinion 
below,  163  N.  Y.  607.  Vide  Contemplation  of  Death. 

GIFT  TO  A  CLASS 

Vide  Matter  of  Hogg,  156  App.  Div.  301. 


GOOD-WILL 

(1)  Principle    involved   is    akin 

to  that  of  Closely  Held 
Stock. 

(2)  Defined. 

(3)  Good-will  is  subject  to  tax. 

(4)  Each  case  must  be  consid- 

ered and  determined  in 
the  light  of  the  facts  sur- 
rounding and  connected 
with  it. 

(5)  The  general  rule  for  valua- 

tion. 

Von  Au  r.  Magenheimer. 
Matter  of  Silkman. 

"      "  Keahon. 

"      "  Rosenberg. 


Matter  of  Weatherbee. 
"       "  Klauber. 

(6)  Elimination      of      decedent 

from  business  may  be 
taken  into  consideration. 
Personality  of  decedent. 

(7)  Basis  of  valuation  should  be 

the  profits  prior  to  death. 

(8)  Firm  name. 

(9)  Where     partnership     agree- 

ment provides  method  of 
determining  value  of  good- 
will. 

(10)  When    decedent's    interest 

in  good-will  passes  to 
surviving  partners. 


(1)  Principle  involved  is  akin  to  that  of  Closely  Held  Stock 

The  subject  of  the  good-will  of  a  business  is  interwoven  in 
principle  with  the  adjudications  of  the  courts  relative  to  the 
valuation  of  securities  not  customarily  bought  and  sold  in  the 
open  market.  Surrogate  Varnum  held  in  MATTER  OF  GEORGE 
JONES,  28  Misc.  356-358,  that  in  the  valuation  of  the  stock  of 
the  New  York  Times,  a  joint-stock  association,  there  should  be 
included  "the  appraisal  of  the  estimated  value  of  the  good-will " 
of  the  NEW  YORK  TIMES.  The  Appellate  Division  in  passing 
upon  this  phase  of  the  surrogate's  order  said,  69  App.  Div. 
237-244:  "We  agree,  however,  with  the  surrogate  that  the  value 
of  the  good-will  of  this  association  in  the  Times  newspaper  was 
property  which  passed  under  the  will  of  the  testator  and  was 
taxable.  The  association,  as  before  stated,  was  organized  to 


GOOD-WILL  707 

conduct  and  publish  a  newspaper  called  'The  New  York  Times.' 
That  paper  had  been  published  for  many  years  in  New  York 
and  had  become  a  valuable  property.  It  belonged  to  the 
association.  It  went  to  make  up  the  property  of  the  joint-stock 
association  and  was  transferrable  as  such." 

The  Court  of  Appeals  reversed  the  Appellate  Division  on 
other  points  in  the  case,  but  sustained  both  the  Appellate 
Division  and  the  surrogate  regarding  the  good-will,  the  court 
saying  (172  N.  Y.  575-586)  in  affirming  the  order  of  the  surro- 
gate: "These  shares  were  not  listed  upon  the  Stock  Exchange  or 
sold  in  the  open  market,  and  the  only  way  to  get  at  their  value 
was  to  ascertain  the  property  they  represented."  Vide  Matter 
of  Pulitzer,  N.  Y.  Law  Journal,  December  10,  1912,  supra, 
page  624. 

IN  MATTER  OF  BRANDRETH,  28  Misc.  468—473,  there  was 
involved  the  valuation  of  the  stock  of  the  Porous  Plaster  Com- 
pany, a  corporation  whose  stock  was  not  dealt  in.  The  ap- 
praiser fixed  the  value  of  the  shares  by  taking  in  consideration 
the  good-will  of  the  business  and  Surrogate  Silkman  upheld  him 
in  so  doing,  the  surrogate  being  affirmed  in  159  N.  Y.  437-443. 
Vide  Matter  of  Valentine,  N.  Y.  Law  Journal,  March  13,  1913, 
supra,  page  619. 

It  is  apparent,  therefore,  that  the  cases  regarding  the  valua- 
tion of  good-will  should  be  read  in  connection  with  the  cases 
discussed  sub  Closely  Held  Stock,  supra,  page  612. 

(2)  Defined 

"Good-will,"  said  Justice  STORY,  "may  be  properly  enough 
described  to  be  the  advantage  or  benefit  which  is  acquired  by  an 
establishment  beyond  the  mere  value  of  the  capital,  stock, 
funds  or  property  employed  therein,  in  consequence  of  the 
genetal  public  patronage  and  encouragement,  which  it  receives 
from  constant  or  habitual  customers,  on  account  of  its  local 
position  or  common  celebrity  or  reputation  for  skill,  or  influence, 
or  punctuality,  or  from  other  accidental  circumstances  or 
necessities,  or  even  from  ancient  partialities  or  prejudices." 
Boon  v.  Moss,  70  N.  Y.  465-473. 

IN  AUSTEN  v.  BOYS,  27  L.  J.  Ch.  714,  Lord  CRANWORTH 
said:  "  *  *  *  When  a  trade  is  established  in  a  particular 
place,  the  goodwill  of  that  trade  means  nothing  more  than  the 
sum  of  money  which  any  person  would  be  willing  to  give  for  the 
chance  of  being  able  to  keep  the  trade  connected  with  the  place 


708  GOOD-WILL 

where  it  has  been  carried  on.  It  was  truly  said  in  argument 
that  goodwill  is  something  distinct  from  the  profits  of  a  business, 
although,  in  determining  its  value,  the  profits  are  necessarily 
taken  into  account,  and  it  is  usually  estimated  at  so  many  years' 
purchase  upon  the  amount  of  those  profits." 

"Good  will  embraces  at  least  two  elements,"  said  Justice 
VANN,  "the  advantage  of  continuing  an  established  business  in 
its  old  place,  and  of  continuing  it  under  the  old  style  or  name. 
While  it  is  not  necessarily  altogether  local,  it  is  usually  to  a 
great  extent,  and  must,  of  necessity,  be  an  incident  to  a  place, 
an  established  business  or  a  name  known  to  the  trade."  People 
v.  Roberts,  159  N.  Y.  70-83. 

"Lord  ELDON'S  famous  definition,  'the  probability  that  the 
old  customers  will  resort  to  the  old  place,'  is  not  so  literal  as  to 
mean  that  the  customers  must  actually  come  to  the  old  place, 
but  simply  that  old  customers  will  continue."  Matter  of  Silk- 
man,  121  App.  Div.  202-216. 

(3)  Good-will  is  subject  to  tax 

Vide  digest  of  Matter  of  Vivanti,  206  N.  Y.  656,  supra, 
page  387. 

The  good-will  of  R.  G.  DUN  was  held  by  Surrogate  Thomas  in 
Matter  of  Dun,  39  Misc.  616,  not  to  be  subject  to  the  transfer 
tax.  He  reversed  his  previous  ruling,  however,  in  Matter  of 
Dun,  40  Misc.  509,  upon  the  ground  that  the  Court  of  Appeals 
in  Matter  of  Hellman,  174  N.  Y.  254,  supra,  page  276,  had  held 
that  the  definition  of  property  whose  transfer  was  subject  to  the 
transfer  tax  was  contained  in  the  then  §  242,  now  the  first  sen- 
tence of  §  243,  supra,  page  30. 

In  his  second  opinion  the  surrogate  said  at  page  510  of  40 
Misc. :  "  The  good-will  of  the  business  of  the  decedent  is  a  right, 
exclusive  in  him  and  hi  those  to  whom  he  has  given  it  by  his 
will,  to  continue  that  business  under  the  name  used  by  him. 
It  is  clearly  a  thing  capable  of  being  the  subject  of  ownership, 
and  it  is  stipulated  to  have  a  large  value.  It  is,  therefore,  prop- 
erty and  its  value  was  properly  included  in  the  appraisal." 

Surrogate  Beckett,  in  Matter  of  Keahon,  60  Misc.  508,  said: 

"As  the  business  under  consideration  was  conducted  and  car- 
ried on  by  the  administratrix  in  decedent's  name  the  good-will  of 
the  business  is  in  fact  an  asset  in  her  hands  (Matter  of  Mullon, 
74  Hun,  358),  and  as  such  it  is  taxable."  Matter  of  Keahon,  60 
Misc.  508. 


GOOD-WILL  709 

(4)  Each  case  must  be  considered  and  determined  in  the 
light  of  the  facts  surrounding  and  connected  with  it 

"The  precise  value  may  be  difficult  of  ascertainment  in  any 
way  short  of  actual  sale."  MATTER  OF  VIVANTI,  supra,  page  388. 

"The  industry  of  counsel,"  said  Justice  Rich,  "has  not  re- 
sulted in  the  citation  of  any  case  in  this  country  in  which  a 
specific  rule  for  the  determination  of  the  value  of  good  will  is 
declared;  no  rigid  and  unvarying  rule  can  be  laid  down  by  the 
courts  in  this  class  of  cases.  Each  must  be  considered  and  de- 
termined in  the  light  of  the  facts  surrounding  and  connected 
with  it.  Within  proper  limits  THE  DETERMINATION  OF  SUCH 
QUESTION  MUST  BE  LEFT  TO  THE  JURY,  but  their  conclusion  must 
rest  upon  evidence  legitimately  tending  to  establish  value  and 
supporting  their  verdict.  *  *  *  It  cannot  be  determined  by 
courts  as  a  question  of  law."  VON  Au  v.  MAGENHEIMER,  115 
App.  Div.  84-86;  Matter  of  Silkman,  121  id.  202-218. 

(5)  The  general  rule  for  valuation 

"Our  courts  have  not  adopted  the  rigid  rule,  established  by 
the  English  courts,  of  limiting  the  value  of  good  will  to  one 
year's  purchase  of  the  net  annual  profits  of  the  business  cal- 
culated on  an  average  of  three  years  (Mellersh  v.  Keen,  28 
Beav.  453)  or  that  three  years'  net  profits  of  a  business  arbi- 
trarily represents  the  value  of  its  good  will  (Page  v.  Ratliffe, 
75  L.  T.  Rep.  371),  but  on  the  contrary  incline  to  the  more 
equitable  rule  that  THE  VALUE  OF  GOOD  WILL  MAY  BE  FAIRLY 

ARRIVED  AT  BY  MULTIPLYING  THE  AVERAGE  NET  PROFITS  BY  A 

NUMBER  OF  YEARS,  such  number  being  suitable  and  proper,  hav- 
ing reference  to  the  nature  and  character  of  the  particular  busi- 
ness under  consideration,  and  the  determination  of  such  proper 
number  of  years  should  be  submitted  to  and  determined  by  the 
jury  as  a  question  of  fact,  dependent  upon  the  evidence  before 
them  in  each  action."  VON  Au  v.  MAGENHEIMER,  115  App. 
Div.  84-87;  Matter  of  Silkman,  121  id.  202-218. 

At  the  first  trial  of  the  case  of  VON  Au  v.  MAGENHEIMER, 
supra,  the  jury  found  the  good  will  of  the  business  of  Mason, 
Au  &  Magenheimer  Confectionery  Company  to  be  thirteen 
times  the  average  annual  net  profits.  The  Appellate  Division 
(115  App.  Div.  84)  reversed  the  judgment  upon  the  ground  that 
the  verdict  was  excessive  and  granted  a  new  trial. 

Upon  the  second  trial  the  jury  found  that  the  good  will  was 
worth  approximately  six  times  the  average  annual  net  profits. 


710  GOOD-WILL 

The  Appellate  Division  (126  App.  Div.  257)  affirmed  the  judg- 
ment, Justice  Miller  saying,  page  270:  "In  view  of  all  the  sur- 
rounding circumstances  I  do  not  think  the  verdict  was  exces- 
sive." 

In  MATTER  OF  SILKMAN,  121  App.  Div.  202,  it  was  held  that 
two  years'  purchase  of  the  average  annual  profits  for  the  preced- 
ing three  years  was  the  proper  value  of  the  good  will  of  Thurston 
&  Braidich,  a  firm  engaged  in  the  business  of  "  the  import  and 
retail  of  vanilla  beans,  gums  and  merchandise." 

In  MATTER  OF  KEAHON,  60  Misc.  508,  Surrogate  Beckett 
held:  "In  ascertaining  the  value  of  good  will  it  is  necessary  to 
determine  the  amount  of  capital  employed  in  the  business. 
The  appraiser  finds,  from  the  affidavit  submitted  to  him  by  the 
administratrix,  that  the  gross  value  of  the  assets  of  the  business 
was  $43,610.02.  Among  the  liabilities  is  an  item  of  $26,500, 
notes  due  the  Gansevoort  Bank,  but  as  the  decedent  had  large 
holdings  of  real  estate,  and  there  is  no  evidence  to  show  that  he 
borrowed  this  money  to  be  used  in  the  TRUCKING  BUSINESS,  it 
cannot  be  considered  a  liability  of  the  business.  Excluding  this 
item,  the  liabilities  amount  to  $12,950.44.  Deducting  said 
amount  from  the  total  assets  leaves  a  net  capital  of  $30,659.58. 
The  evidence  before  the  appraiser  shows  that  for  the  years 
1905  and  1906  the  average  net  annual  profits  were  $26,679. 
Deducting  from  this  $5,000,  as  salary  of  the  decedent  for  manag- 
ing the  business,  leaves  $21,679,  and  subtracting  from  this  the 
interest  on  the  capital,  namely  $1,839.57,  leaves  an  annual  net 
profit  of  $19,839.43. 

"While  the  courts  in  this  country  have  not  adopted  any 
inflexible  rule  for  ascertaining  the  value  of  the  good  will  based 
on  earnings,  the  Appellate  Division  in  VON  Au  v.  MAGEN- 
HEIMER,  115  App.  Div.  84,  suggested  that  the  proper  rule 
would  be  to  multiply  the  net  earnings  by  a  certain  number  of 
years,  the  number  depending  upon  the  nature  of  the  business. 
In  the  second  trial  of  that  case  the  jury  found  the  value  of  the 
good  will  to  be  approximately  six  times  the  average  annual 
net  earnings,  and  the  court  refused  to  set  the  verdict  aside  as 
excessive.  VON  Au  v.  MAGENHEIMER,  126  App.  Div.  257. 

"In  MATTER  OF  ROSENBERG,  Sun*.  Dec.  1908,  p.  265,  Surro- 
gate Thomas  computed  the  value  of  the  good-will  at  twice  the 
amount  of  the  annual  net  profits,  but  in  that  matter  the  business 
was  conducted  by  decedent  under  a  monthly  lease,  so  that  it 
lacked  permanence  and  stability. 


GOOD-WILL  711 

"In  the  matter  before  us  the  business  was  conducted  by  de- 
cedent for  a  period  of  about  fifteen  years;  the  amount  of  busi- 
ness done  and  the  generally  high  commercial  standing  of  its 
customers  would  indicate  that  it  was  well  and  favorably^  known, 
and  the  fact  that  the  net  profit  upon  a  comparatively  small 
capital  was  about  $26,000  per  annum  would  suggest  that  it  was 
decidedly  profitable.  As  it  was  not  a  business  that  depended 
upon  any  special  qualifications  in  the  decedent,  the  good-will 
must  necessarily  be  valuable.  I  have  concluded  that  a  con- 
servative estimate  of  the  value  of  the  good-will  would  be  three 
times  the  annual  net  profits  or  $59,518.29.  The  order  fixing 
tax  should  be  reversed  and  report  remitted  to  appraiser,  so 
that  he  may  reduce  the  value  of  the  good  will  from  $100,000 
to  $59,518.29." 

In  MATTER  OF  EDWIN  H.  WEATHERBEE,  N.  Y.  Law  Journal, 
November  5,  1913,  there  were  cross  appeals,  under  the  provi- 
sions of  the  first  sentence  of  §  232,  supra,  page  20,  from  the  order 
of  the  surrogate  entered  under  the  provisions  of  the  first  sen- 
tence of  §  231,  supra,  page  19.  The  executors  were  dissatisfied 
upon  the  ground  that  the  valuation  of  the  good  will  was  exces- 
sive, and  the  state  comptroller  upon  the  ground  that  it  was  insuf- 
ficient. Surrogate  Cohalan  held:  "The  decedent  was  the  owner 
of  the  dry  goods  business  conducted  at  Broadway,  Fifth  avenue 
and  Nineteenth  street,  in  the  Borough  of  Manhattan,  under  the 
name  of  ARNOLD,  CONSTABLE  &  Co.  The  evidence  adduced  be- 
fore the  appraiser  shows  that  the  average  annual  net  profits  of 
the  business,  exclusive  of  the  interest  on  capital,  was  $15,733.28. 
The  appraiser  added  $10,000  to  this  amount  and  then  multiplied 
the  sum  by  five,  the  result  being  his  estimate  of  the  value  of  the 
good  will.  As  the  $10,000  added  to  the  average  annual  profits 
was  the  interest  on  capital  invested  in  the  business  by  the 
representatives  of  retired  partners,  it  did  not  constitute  any 
part  of  the  net  profits  and  should  not  have  been  included  as 
such  in  ascertaining  the  value  of  the  good  will. 

"  The  business  has  been  conducted  under  the  name  of  Arnold, 
Constable  &  Co.  for  more  than  thirty  years;  it  transacts  a  large 
volume  of  business;  it  has  an  established  reputation  in  the  dry 
goods  trade;  its  principal  place  of  business  is  located  in  a  prom- 
inent part  of  the  city,  and  it  is  favorably  known  to  the  residents 
of  this  city  as  well  as  to  those  of  suburban  towns.  It  enjoys  the 
advantages  derived  from  extensive  advertising,  a  prominent 
and  conspicuous  location  and  a  long  course  of  successful  busi- 


712  GOOD-WILL 

ness  dealings.  Its  good  will,  therefore,  is  relatively  much  more 
valuable  than  that  of  a  business  conducted  in  an  obscure  loca- 
tion and  necessarily  catering  to  a  limited  number  of  customers. 
I  am  inclined  to  think  that  a  conservative  estimate  of  the  value 
of  the  good  will  would  be  a  sum  which  at  TEN  PER  CENT,  interest 
per  annum  would  produce  the  amount  found  by  the  appraiser  to 
be  the  net  average  annual  profits,  exclusive  of  interest  on  capital. 
This  would  make  the  value  of  the  good  will  $157,332.80." 

In  MATTER  OF  DAVID  KLAUBER,  N.  Y.  Law  Journal,  May  17, 
1913,  Surrogate  Fowler  held  that  "as  the  good  will  of  the  busi- 
ness of  Klauber,  Horn  &  Co.  was  not  purchased  by  the  firm  of 
Klauber  Bros.  &  Co.,  the  profits  of  the  former  should  not  be 
taken  into  consideration  in  appraising  the  value  of  the  good 
will  of  the  latter.  Klauber  Bros.  &  Co.  not  having  made  any 
profits  in  the  conduct  of  its  business  from  the  tune  of  its  forma- 
tion until  the  date  of  decedent's  death,  its  good  will  had  no 
monetary  value  at  that  time.  The  order  fixing  tax  will  be  modi- 
fied in  accordance  with  this  decision  and  the  terms  of  the 
stipulation  heretofore  filed."  Appeal  pending. 

Vide  etiam  Matter  of  Case,  122  App.  Div.  343. 

(6)  Elimination  of  decedent  from  business  may  be  taken  into 
consideration 

If  the  decedent  has  oeen  a  dominating  or  important  factor  in 
the  business,  that  fact  must  be  taken  into  consideration  in  the 
valuation  of  the  good-will.  Matter  of  Bach,  N.  Y.  Law  Journal, 
November  21,  1911,  opinion  quoted,  supra,  page  617;  Matter 
of  Rees,  208  N.  Y.  590,  digested,  supra,  page  392. 

That  it  is  a  very  difficult  matter  to  arrive  at  any  reliable  esti- 
mate of  what  allowance  should  be  made,  is  very  succinctly  ex- 
pressed in  the  English  work  on  "Good  Will  and  its  Treatment 
in  Accounts"  (1897),  by  Lawrence  R.  Dicksee,  F.  C.  A.  Mr. 
Dicksee  viewed  the  problem  from  the  standpoint  of  an  account- 
ant dealing  with  the  proper  provision  to  be  made  for  the  cost 
of  management,  but  his  remarks  have  a  bearing,  nevertheless, 
upon  the  subject  under  discussion.  He  says  at  page  7:  "There 
is,  however,  a  further  fact  to  be  taken  into  consideration,  and 
that  is  that  a  business  which  requires  its  proprietor  to  expend 
in  its  management  a  considerable  amount  of  time  and  skill  is 
less  valuable  than  one  which  will  produce  an  equal  income  with- 
out any  such  expenditure.  It  is  less  valuable  because,  unques- 
tionably, it  will  be  found  that  in  the  open  market  it  would 


GOOD-WILL  713 

realise  less  money,  but  in  addition  to  that  (as  a  matter  which 
would  have  to  be  taken  into  consideration  in  any  disinterested 
valuation),  it  is  important  to  remember  that,  when  a  man  pays 
for  good  will,  he  pays  for  something  which  places  him  in  the 
position  of  being  able  to  earn  more  money  than  he  would  be 
able  to  do  by  his  own  unaided  exertions.  To  take  an  extreme 
case,  for  instance,  no  man  who  places  any  value  upon  his  time 
would  pay  anything  for  an  undertaking,  which,  after  providing 
5  per  cent,  interest  on  its  capital,  did  not  show  a  further  profit 
in  excess  of  the  amount  which  the  purchaser  might  be  sure  of 
earning  anywhere  else,  without  any  outlay  whatever. 

"In  order,  therefore,  to  arrive  at  a  real  basis  by  which  the 
value  of  one  business  can  be  compared  with  that  of  another, 
provision  must  be  made,  not  only  for  interest  on  the  capital 
employed,  but  also  for  the  value  of  such  services  as  have  been 
rendered  to  that  business  by  its  proprietor,  and  not  already  been 
charged  against  profits.  In  the  case  of  a  business  under  man- 
agement, where  the  proprietors  do  no  work,  no  such  reduction 
need,  of  course,  be  made;  but  where  the  proprietors  have  to 
exercise  a  certain  amount  of  supervision,  it  is  necessary,  in 
order  to  arrive  at  a  real  basis  of  comparison,  to  deduct  from 
the  profits,  in  addition  to  interest,  a  sum  which  (as  near  as  may 
be  calculated)  would  represent  the  amount  which  the  proprietor 
would  have  to  pay  a  manager  to  do  his  work." 

THE  PERSONALITY  of  decedent  may  very  well  have  contrib- 
uted to  produce  the  result  of  a  profitable  business,  and  thus 
would  become  an  element  to  be  reckoned  with,  in  addition  to 
that  of  the  mere  cost  of  management. 

What  the  individuality  of  the  decedent  may  have  meant  in 
dollars  and  cents  to  the  business  is,  of  course,  a  quantity  vary- 
ing with  the  circumstances  of  almost  every  case.  If  the  prac- 
titioner deems  it  to  have  been  an  essential  part  of  the  profit 
producing  power  of  decedent's  business,  he  should  be  careful 
to  place  in  the  record  taken  before  the  appraiser  a  complete 
statements  of  facts  pertinent  to  the  enquiry. 

(7)  Basis  of  valuation  should  be  the  profits  prior  to  death 

In  MATTER  OF  SILKMAN,  121  App.  Div.  202,  Justice  Jenks,  at 
page  218,  said:  "But  I  do  not  think  that  the  valuation  of  the 
good  will  made  by  the  decree  should  stand.  The  learned  sur- 
rogate wrote  in  his  opinion  that  in  the  case  at  bar  two  years' 
purchase  on  the  amount  of  the  profits  was  as  little  as  should  be 


714  GOOD-WILL 

allowed,  and  that  he  was  by  no  means  clear  that  the  allowance 
should  not  be  more  liberal.  He  took  the  average  annual  profits 
for  three  years  succeeding  the  death  of  Mr.  Braidich,  and  cal- 
culated fifty  per  cent  of  the  annual  profits  for  two  years.  I 
think  that  while  the  process  may  be  approved,  the  basis  should 
be  the  annual  profits  before  the  death  of  the  testator." 

Apparently  it  is  not  error  to  allow  the  introduction  in  evi- 
dence of  balance  sheets  of  subsequent  years,  they  being  "ad- 
missible for  the  purpose  of  comparison."  Von  Au  v.  Magen- 
heimer,  126  App.  Div.  257-270.  Vide  etiam  Matter  of  Pulitzer, 
supra,  page  624. 

(8)  Firm  name 

In  SLATER  v.  SLATER,  175  N.  Y.  143,  the  court  discussed 
§§20  and  21  of  the  Partnership  Law,  and  held,  page  150: 
"  1st.  On  the  facts  of  this  case  the  right  to  continue  the  use  of 
the  firm  name  is  a  firm  asset  and  does  not  inure  to  the  benefit  of 
the  surviving  partner.  2nd.  The  purchaser  at  the  sale  provided 
for  in  the  decree,  whether  surviving  partner  or  otherwise,  will 
acquire  the  right  to  continue  the  business  under  the  firm  name 
upon  complying  with  the  provisions  of  the  statute." 

(9)  Where  partnership  agreement  provides  method  of  deter- 
mining value  of  good  will 

Vide  digest  of  Matter  of  Vivanti,  206  N.  Y.  656,  supra, 
page  387. 

(10)  When  decedent's  interest  in  good  will  of  partnership 
passes  to  surviving  partners 

In  MATTER  OF  GEORGE  FREDERICK  VIETOR,  N.  Y.  Law  Jour- 
nal, May  8,  1913,  Surrogate  Fowler  held:  "The  decedent  died 
January  29,  1910,  a  resident  of  the  County  of  New  York.  At 
the  time  of  his  death  he  was  a  member  of  the  firm  of  Frederick 
Victor  &  Achelis,  a  copartnership  having  its  principal  place  of 
business  in  the  City  of  New  York.  The  transfer  tax  appraiser 
found  that  the  decedent  had  no  taxable  interest  in  the  good  will 
of  the  business  conducted  by  the  said  firm,  and  from  the  order 
entered  upon  his  report  the  State  Comptroller  has  taken  this 
appeal. 

"THE  GOOD  WILL  OF  A  BUSINESS  IS  AN  ASSET  OF  THE  ESTATE 
OF  A  DECEASED  PARTNER  IN  THE  HANDS  OF  HIS  EXECUTORS,  AND 

AS  SUCH  ITS  TRANSFER  is  SUBJECT  TO  A  TAX  (Matter  of  Vivanti, 
138  App.  Div.  281;  Von  Au  v.  Magenheimer,  126  App.  Div. 


GOOD-WILL  715 

257).  As  the  firm  of  Frederick  Victor  &  Achelis  was  formed  in 
1841,  and  continued  to  transact  the  same  general  line  of  business 
from  the  time  of  its  establishment  until  the  time  of  decedent's 
death,  and  realized  large  profits  from  the  conduct  of  its  busi- 
ness, its  good  will  constitutes  a  valuable  asset  (Johnson  v. 
Roberts,  159  N.  Y.  83). 

"Unless  the  decedent's  interest  in  this  good  will  passed  to  the 
surviving  partners  by  virtue  of  a  contract  or  agreement  entered 
into  between  the  partners  themselves,  it  should  be  included  in 
the  taxable  assets  of  his  estate.  From  the  evidence  adduced 
before  the  appraiser  it  appears  that  at  the  time  of  the  formation 
of  the  partnership  in  1841  no  written  articles  of  copartnership 
were  entered  into.  In  1903  the  first  written  copartnership  agree- 
ment was  executed.  This  agreement  provided  that  the  partner- 
ship was  to  continue  on  the  same  terms  as  had  regulated  the 
conduct  of  the  business  and  the  respective  rights  and  duties 
of  the  partners  during  the  preceding  years,  except  as  therein 
modified.  As  the  prior  partnership  agreement  was  not  hi  writ- 
ing, and  the  agreement  of  1903  did  not  purport  to  be  in  itself  a 
complete  recital  of  the  rights,  interests  and  liabilities  of  the 
partners,  but  merely  a  modification  of  the  prior  oral  agreement, 
parol  evidence  was  admissible  before  the  appraiser  to  show  the 
terms  of  that  agreement.  From  the  evidence  so  adduced  it 
appears  that  at  the  time  of  the  death  of  one  of  the  original 
members  of  the  firm  his  interest  in  the  business  was  ascertained 
as  between  the  executors  and  the  surviving  partners  to  be  the 
amount  placed  to  his  credit  upon  the  private  ledger  of  the  com- 
pany at  the  first  semi-annual  accounting  which  took  place  after 
his  death.  Nothing  was  included  as  assets  of  the  partnership  ex- 
cept what  was  treated  as  assets  at  the  annual  accounting  be- 
tween the  partners,  namely,  merchandise,  moneys  and  securities. 
Upon  the  death  of  the  other  original  member  of  the  firm  his  in- 
terest in  the  partnership  was  determined  and  adjusted  in  the 
same  manner.  In  neither  case  was  the  good  will  of  the  business 
taken  into  consideration  as  an  asset  of  the  firm.  On  the  retire- 
ment of  Fritz  Achelis,  another  member  of  the  firm,  his  interest 
in  the  partnership  was  determined  and  adjusted  in  the  same 
manner  as  the  interests  of  the  original  partners,  no  account  being 
taken  of  the  value  of  the  good  will  of  the  business. 

"On  November  9,  1906,  supplementary  articles  of  copartner- 
ship were  executed,  by  which  it  was  provided  that  the  legal 
representatives  of  a  deceased  partner  should  be  entitled  to  re- 


716  GRADED   RATES   OF  TAX 

•  ceive  at  the  next  semi-annual  accounting  after  such  partner's 
death  the  same  share  of  the  profits  which  said  deceased  partner 
would  be  entitled  to  if  living,  and  after  that  accounting  his  in- 
terest, as  so  ascertained,  should  not  be  entitled  to  any  more 
profits  or  liable  for  any  losses.  Carl  L.  Victor,  one  of  the  part- 
ners of  the  firm  since  1871,  and  who  was  a  member  of  the  firm 
prior  to  the  death  of  the  original  members,  deposed  that  it  was 
the  intent  and  meaning  of  the  partnership  agreement  that  a  de- 
ceased or  retiring  partner  was  only  to  receive  such  part  of  the 
assets  of  the  firm  as  he  was  entitled  to  under  the  semi-annual 
statement  or  accounting,  and  that  the  good  will  was  to  belong 
exclusively  to  the  surviving  partners  thereafter  continuing  the 
business.  It  would  therefore  appear  that  by  the  IMPLIED  AGREE- 
MENT of  the  parties,  as  evidenced  by  their  conduct  on  every 
occasion  when  it  became  necessary  to  ascertain  the  value  of  the 
interest  of  a  deceased  or  retiring  partner,  the  good  will  of  the 
business  was  to  belong  exclusively  to  the  surviving  partners, 
and  that  the  executors  of  a  deceased  partner  had  no  right  thereto 
or  interest  therein.  That  partners  have  the  right  to  make  such 
an  agreement  between  themselves  is  recognized  by  the  courts  of 
this  State  (Slater  v.  Slater,  175  N.  Y.  148).  Therefore,  as  the 
decedent's  interest  in  the  good  will  of  the  firm  of  Frederick 
Victor  &  Achelis  did  not  constitute  any  part  of  his  estate,  and 
did  not  pass  to  his  executors,  the  appraiser  was  correct  in  refus- 
ing to  include  it  in  the  taxable  assets  of  decedent's  estate. 

"But  the  comptroller  contends  that  if  the  decedent's  interest 
in  the  good  will  of  the  business  did  not  pass  to  his  executors,  it 
must  have  passed  to  the  surviving  partners  as  a  gift  intended  to 
take  effect  at  or  after  death.  If  it  were  such  a  gift  it  would  be 
subject  to  a  tax  (Matter  of  Palmer,  117  App.  Div.  360).  But 
the  evidence  shows  that  it  was  not  a  gift  from  the  decedent  to 
the  surviving  partners,  but  a  right  which  accrued  to  them  by 
virtue  of  the  contract  or  agreement  of  copartnership.  Such  a 
right  or  interest  is  not  subject  to  the  provisions  of  the  Transfer 
Tax  Law  (Matter  of  Hess,  110  App.  Div.  476,  aff'd  187  N.  V. 
554;  Matter  of  Baker,  83  App.  Div.  530,  aff'd  178  N.  Y.  575). 
The  appeal  of  the  State  Comptroller  must  therefore  be  over- 
ruled." 

GRADED  RATES  OF  TAX 

Vide  Matter  of  Schwarz,  209  N.  Y.  mem.,  supra,  page  3CD. 
For  tables  and  discussion  vide  page  45. 


HUMANE    SOCIETIES  717 

For  graded  rates  of  tax  under  Laws  of  1910,  chap.  706,  in 
effect  July  11,  1910,  repealed  by  Laws  1911,  chap.  732,  in  effect 
July  21,  1911,  vide  supra,  page  43,  and  Matter  of  Jourdan, 
206  N.  Y.  653,  supra,  page  386. 

GRANDPARENT 

Entitled  to  one  thousand  dollars  exemption,  and  subject  to 
the  rates  of  tax  set  forth  in  subd.  2  of  §  221a,  supra,  page  47. 

GRANTEE 

For  discussion  of  subdivision  4,  of  §  220,  vide  page  35;  etiam 
cases  cited  sub  Contemplation  of  Death;  Gift. 
As  to  transfers  for  a  consideration,  vide  page  37. 

GRATUITY  FUND 

Vide  Matter  of  Fay,  25  Misc.  468,  cited  sub  Life  Insurance. 

GUARDIAN 

Vide  Special  Guardian. 

HALF  BLOOD,  RELATIVES  OF 

Vide  supra,  page  46. 

HIGHEST  RATE 

Vide  Remainders;  etiam  the  sixth  paragraph  of  §  230  and  the 
last  two  paragraphs  of  §  241  relative  to  refund  of  tax;  and  foot- 
note to  Matter  of  Brez,  supra,  page  273.  Vide  etiam  Matter  of 
Eaton,  55  Misc.  472-476. 

HISTORY  OF  LAW 

Vide  page  2,  and  cases  cited  sub  Constitutionality;  Exemp- 
tions; Non-Resident. 

HOSPITAL  CORPORATION 

Exempt  under  first  sentence  of  §  221.  Matter  of  Higgins, 
55  Misc.  175.  Vide  cases  cited  sub  Exemptions. 

HUMANE  SOCIETIES 

Vide  Enforcement  of  Laws  Relating  to  Children  or  Animals. 


718  HUSBAND 

HUSBAND 

Entitled  to  five  thousand  dollars  exemption  and  the  minimum 
rates  of  subd.  1  of  §  221a;  supra,  page  45. 

Prior  to  the  adding  of  the  last  sentence  of  §  243  by  chap.  732, 
Laws  1911,  in  effect  July  21,  1911,  the  personal  estate  of  a 
woman  who  died  intestate,  leaving  a  husband  and  no  descend- 
ants was  not  subject  to  transfer  tax.  Matter  of  Green,  144 
App.  Div.  232. 

Prior  to  said  amendment  curtesy  was  held  not  taxable.  Mat- 
ter of  Starbuck,  201  N.  Y.  531.  Vide  supra,  page  36. 

HUSBAND  OF  A  DAUGHTER,  subd.  1,  §  221a,  is  entitled  to 
exemptions  and  rates  of  subd.  1  even  though  daughter  has 
predeceased  decedent,  and  husband  has  married  again.  Matter 
of  Ray,  13  Misc.  480. 

IN  MATTER  OF  BLANCHE  L.  ANDREWS,  N.  Y.  Law  Journal, 
February  21,  1912,  it  was  held  that  where  a  woman  dies  leaving 
a  husband  and  no  descendants,  and  her  will  by  which  she 
bequeaths  all  her  personal  property  to  her  husband  is  duly 
admitted  to  probate,  he  takes  such  property  by  virtue  of  the 
provisions  of  the  will  and  not  jure  mariti,  and  its  transfer  is 
taxable.  In  his  opinion  Surrogate  Fowler  said:  "This  applica- 
tion is  made  by  the  executor  of  decedent's  estate  to  vacate  an 
order  fixing  tax  heretofore  entered  upon  the  report  of  an  ap- 
praiser, and  to  declare  the  estate  exempt  from  taxation. 

"The  decedent  died  on  November  26,  1909,  a  resident  of  New 
York  County.  She  was  survived  by  her  husband,  but  she  left 
no  descendants.  Her  will  was  duly  admitted  to  probate  by  this 
court  on  the  17th  of  January,  1910,  and  lettefs  testamentary 
were  duly  issued  to  her  husband  as  executor.  She  bequeathed 
her  entire  estate  to  her  husband.  The  appraiser  designated  to 
appraise  her  estate  for  the  purpose  of  the  transfer  tax  reported 
that  the  estate  consisted  of  personal  property  amounting  to 
$263,509.47,  and  that  it  passed  to  the  husband  of  decedent  as 
sole  beneficiary  and  legatee  in  accordance  with  the  provisions 
of  her  will.  An  order  assessing  a  tax  upon  the  interest  of  the 
husband  as  sole  legatee  was  duly  entered  upon  the  report.  The 
husband,  who  is  also  the  executor,  now  contends  that  he  took 
title  to  the  property  by  virtue  of  his  marital  rights  and  not 
under  the  will  of  the  decedent,  and  that  the  estate  of  the  dece- 
dent, therefore,  is  not  subject  to  a  transfer  tax. 

"  The  rule  of  the  common  law  which  authorized  a  husband  to 
take  the  personal  property  of  his  deceased  wife  by  virtue  of  his 


ILLEGITIMATE    DESCENDANTS  719 

marital  rights  has  not,  in  so  far  as  it  applies  to  the  case  of  a 
married  woman  dying  intestate  and  without  descendants,  been 
changed  by  the  various  enabling  statutes  in  relation  to  married 
women  (Robbins  v.  McClure,  100  N.  Y.  328).  Therefore, 
when  a  woman  dies  intestate  leaving  a  husband  and  no  descend- 
ants her  husband  is  entitled  to  her  personal  property  jure  mariti 
(Matter  of  Russell,  168  N.  Y.  178;  Barnes  v.  Underwood,  47 
N.  Y.  351).  The  property  to  which  a  husband  thus  becomes 
entitled  is  not  subject  to  a  transfer  tax  (Matter  of  Green,  144 
App.  Div.  232).  Therefore,  if  the  decedent  herein  had  died 
intestate  no  transfer  tax  could  be  imposed  upon  the  personal 
property  of  which  she  died  possessed.  But  she  made  a  will 
by  which  she  disposed  of  all  her  personal  property,  and  this 
will  was  duly  probated  by  this  court.  If  the  husband's  title  to 
the  property  was  acquired  by  virtue  of  the  provisions  of  de- 
cedent's will,  then  the  property  is  subject  to  a  transfer  tax 
(subd.  1,  §  220,  of  the  Tax  Law).  He  had  no  title  to  the  prop- 
erty during  the  life  of  his  wife  because  she  was  the  sole  owner  of 
it  (§  50,  Domestic  Relations  Law).  The  only  right  in  regard  to 
her  personal  property  which  he  acquired  by  virtue  of  his  mar- 
riage was  a  right  to  the  possession  of  so  much  of  it  as  she  did 
not  dispose  of  during  her  life  or  by  a  valid  testamentary  in- 
strument, provided  she  left  no  descendants  (Vallance  v.  Bausch, 
28  Barb.  633;  Burke  v.  Valentine,  52  Barb.  422).  But  as  the 
decedent  disposed  of  all  her  personal  property  by  a  valid  testa- 
mentary instrument,  the  husband  did  not  become  entitled  to  any 
of  it  jure  mariti.  The  fact  that  the  decedent  bequeathed  all  her 
personal  property  to  her  husband  does  not  detract  from  the 
force  of  this  conclusion,  because  by  bequeathing  it  to  him  she 
effectually  disposed  of  all  her  personal  property  and  thus  pre- 
vented the  accrual  of  his  right  to  any  of  it  jure  mariti.  As  he 
did  not  acquire  title  to  the  property  by  virtue  of  his  marital 
rights,  but  under  and  in  accordance  with  the  provisions  of 
decedent's  will,  the  transfer  of  the  property  is  taxable.  It  would 
appear,  therefore,  that  the  order  fixing  tax  should  be  affirmed." 

ILLEGITIMATE  DESCENDANTS 

Are  not  "lineal  descendants."  Matter  of  Beach,  154  N.  Y. 
242-248. 

Children  of  a  decedent's  illegitimate  daughter  who  them- 
selves were  born  in  lawful  wedlock  are  not  "lineal  descendants." 
Matter  of  Roebuck,  79  Misc.  589. 


720  INACTIVE    SECURITIES 

INACTIVE  SECURITIES 

Vide  MATTER  OF  CHAMBERS,  N.  Y.  Law  Journal,  January  31, 
1912,  opinion  quoted  sub  Closely  Held  Stock,  supra,  page  612. 
Etiam  MATTER  OF  KENNEDY,  N.  Y.  Law  Journal,  March  8, 
1911,  supra,  page  114. 

INCOMPETENT 

Vide  Special  Guardian. 

INCREASE 

Increase  in  value  of  decedent's  property  after  death,  or 
interest  accruing  thereafter  not  property  of  which  decedent  died 
seized  or  possessed.  Matter  of  Vassar,  127  N.  Y.  1-8;  Matter  of 
Davis,  149  N.  Y.  539-547.  Vide  §§  2712  and  2720  of  Qode  of 
Civil  Procedure. 

As  to  allowance  of  commissions  vide  Matter  of  Van  Pelt, 
63  Misc.  617,  supra,  page  127. 

INDUSTRIAL  STOCK 

Vide  Closely  Held  Stock  as  to  stock  not  customarily  bought 
and  sold  on  the  market.  For  active  stock  vide  Schedule  A4 
supra,  page  112;  comparatively  inactive  stock,  page  627. 

IN  EXTREMIS 

Vide  Contemplation  of  Death;  etiam  supra,  page  35. 

INFANT 
Vide  Special  Guardian. 

INFIRMARY    CORPORATIONS 

Exempt  under  the  provisions  of  the  first  sentence  of  §  221, 
supra,  page  40.  Vide  cases  cited  sub  Exemptions. 

INSURANCE 

Vide  Life  Insurance  Policy. 

INTANGIBLE  PROPERTY 

In  RESIDENT  estate  the  transfer  of  "any  intangible"  property 
is  subject  to  tax.  §  220;  Matter  of  Dusenberry,  2  State  Depart- 
ment Reports,  501,  opinion  quoted,  supra,  page  119. 


INTEREST  721 

In  NON-RESIDENT  estate  intangible  property  is  not  subject 
to  tax.  For  definition  vide  supra,  page  134. 

INTENT 

Vide  Evasion  of  Tax.  As  to  motive  of  testator  it  was  said 
in  Matter  of  Gould,  156  N.  Y.  423^28:  "It  matters  not  what 
the  motive  of  a  transfer  by  will  may  be,  whether  to  pay  a  debt, 
discharge  some  moral  obligation,  or  to  benefit  a  relative  for 
whom  the  testator  entertains  a  strong  affection,  if  the  devise  or 
bequest  be  accepted  by  the  beneficiary,1  the  transfer  is  made  by 
will,  and  the  state  by  the  statute  in  question  makes  a  tax 
to  impinge  upon  that  performance."  Vide  etiam  Matter  of 
Rogers,  71  App.  Div.  461-465,  affirmed,  on  opinion  below,  172 
N.  Y.  617;  Matter  of  Riemann,  42  Misc.  648-650;  Matter  of 
Edson,  38  App.  Div.  19,  affirmed,  on  opinion  below,  159  N.  Y. 
568.  Etiam  Matter  of  Kidd,  188  N.  Y.  274. 

For  discussion  of  transfers  by  deed  for  a  consideration  vide 
supra,  page  37. 

INTEREST 

(1)  Discount    allowed  for    early          (6)  Opinion  of  comptroller. 

payment.  (7)  Interest  not  allowed  on  re- 

(2)  Reduction  of  penalty.  fund   under  §  225. 

(3)  Petition  to  remit  penalty.  (8)  Accrued  interest  to  death  of 

(4)  Order  remitting  penalty.  decedent  taxable. 

(5)  Interest   payable   by  comp- 

troller under  §  241. 

(1)  Discount  allowed  for  early  payment 

Section  223  provides  that  if  the  tax  "is  paid  within  six  months 
from  the  accrual  thereof,  a  discount  of  five  per  centum  shall  be 
allowed  and  deducted  therefrom." 

COUNTY  TREASURER  is  the  one  to  whom  tax  must  be  paid, 
except  that  payment  should  be  made  to  state  comptroller  in  the 
seventeen  counties  of  Albany,  Bronx,  Dutchess,  Erie,  Kings, 
Monroe,  Nassau,  New  York,  Niagara,  Oneida,  Onondaga, 
Orange,  Queens,  Rensselaer,  Richmond,  Suffolk  and  West- 
chester.  Sections  223  and  229;  People  ex  rel.  Lown  v.  Cook,  158 
App.  Div.  78,  affirmed,  209  N.  Y.  mem. 

WHERE  TAX  ACCRUES  AT  DEATH  OF  LIFE  TENANT  interest 
is  charged  not  from  date  of  death  of  testator  creating  the  estate 
but  from  date  of  death  of  life  tenant.  Matter  of  Davis,  149 
N.  Y.  539-549.  Vide  Remainders,  post,  page  817. 

1  As  to  renunciation  of  legacy  vide  cases  cited  sub  Election. 

46 


722  INTEREST 

(2)  Reduction  of  penalty 

If  the  "tax  is  not  paid  within  eighteen  months  from  the 
accrual  thereof,  interest  shall  be  charged  and  collected  thereon 
at  the  rate  of  ten  per  centum  per  annum  from  the  time  the  tax 
accrued;  unless  by  reason  of  claims  made  upon  the  estate, 
necessary  litigation  or  other  unavoidable  cause  of  delay,  such 
tax  cannot  be  determined  and  paid  as  herein  provided,  in  which 
case  interest  at  the  rate  of  six  per  centum  per  annum  shall  be 
charged  upon  such  tax  from  the  accrual  thereof  until  the  cause 
of  such  delay  is  removed,  after  which  ten  per  centum  shall  be 
charged."  Section  223. 

The  transfer  tax  appraiser  is  not  the  one  to  whom  should  be 
addressed  an  application  under  §  223  to  reduce  the  rate  of 
interest  from  ten  to  six  per  centum  per  annum.  The  appraiser 
has  no  power  to  act  in  the  matter.  The  application  should  be 
made  to  the  surrogate  upon  notice  to  the  state  comptroller. 
Matter  of  Read,  204  N.  Y.  672;  Matter  of  Cornell,  170  id.  423; 
Matter  of  Skinner,  106  App.  Div.  217-218;  Matter  of  Wormser, 
51  App.  Div.  441-445;  Matter  of  Bolton,  35  Misc.  688;  Matter 
of  Stewart,  131  N.  Y.  274-285. 

"AN  APPLICATION  TO  REMIT  PENALTY  can  only  be  made  to 
the  court  upon  motion  and  is  not  to  be  the  subject  of  an  appeal 
from  the  decree  fixing  the  tax.  The  decree  does  not  concern 
itself  with  the  amount  of  interest  or  penalty.  If  the  penalty  is 
to  be  remitted  a  special  application  showing  grounds  therefor 
within  the  statute  must  be  made  to  the  surrogate."  Matter  of 
De  Graaf,  24  Misc.  147-150. 

APPLICATION  DENIED  in  Matter  of  Brower,  N.  Y.  Law 
Journal,  July  15,  1913,  Surrogate  Cohalan  saying:  "The  order 
fixing  tax  was  entered  before  the  expiration  of  the  eighteen 
months  within  which  the  tax  could  be  paid  without  penalty, 
and  as  the  executrix  failed  to  take  advantage  of  this  fact  the 
application  is  denied." 

Until  chap.  713,  Laws  of  1887,  in  effect  June  25,  1887,  interest 
on  the  tax  was  charged  from  the  date  of  accrual  if  not  paid 
within  the  statutory  period  although  the  delay  in  payment 
caused  by  necessary  litigation.  Matter  of  Stewart,  131  N.  Y. 
274. 

As  to  1885  statute,  vide  People  v.  Prout,  53  Hun,  541,  affirmed 
without  opinion,  117  N.  Y.  650. 

Under  chap.  713,  Laws  of  1887,  and  until  amendment  by 
chap.  399,  Laws  of  1892,  in  effect  May  1,  1892,  interest  ran  not 


INTEREST  723 

from  the  date  of  death  but  eighteen  months  subsequent  thereto 
provided  delay  caused  by  necessary  litigation  or  other  unavoid- 
able cause  of  delay.  Matter  of  Fayerweather,  143  N.  Y.  114. 

(3)  Petition  to  remit  penalty 

The  allegations  necessary  to  bring  the  petition  within  the 
terms  of  §  223  vary  with  the  circumstances  of  each  case.  The 
following  petition,  which  was  granted,  is  a  good  illustration 
of  the  proper  method  of  placing  the  facts  before  the  court. 

SURROGATES'  COURT,  COUNTY  OF  NEW  YORK. 


Petition  to  Remit  Penalty  under 
§£&. 


In  the  Matter  of  the  Transfer  Tax 
upon  the  Estate  of 
GRACE  MARGUERITE  COUDERT, 
Deceased. 

To  the  Surrogates'  Court  of  the  County  of  New  York: 

The  petition  of  John  V.  Bouvier,  Jr.,  as  executor  of  the  last  will  and 
testament  of  the  above  named  Grace  Marguerite  Coudert,  respectfully 
shows  and  alleges  as  follows: 

Said  decedent  was  a  resident  of  the  County  of  New  York  and  died  in 
France  on  the  fifth  day  of  June,  1909,  leaving  a  last  will  which  was 
admitted  to  probate  by  this  court  on  the  25th  day  of  February,  1911, 
and  letters  testamentary  thereon  were  granted  to  the  petitioner  on  the 
fourth  day  of  March,  1911. 

The  transfer  tax  upon  all  the  interests  in  the  estate  of  said  decedent 
has  been  assessed  at  the  sum  of  $773.43  by  an  order  made  herein  on  the 
loth  day  of  July,  1913. 

On  June  19,  1912,  the  petitioner  paid  the  Comptroller  of  the  State 
of  New  York  the  sum  of  $850  on  account  of  said  tax  and  interest  and 
received  a  temporary  receipt  therefor  in  the  usual  form. 

The  delay  in  the  determination  and  payment  of  said  tax  was  due 
to  claims  made  upon  the  estate,  necessary  litigation  and  other  un- 
avoidable causes.  The  proceedings  for  the  probate  of  the  will  were 
begun  promptly,  the  petition  for  the  probate  having  been  filed  in  this 
court  on  the  24th  day  of  June,  1909,  but  as  before  stated  the  will  was 
not  admitted  to  probate  until  February  25,  1911.  This  delay  was 
caused  by  a  contest  of  the  will  by  some  of  the  heirs-at-law  and  next  of 
kin  of  the  testatrix,  to  wit,  her  sisters  Aime'e  Coudert  Brennig  and 
Clarisse  Coudert  Nast.  After  the  entry  of  the  decree  admitting  the 
will  to  probate,  one  of  said  contestants,  Aime'e  Coudert  Brennig,  ap- 
pealed therefrom  to  the  Appellate  Division  of  the  Supreme  Court  for 
the  First  Judicial  Department,  and  printed  and  served  the  record  of 
such  appeal.  Said  appeal  was  finally  withdrawn,  but  not  until  the 
24th  day  of  July,  1911,  or  later. 


724  INTEREST 

An  action  was  also  brought  against  this  petitioner  by  said  Clarisse 
Coudert  Nast  to  recover  a  claim  for  moneys  alleged  to  have  been 
advanced  by  her  to  said  decedent  and  the  petitioner  was  obliged  to 
compel  the  claimant  to  make  proof  of  said  claim  and  to  litigate  the 
same.  Said  claim  was  not  proved  in  whole,  but  a  judgment  for  $2,250 
and  interest  was  finally  recovered  against  this  petitioner  as  such 
executor  and  was  entered  in  the  office  of  the  Clerk  of  the  County  of 
New  York  on  November  30, 1912. 

The  petitioner  was  also  in  doubt  as  to  the  value  and  collectibility  of  a 
note  for  $4,000,  forming  part  of  the  estate,  and  did  not  recover  and 
collect  the  same  until  May  28, 1912. 

By  reason  of  the  foregoing  causes  and  the  necessary  delays  in- 
cidental thereto,  said  tax  could  not  be  fixed  until  long  after  said  19th 
day  of  June,  1912  and  the  petitioner  could  not  pay  said  tax  before  that 
day,  and  he  therefore  prays  that  an  order  be  made  remitting  the  penalty 
upon  said  tax  from  ten  per  centum  per  annum  to  six  per  centum  per 
annum  from  said  fifth  day  of  June,  1909,  the  date  of  the  death  of  the 
decedent,  to  said  19th  day  of  June,  1912,  and  that  he  may  have  such 
other  and  further  relief  as  may  be  just.  JOHN  V.  BOUVIEE,  JR. 

County  of  New  York,  ss: 

John  V.  Bouvier,  Jr.,  being  duly  sworn,  says  that  he  is  the  petitioner 
above  named,  that  the  foregoing  petition  is  true  to  his  knowledge, 
except  as  to  the  matters  therein  stated  to  be  alleged  on  information  and 
belief  and  that  as  to  those  matters  he  believes  it  to  be  true. 

Sworn  to  before  me  this    )  T        T.  „ 

JOHN  V.  BOUVIEK,  JR. 


21st  day  of  July,  1913. 
Edward  F.  Lindsay, 
Commissioner  of  Deeds, 
New  York  City. 

(4)  Order  remitting  penalty 

At  a  Special  Term  of  the  Surro- 
gates' Court,  held  in  and  for  the 
County  of  New  York  in  the 
Borough  of  Manhattan,  on  the 
4th  day  of  August,  1913. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 

In  the  Matter  of  the  Appraisal 
under  the  Transfer  Tax  Law  of 


the  Estate  of 


WILLIAM  B.  PETTIT, 
Deceased. 

The  motion  made  on  behalf  of  Stephen  0.  Lockwood,  as  Executor  of 
William  B.  Pettit,  deceased,  to  reduce  the  interest  on  the  unpaid 


Order  Remitting  Penalty. 


INTEREST  725 

transfer  tax  assessed  on  the  estate  of  William  B.  Pettit  from  ten  per 
centum  per  annum  to  six  per  centum  per  annum,  coming  on  to  be  heard, 
now  on  reading  and  filing  the  affidavit  of  Stephen  0.  Lockwood,  veri- 
fied July  17th,  1913,  and  the  notice  of  motion  with  due  proof  of  service 
thereof  on  Thomas  E.  Rush,  Esq.,  attorney  for  the  State  Comptroller 
appearing  and  not  opposing,  it  is 

ORDERED  AND  ADJUDGED,  that  the  penalty  of  ten  per  cent  upon 
said  tax  be  remitted,  and  that  interest  be  charged  thereon  at  the 
rate  of  six  per  cent  from  the  date  of  accrual  of  said  tax,  to  wit,  the 
17th  day  of  March,  1910,  the  date  of  death  of  said  decedent,  to  the 
date  of  payment  thereof,  provided  that  payment  be  made  within 
thirty  days  after  the  entry  of  this  order. 

JOHN  P.  COHALAN, 
Surrogate. 

(5)  Interest  payable  by  comptroller  under  §  241 

Section  241  was  amended  by  Laws  1911,  chap.  800,  in  effect 
July  28,  1911,  by  adding  thereto  its  present  last  two  para- 
graphs. The  first  sentence  of  this  amendment  to  §  241  reads: 

"Whenever  the  tax  on  a  contingent  remainder  has  been  determined 
at  the  highest  rate  which  on  the  happening  of  any  of  said  contingencies 
or  conditions  would  be  possible  under  the  provisions  of  this  article,  the 
state  comptroller,  in  the  counties  wherein  this  tax  is  payable  direct  to 
him,  and  in  all  other  counties  the  treasurer  of  said  counties,  respectively, 
when  such  tax  is  paid  shall  retain  and  hold  to  the  credit  of  said  estate 
so  much  of  the  tax  assessed  upon  such  contingent  remainders  as 
represents  the  difference  between  the  tax  at  the  highest  rate  and  the 
tax  upon  such  remainders  which  would  be  due  if  the  contingencies  or 
conditions  had  happened  at  the  date  of  the  appraisal  of  said  estate, 
and  the  state  comptroller  or  the  county  treasurer  shall  deposit  the 
amount  of  tax  so  retained  in  some  solvent  trust  company  or  trust 
companies  or  savings  banks  in  this  state,  to  the  credit  of  such  estate, 
paying  the  interest  thereon  when  collected  by  him  to  the  executor  or 
trustee  of  said  estate,  to  be  applied  by  said  executor  or  trustee  as 
provided  by  the  decedent's  will." 

(6)  Opinion  of  comptroller 

In  Matter  of  Billingsley,  1  State  Department  Reports,  569, 
the  state  comptroller  in  an  opinion,  dated  February  14,  1913, 
said:  "The  department  is  of  the  opinion  that  the  amendment  to 
§  241  of  the  Transfer  Tax  Law  by  chapter  800  of  the  Laws  of 
1911,  requires  the  taxing  order  in  estates  where  the  tax  is  im- 
posed at  the  highest  rate  on  which  there  is  any  possibility  of 
certain  remainders  vesting,  to  be  entered  in  a  different  manner 
from  that  in  which  the  orders  in  such  cases  have  been  hereto- 


726  INTEREST 

fore  entered.  You  will  also  note  that  §  230  of  the  Tax  Law  was 
amended  by  chapter  800  of  the  Laws  of  1911  in  respect  to  the 
entering  of  an  order  where  the  tax  was  to  be  imposed  at  the 
highest  rate,  such  amendment  providing  for  the  entry  of  a 
temporary  order  only.  The  amendment  to  §  241  provides  that 
whenever  the  tax  on  a  contingent  remainder  has  been  deter- 
mined at  the  highest  rate,  that  when  such  tax  is  paid,  the  comp- 
troller shall  hold,  to  the  credit  of  said  estate,  so  much  of  the  tax 
assessed  upon  such  contingent  remainders  as  represents  the 
difference  between  the  tax  at  the  highest  rate  and  the  tax  on 
such  remainders  which  would  be  due  if  the  contingencies  or 
conditions  had  happened  at  the  date  of  the  appraisal  of  said 
estate.  This  amendment  further  provides  that  the  executors  or 
trustees  may  elect  to  assign  to  and  deposit  with  the  state  comp- 
troller bonds  or  other  securities,  to  be  approved  by  the  comp- 
troller, for  the  purpose  of  securing  the  payment  of  the  difference 
between  the  tax  on  such  remainders  at  the  highest  rate  and  the 
tax  on  such  remainders  which  would  be  due  if  the  contingencies 
or  conditions  had  happened  at  the  date  of  the  appraisal  of  the 
estate. 

"This  provision  necessarily  implies  that  the  temporary  taxing 
order  must  first  determine  the  amount  of  tax  which  would  be 
due  if  the  remainders  had  actually  become  vested  on  the  date 
of  the  appraisal  and  must  also  determine  the  amount  of  tax 
due  by  reason  of  extending  the  tax  at  the  highest  rate  on  which 
there  is  any  possibility  of  such  remainders  vesting.  Otherwise 
there  is  nothing  in  the  taxing  order  to  show  the  comptroller  the 
amount  that  is  to  be  turned  into  the  state  treasury  or  the 
amount  that  is  to  be  retained  by  him  until  the  ultimate  devolu- 
tion of  the  property." 

Vide  etiam  the  two  opinions  of  the  state  comptroller,  dated 
respectively  February  10,  and  February  11,  1913,  published  in 
1  State  Department  Reports,  566-567;  and  opinions,  dated 
respectively  May  19,  1913,  and  June  5,  1913,  published  in 
advance  sheets  of  said  State  Department  Reports.  Vide  Re- 
mainders, post,  page  824. 

(7)  Interest  not  allowed  on  refund  under  §  225 
A  refund  made  under  the  provisions  of  §  225  does  not  carry 

interest  since  the  amendment  of  §  225  by  Laws  1907,  chap.  323. 
Prior  to  1907  amendment  interest  was  paid  upon  the  amount 

of  tax  refunded.    Matter  of  O'Berry,  179  N.  Y.  285. 


JEWELRY  727 

(8)  Accrued  interest  to  death  of  decedent  taxable 

Matter  of  Vassar,  127  N.  Y.  1-8;  Matter  of  Hewitt,  181  id. 
547,  supra,  page  301. 

INTERLOCUTORY  ORDER 

Interlocutory  order  is  not  appealable.  Matter  of  Browne, 
195  N.  Y.  522,  and  cases  cited  sub  Appeal.  Vide  etiam  Matter 
of  Astor,  137  App.  Div.  922,  supra,  page  107. 

Temporary  order  should  be  entered  where  a  tax  has  been 
imposed  at  the  "highest  rate"  in  pursuance  of  the  provisions 
of  the  sixth  paragraph  of  §  230  as  amended  by  Laws  1911, 
chap.  800,  in  effect  July  28,  1911.  Vide  opinions  of  state  comp- 
troller cited  sub  Interest  and  sub  Remainders. 

INTERPRETATION  OF  STATUTE 

Vide  Doubt;  Legislative  Declaration. 

INTERSTATE  CORPORATION 

Vide  Apportionment  of  Property. 

INTER  VIVOS  GIFT 

Vide  Contemplation  of  Death;  Gift;  Trust  Deed. 

INTESTATE  LAWS 

Vide  Decedent  Estate  Law  supra,  page  548.  For  discussion 
vide  supra,  page  36. 

INVALID 

Failure  of  appraiser  to  give  notice  as  required  by  the  first 
sentence  of  the  second  paragraph  of  §  230  invalidates  proceeding. 
Matter  of  McPherson,  104  N.  Y.  306-321;  Matter  of  Wolfe, 
137  N.  Y.  205-213;  Matter  of  Winters,  21  Misc.  552-555; 
Matter  of  Backhouse,  110  App.  Div.  737-739,  affirmed,  without 
opinion,  185  N.  Y.  544. 

As  to  transfers  made  by  an  invalid,  vide  Matter  of  Dee,  N.  Y. 
Law  Journal,  December  6,  1913,  opinion  quoted,  supra,  page 
645,  and  other  cases  cited  sub  Contemplation  of  Death. 

JEWELRY 

Should  be  set  forth  in  Schedule  A3,  and  appraisal  by  expert 
should  be  furnished,  vide  supra,  page  108, 


728  JOINT-STOCK   ASSOCIATION 

JOINT-STOCK  ASSOCIATION 

Stock  of  a  joint-stock  association  held  by  resident  decedent  is 
subject  to  the  tax. 

NON-RESIDENT  ESTATE  is  not  subject  to  tax  on  stock  or  any 
other  intangible  property,  subd.  2  of  §  220  and  §  243.  If  the 
transfer  in  a  non-resident  estate  was  made  prior  to  the  amend- 
ment by  Laws  1911,  chap.  732,  in  effect  July  21,  1911,  then 
stock  of  a  joint-stock  company  held  by  a  non-resident  decedent 
is  taxable  only  in  the  proportion  which  the  assets  of  the  com- 
pany in  this  state  bear  to  the  entire  assets  of  the  company. 
Matter  of  Willmer,  75  Misc.  62,  affirmed,  153  App.  Div.  804. 
.  Shares  hi  the  "The  New  York  Times,"  a  joint-stock  associa- 
tion owning  real  estate,  held  to  be  personal  property.  Matter  of 
Jones,  172  N.  Y.  575. 

JOINT  TENANCY 

As  to  joint  ownership  of  personal  property  vide  Matter  of 
Von  Bernuth,  N.  Y.  Law  Journal,  March  1, 1913,  opinion  quoted, 
post,  page  791;  Matter  of  Heiser,  id.,  July  19,  1913,  opinion 
quoted,  post,  page  804;  Matter  of  Pitou,  79  Misc.  384,  and  other 
cases  cited  sub  Property  Held  in  Trust  or  Jointly,  post,  page  787. 

As  to  joint  tenancy  of  real  property  vide  post,  page  788. 

JUDICIAL  CAPACITY  OF  TAXING  OFFICER 

Vide  cases  cited  sub  Appraiser;  etiam  Matter  of  Ullmann, 
137  N.  Y.  403-407,  mpra,  page  181;  Amherst  College  v.  Ritch, 
151  N.  Y.  282-343;  Matter  of  Costello,  189  N.  Y.  288-291. 

JUDICIAL  NOTICE 

The  court  will  not  take  judicial  notice  of  the  statutes  and 
decisions  of  other  states.  Matter  of  Cummings,  142  App.  Div. 
377-391.  Vide  Laws  of  Another  State  or  Country. 

JURE  MARITI 

Vide  Husband. 

JURISDICTION 

Vide  Appeal;  Appraiser;  Mandamus;  Notice  of  Appraisal; 
Reappraisal;  Supreme  Court;  Surrogate;  Vacating  Decree. 

As  to  jurisdiction  of  surrogate  in  RESIDENT  estate,  vide 
page  56;  in  NON-RESIDENT,  page  137. 


LAWS  OF  ANOTHER  STATE  OR  COUNTRY      729 

Jurisdiction  of  court  of  another  state  may  be  attacked. 
Tilt  v.  Kelsey,  207  U.  S.  43-59,  supra,  page  311;  Matter  of 
Lawrence,  N.  Y.  Law  Journal,  February  15,  1913,  opinion 
quoted  supra,  page  317;  Matter  of  Cummings,  142  App.  Div. 
377. 

KENNEDY  CASE,  RULE  IN 

Matter  of  John  S.  Kennedy,  N.  Y.  Law  Journal,  March  8, 
1911,  supra,  page  114.  Vide  etiam  Matter  of  Chambers,  id., 
January  31,  1912,  supra,  page  627. 

LACHES 

Where  none,  not  estopped  from  exercising  election  not  to  take 
under  will.  Matter  of  Mather,  90  App.  Div.  382-385,  affirmed, 
without  opinion,  179  N.  Y.  526.  Vide  Statute  of  Limitations. 

A  decree  of  the  surrogate's  court  will  not  be  opened  where 
there  has  been  laches  on  the  part  of  the  petitioner.  Matter 
of  Daly,  34  Misc.  148-153.  Vide  cases  cited  sub  Vacating 
Decree. 

LAPSED  LEGACY 

Should  be  pointed  out  in  Schedule  D,  page  94.  Morgan  v. 
Cowie,  49  App.  Div.  612-615. 

LARGE  BLOCK  OF  STOCK 

Vide  Matter  of  Curtice,  185  N.  Y.  543,  supra,  page  325;  etiam 
page  115. 

LAWS  OF  ANOTHER  STATE  OR  COUNTRY 

Japanese  law  as  to  real  property  put  in  evidence  by  certificate 
of  Japanese  barrister.  Matter  of  Vivanti,  206  N.  Y.  656, 
supra,  page  388.  Vide  §  942  of  Code  of  Civil  Procedure. 

New  Jersey  law  introduced  in  evidence  by  affidavit  of  New 
Jersey  lawyer.  Tilt  v.  Kelsey,  207  U.  S.  43,  supra,  page  316. 

ABSENCE  OF  PROOF.  In  Matter  of  Lawrence,  N.  Y.  Law 
Journal,  February  15,  1913,  Surrogate  Fowler  held:  "As  the 
decedent  was  a  resident  of  Connecticut,  the  question  whether  he 
made  a  valid  gift  of  the  bonds  to  the  persons  claiming  them 
should  be  determined  by  the  law  of  Connecticut.  No  proof  of 
that  law  was  adduced  before  the  appraiser,  and  in  the  absence 
of  such  proof  it  will  be  presumed  by  this  court  that  the  common 
law  of  Connecticut  is  the  same  as  our  law  (First  Nat.  Bank  v, 


730  LEASEHOLD 

Nat.  Broadway  Bank,  156  N.  Y.  459;  Electro-Tint  Eng.  Co.  v. 
Amer.  Handkerchief  Co.,  130  App.  Div.  564)." 

Surrogate  Fitzgerald  in  Matter  of  Kennedy,  20  Misc.  531, 
refused  to  consider  in  NON-RESIDENT'S  ESTATE  claim  for  deduc- 
tion of  executor's  commissions  in  Pennsylvania  which  were 
larger  than  allowed  in  New  York,  for  the  reason  that  the 
Pennsylvania  law  had  not  been  proved  on  the  subject. 

As  to  validity  and  effect  of  TESTAMENTARY  DISPOSITIONS  OF 
NON-RESIDENT  vide  §  47  of  Decedent  Estate  Law,  supra, 
page  547;  Matter  of  Turner,  82  Misc.  25-28. 

EXEMPLIFIED  COPIES.  Representative  of  estate  invoked  the 
full  faith  and  credit  clause  of  the  Constitution  of  the  United 
States  (Art.  4,  §  1)  "upon  bare  allegations  of  conclusions  upon 
information  and  belief.  The  least  that  this  respondent  could 
have  done  was  to  annex  to  its  papers  exemplified  copies  of  the 
proceedings  and  decrees  for  which  faith  and  credit  were  claimed; 
and  until  such  proof  was  made  it  was  not  incumbent  upon  the 
State  Comptroller  either  to  attack  the  jurisdiction  of  the  Cal- 
ifornia court  or  to  prove  the  California  law."  Matter  of  Cum- 
mings,  142  App.  Div.  377-386. 

JURISDICTION  of  court  of  another  state  may  be  attacked. 
Tilt  v.  Kelsey,  207  U.  S.  43-59;  Matter  of  Lawrence,  N.  Y.  Law 
Journal,  February  15,  1913,  opinion  quoted  supra,  page  317: 
Matter  of  Cummings,  142  App.  Div.  377-390. 

LEASEHOLD 

As  to  rents  vide  subdivision  7  of  §  2712  of  Code  of  Civil 
Procedure,  and  also  §  2720 ;  Jay  v.  Kirkpatrick,  26  Misc.  550- 
551. 

Unexpired  lease,  vide  Schedule  B3,  page  132. 

Perpetual  lease,  reserving  rent,  real  property.  Matter  of 
Vivanti,  206  N.  Y.  656,  supra,  page  387. 

Lease  for  twenty-one  years  from  Columbia  College  of  real 
estate  in  New  York  held  to  be  personal  property  under  subdi- 
vision 1  of  §  2712  of  Code  of  Civil  Procedure.  Matter  of 
Althause,  63  App.  Div.  252,  affirmed,  without  opinion,  168 
N.  Y.  670. 

NON-RESIDENT,  who  died  January  17,  1898,  at  the  time  of  his 
death  was  the  lessee  of  certain  premises  in  the  County  of  New 
York.  An  application  was  made  to  declare  estate  exempt,  and 
in  denying  the  application  Surrogate  Cohalan,  in  MATTER  OP 
JOHN  H.  ROSENBAUM,  N.  Y.  Law  Journal,  August  7,  1913,  said: 


LEGACY  731 

"The  lease  was  for  a  term  of  twenty-one  years,  with  the  priv- 
ilege of  renewal.  The  written  instrument  of  lease  was  in  New 
Jersey  at  the  time  of  decedent's  death,  and  as  this  was  the  only 
property  of  which  the  decedent  died  seized  or  possessed  in  the 
State  of  New  York  the  executor  contends  that  the  estate  is 
exempt  from  taxation.  Section  242  of  chapter  908  of  the  Laws 
of  1896  defines  the  words  'estate'  and  'property'  as  used  in 
the  Transfer  Tax  Law  as  the  'property  or  interest  therein  of 
the  testator  passing  to  those  not  specifically  exempt.'  There- 
fore the  decedent's  right  to  the  use  and  occupation  of  the  lease- 
hold premises  was  an  interest  in  property  located  here. 

"The  fact  that  the  instrument  of  lease  was  located  in  New 
Jersey  is  immaterial,  as  it  was  merely  evidence  of  the  decedent's 
interest  in  the  premises  situate  in  this  county.  A  lease  is  not 
an  indebtedness  existing  in  favor  of  either  of  the  parties  thereto, 
but  evidence  of  a  contract  or  agreement  by  which  each  of  the 
parties  became  entitled  to  certain  rights.  Like  a  certificate  of 
stock  in  a  corporation,  it  has  no  legal  situs  apart  from  the  prop- 
erty to  which  it  refers.  The  decedent's  interest  in  the  leasehold 
premises  therefore  constituted  property  hi  this  State  (Matter 
of  Whiting,  150  N.  Y.  27;  Matter  of  Clinch,  180  N.  Y. 
300)." 

A  transfer  made  since  the  1911  amendment  to  subdivi- 
sion 2  of  §  220  of  intangible  property  of  NON-RESIDENT  is  not 
taxable.  For  definition  of  intangible  property  vide  §  243  and 
Matter  of  Dusenberry,  2  State  Department  Reports,  501,  opin- 
ion quoted  supra,  page  119. 

LEGACY 

Vide  Residuary  Estate. 

ASSIGNMENT  of  to  avoid  contest  taxable  as  though  assignment 
not  made.  Matter  of  Cook,  187  N.  Y.  253. 

LEGATEE  MAY  RENOUNCE  the  gift  and  refuse  to  receive  it, 
and  no  tax  can  be  collected  with  respect  to  him  because  there 
has  been  no  transfer  to  him.  Matter  of  Wolfe,  179  N.  Y.  599, 
supra,  page  297. 

MAY  RENOUNCE  A  LEGACY  IN  PART.  Matter  of  Merritt,  155 
App.  Div.  228-232. 

As  to  property  in  NON-RESIDENT  estate  not  specifically 
bequeathed,  vide  supra,  page  152. 

CANCELLATION  BY  WILL  OF  NOTES  is  a  taxable  transfer, 
Matter  of  Wood,  40  Misc.  155,  unless  maker  of  note  is  insolvent. 


732  LEGACY 

Morgan  v.  Warner,  45  App.  Div.  424-427,  affirmed,  on  opinion 
below,  162  N.  Y.  612. 

FORGIVING  DEBT  taxable  unless  debtor  insolvent.  Matter  of 
Manning,  169  N.  Y.  449. 

As  to  JUDGMENT  against  heir.  Matter  of  Smith,  14  Misc. 
169-171. 

LAPSED  LEGACIES  should  be  pointed  out  in  Schedule  D, 
page  94.  Morgan  v.  Cowie,  49  App.  Div.  612-615. 

LEGACY  TO  UNITED  STATES  government  is  taxable.  Matter  of 
Merriam,  141  N.  Y.  479,  sustained  in  163  U.  S.  625,  sub 
nom.  United  States  v.  Perkins. 

LEGACY  TO  PAY  DEBTS  taxable  if  creditor  accepts  the  legacy 
in  payment  of  debt.  Matter  of  Jay  Gould,  156  N.  Y.  423, 
supra,  page  224;  Matter  of  Rogers,  71  App.  Div.  461-465, 
affirmed,  on  opinion  below,  172  N.  Y.  617. 

EXTRINSIC  EVIDENCE  IMPRESSING  LEGACY  WITH  TRUST  does 
not  relieve  from  tax  against  legatee,  the  equitable  rights  arising 
not  under  the  will,  but  from  facts  appearing  extrinsic  thereto. 
Matter  of  Edson,  159  N.  Y.  568,  supra,  page  230. 

PAYMENT  OF  TAX 

The  will  provided  that  the  legacies  were  to  be  paid  "without 
any  rebate  or  deduction  whatever."  This  was  held  not  to  mean 
that  the  inheritance  tax  should  be  paid  from  the  residuary 
estate.  The  executor  should,  under  §  224,  pay  the  tax  and 
deduct  the  amount  thereof  from  the  legacy.  Jackson  v.  Tailer, 
184  N.  Y.  603,  supra,  page  322. 

Surrogate  McCauley,  Rockland  County,  in  Matter  of  Smith, 
80  Misc.  140-143,  says:  "That  the  testator  had  the  right  to 
direct  how  or  from  what  fund  all  succession  or  transfer  taxes 
should  be  paid  cannot  be  questioned.  Matter  of  Gihon,  169 
N.  Y.  443,  62  N.  E.  561;  Isham  v.  New  York  Ass'n  for  Poor, 
177  N.  Y.  218,  69  N.  E.  367.  The  direction  of  the  testator,  as 
expressed  in  the  first  clause  of  his  will,  is: 

"  'That  all  the  gifts,  bequests,  devises  and  legacies  hereinafter 
mentioned  be  paid,  transferred  or  received  in  full  (subject  to 
any  provisions  for  abatement  hereinafter  contained),  and  that 
all  succession  or  transfer  taxes  imposed  thereon,  or  on  any  of 
them,  be  paid  out  of  my  residuary  estate/ 

"This  language  is  comprehensive,  apt,  and  expressive,  and, 
as  it  seems  to  me,  admits  of  but  one  interpretation,  namely,  that 
the  testator's  intention  was  that  all  persons  who  take,  whether 
immediately  and  directly  under  his  will,  or  by  the  exercise  of 


LEGISLATIVE   DECLARATION  733 

the  power  of  appointment,  should  receive  the  gift  or  bequest 
without  diminution  through  the  imposition  upon  the  transfer 
of  any  federal  or  state  tax." 

In  TRUST  ESTATE  the  tax  is  paid  out  of  corpus  not  out  of  in- 
come. Matter  of  Tracy,  179  N.  Y.  501,  and  cases  cited  sub 
Payment  of  Tax. 

"WHERE  A  LEGACY  is  GIVEN  FOR  A  SPECIFIED  AMOUNT  the 
tax  must  be  deducted  from  the  amount  of  the  legacy  and  the 
balance  only  given  to  the  legatee."  Matter  of  Gihon,  169  N.  Y. 
443-447. 

Non-resident 

Prior  to  amendment  by  chap.  732,  Laws  1911,  supra,  page  526, 
in  effect  July  21,  1911,  of  subdivision  2  of  §  220  and  §  243,  the 
Court  of  Appeals  passed  upon  the  question  of  the  interest  of 
non-resident  decedent  in  estate  of  another  decedent  in  Matter 
of  Phipps,  143  N.  Y.  641  (1894),  supra,  page  190;  Matter  of 
Zefita,  167  N.  Y.  280  (1901),  supra,  page  251;  Matter  of  Clinch, 
180  N.  Y.  300  (1904),  supra,  page  300;  and  Matter  of  Lord,  186 
N.  Y.  549  (1906),  supra,  page  332,  the  Lord  case  being  sustained 
in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn. 

IN  MATTER  OF  ARMSTRONG,  N.  Y.  Law  Journal,  February  20, 
1912,  Surrogate  Fowler  said:  "This  is  an  appeal  by  the  State 
Comptroller  from  an  order  fixing  tax.  The  decedent  was  a  resi- 
dent of  Connecticut  and  died  on  the  27th  day  of  June,  1910. 
At  the  time  of  his  death  he  was  entitled  to  a  one-third  interest 
in  the  estate  of  his  father,  Lorenzo  Armstrong.  The  latter  was 
also  a  resident  of  Connecticut.  At  the  time  of  the  decedent's 
death  his  father's  estate  had  not  been  distributed,  but  a  decree 
of  distribution  was  entered  by  the  Probate  Court  of  New  Haven 
on  29th  of  October,  1910,  and  the  executors  of  decedent's  estate 
then  received  from  the  executors  of  the  estate  of  Lorenzo 
Armstrong  certain  stocks  in  New  York  corporations.  Such 
stocks  then  became  a  part  of  decedent's  estate,  and  as  these 
facts  were  alleged  in  the  affidavits  submitted  to  the  appraiser 
before  the  filing  of  his  report  he  should  have  included  in  the 
taxable  assets  of  decedent's  estate  the  stocks  of  New  York 
corporations  which  had  been  delivered  to  the  executors  of  de- 
cedent's estate  by  the  executors  of  the  estate  of  Lorenzo  Arm- 
strong (Matter  of  Clinch,  180  N.  Y.  300)." 

LEGISLATIVE  DECLARATION 

Amendment  incorporating  new  matter  is  entitled  to  consider- 


734  LETTERS 

ation  at  the  hands  of  the  court,  "as  a  legislative  declaration  that 
the  subject-matter  of  the  new  provision  did  not  prior  thereto 
constitute  a  part  of  the  law."  Matter  of  Harbeck,  161  N.  Y. 
211-217;  Matter  of  Miller,  110  id.  216-222;  Matter  of  Enston, 
113  id.  174-183. 

Legislature  may  specifically  declare  that  property  "  heretofore 
devised  or  bequeathed"  shall  be  exempt.  Church  of  the  Trans- 
figuration v.  Niles,  86  Hun,  221-222.  Vide  cases  cited  sub 
Doubt;  Retroactive. 

LETTERS 

Issuance  of  letters  not  necessary  to  confer  jurisdiction.  Sec- 
tion 228;  Matter  of  Edgerton,  35  App.  Div.  125-126,  affirmed, 
without  opinion,  158  N.  Y.  671;  Matter  of  Fitch,  160  N.  Y. 
87-91;  2  State  Department  Reports,  497-500. 

As  to  JURISDICTION  IN  RESIDENT  ESTATE,  vide  page  56. 
In  non-resident  estate,  page  137. 

LIBRARY 

Corporation  or  association,  wherever  incorporated  or  located, 
organized  exclusively  for  library  purposes  not  subject  to  tax 
upon  bequests  of  personal  property  other  than  money  or  secu- 
rities. Second  sentence  of  §  221.  Matter  of  Francis,  121  App. 
Div.  129,  affirmed,  on  opinion  below,  189  N.  Y.  554;  Matter  of 
Saunders,  77  Misc.  54-62,  affirmed,  without  opinion,  156  App. 
Div.  891. 

LEGACY  TO  PURCHASE  BOOKS  for  Forman  Library  of  Clean 
was  held  to  be  exempt  by  Surrogate  Davie  of  Cattaraugus 
County  in  Matter  of  Higgins,  55  Misc.  175. 

LIEN  OF  TAX 

The  statute  by  §  224  provides  that  "  every  such  tax  shall  be 
and  remain  a  lien  upon  the  property  transferred  until  paid  and 
the  person  to  whom  the  property  is  so  transferred,  and  the 
executors,  administrators  and  trustees  of  every  estate  so  trans- 
ferred shall  be  personally  liable  for  such  tax  until  its  payment." 

The  above  provision  of  §  224  should  be  read  in  connection 
with  §  245  which  declares,  inter  alia:  "  provided,  however,  that 
as  to  real  estate  in  the  hands  of  bona  fide  purchasers,  the  trans- 
fer tax  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as 
against  such  purchasers  after  the  expiration  of  six  years  from  the 


LIEN    OF   TAX  735 

date  of  accrual."  Vide  Matter  of  Strail,  195  N.  Y.  575,  supra, 
page  368. 

Section  245  is  retroactive.  Matter  of  Strang,  117  App.  Div. 
79G;  Matter  of  Moench,  39  Misc.  480. 

PURCHASER  COMPELLED  TO  TAKE  TITLE  in  Brown  v.  Lawrence 
Park  Realty  Co.,  133  App.  Div.  753.  The  case  was  tried  upon 
an  agreed  statement  of  facts  under  the  provisions  of  §  1279  of 
the  Code  of  Civil  Procedure.  The  executors  had  entered  into  a 
contract  to  sell  certain  of  the  real  estate  of  decedent,  and  the 
court  held,  page  756:  "That  neither  the  whole  nor  any  part  of 
the  transfer  tax  which  the  law  imposed  upon  the  various  legatees 
under  the  will  of  plaintiff's  testator  was  a  lien  upon  the  real 
property  contracted  to  be  sold,  and  that  defendant  was  not 
justified  in  rejecting  title  on  the  sole  ground  that  such  transfer 
tax  was  a  lien  thereon." 

MOTION  TO  COMPEL  PURCHASER  TO  TAKE  TITLE  denied  by 
Justice  Beekman  at  New  York  Special  Term  on  ground  that 
transfer  tax  had  not  been  fixed  on  estate  of  person  who  died 
seized  of  the  premises.  "The  tax  belongs  to  the  state,  and  the 
lien  which  is  given  to  the  state  to  secure  its  collection  is  em- 
phatically and  hi  terms  declared  by  the  statute  to  be  one  that 
shall  continue  until  the  tax  is  paid."  Kitching  v.  Shear,  26 
Misc.  436-439. 

IN  REAL  ESTATE  TRANSACTIONS  it  is  the  practice  to  insist 
upon  transfer  tax  proceedings.  The  certificate  of  the  state 
comptroller  under  the  last  paragraph  of  §  236  should  be  obtained 
and  recorded  so  as  to  avoid  any  future  question  as  to  payment  of 
tax. 

Vide  MATTER  or  MEYER,  209  N.  Y.  386,  supra,  page  397,  for 
discussion  of  §  236. 

POWER  OF  EXECUTOR  TO  SELL  REAL  ESTATE  to  satisfy  lien  of 
tax  discussed  in  opinion  of  state  comptroller  quoted  sub  Real 
Estate. 

IN  NON-RESIDENT  ESTATE  it  was  held  that  the  state  had  a 
lien  on  the  property  within  the  state.  Matter  of  Pullman,  46 
App.  Div.  574-577. 

LEGATEE  not  liable  personally  beyond  the  amount  of  the 
property  coming  into  his  hands.  Matter  of  Bushnell,  73  App. 
Div.  325-328,  affirmed,  without  opinion,  172  N.  Y.  649,  supra, 
page  275. 

Where  a  legatee  does  not  accept  a  legacy  in  full  the  transfer 
tax  is  a  lien  so  far  as  the  legatee  is  concerned;  against  only  that 


736  LIFE   ESTATE 

portion  of  the  legacy  not  renounced.    Matter  of  Merritt,  155 
App.  Div.  228-232. 

LIFE  ESTATE 

Vide  Annuities;  Gift;  Payment  of  Tax;  Power  of  Appoint- 
ment; Remainders;  Trust  Deed. 

Value  of  life  estate  to  be  computed  upon  5%  basis  by  Su- 
perintendent of  Insurance  under  §  230.  Matter  of  Potter,  199 
N.  Y.  561,  supra,  page  371. 

As  to  TABLES  used  by  Superintendent  of  Insurance  vide 
page  581. 

Taxable  although  life  tenant  dies  before  probate  of  will. 
Matter  of  White,  208  N.  Y.  64,  supra,  page  390. 

Life  estate  of  life  tenant  dying  before  appraisal  is  not  to  be 
calculated  on  actual  duration,  but  on  theoretical  valuation  by 
Superintendent  of  Life  Insurance.  Matter  of  Jones,  28  Misc. 
356,  affirmed,  172  N.  Y.  575.  Vide  Matter  of  Hall,  36  Misc. 
618,  discussed  supra,  page  586. 

As  to  estate  of  a  decedent  entitled  to  a  vested  interest  in  the 
estate  of  another  decedent,  subject  to  the  life  interest  of  a  life 
tenant,  vide  Matter  of  Huber,  86  App.  Div.  458-463.  Such 
interest  should  be  set  forth  in  Schedule  A6  supra,  page  121. 

As  to  taxation  of  life  estate  subject  to  annuities  vide  Matter 
of  Maresi,  74  App.  Div.  76.  The  Maresi  case  also  interprets 
and  applies  the  provisions  of  the  fifth  paragraph  of  §  230. 

LIFE  INSURANCE 

In  resident  estates  the  life  insurance  policies  payable  to  the 
estate  of  decedent  should  be  set  forth  in  Schedule  A3  supra, 
page  110. 

Life  insurance  policies  payable  to  estate  of  resident  decedent 
are  subject  to  transfer  tax;  immaterial  whether  taxable  under 
general  tax  law.  Matter  of  Knoedler,  140  N.  Y.  377. 

Decedent,  a  resident,  had  a  life  insurance  policy  on  his  life 
payable  to  his  executors,  administrators  or  assigns,  "  for  the  ex- 
press benefit  of  his  wife,  and  surviving  children."  The  amount 
of  the  policy,  together  with  certain  dividends  and  accruments 
thereon,  was  collected  by  and  paid  to  the  executrices.  Surrogate 
Millard,  Westchester  County,  said:  "It  seems  to  me  that  the 
language  of  the  policy  simply  designates  the  executors,  adminis- 
trators or  assigns  as  some  one  to  whom  the  payment  can  be 


LIFE   INSURANCE  737 

made,  but  it  is  clearly  not  for  them  to  say  what  shall  be  done 
with  it  but  they  are  the  medium  only  to  pass  the  money  to 
the  widow  and  children,  who  are  alone  entitled  to  its  pro- 
ceeds. *  *  * 

"This  policy,  to  my  mind,  is  merely  a  contract  between  the 
decedent  and  the  company  for  the  benefit  of  his  wife  and  chil- 
dren and  no  one  else  is  or  can  be  interested  therein  and  the  same 
does  not  pass  by  reason  of  the  provisions  of  this  will  but  by 
reason  of  the  clause  in  the  policy  itself,  and  I,  therefore,  reverse 
the  ruling  of  the  appraiser  holding  that  the  proceeds  of  this 
policy  are  taxable."  Matter  of  Elting,  78  Misc.  692. 

Decedent  had  life  insurance  policies  payable  to  his  estate. 
At  his  death  they  were  found  in  his  safe  deposit  box.  Attached 
to  each  policy  was  a  duplicate  assignment  of  it  to  his  wife  if  she 
survived  him,  otherwise  to  his  estate.  One  policy  was  payable 
to  the  assured  if  he  lived  twenty  years,  and  in  the  assignment 
he  reserved  the  cash  payment  if  he  lived  for  that  period.  The 
duplicate  original  assignments  were  filed  with  the  insurance 
company,  who  paid  the  amount  of  the  policies  to  the  wife.  The 
Comptroller  contended  a  tax  was  due  on  the  theory  that  the 
assignments  were  to  take  effect  in  possession  and  enjoyment  at 
the  death  of  the  decedent.  Held,  not  taxable,  the  court  saying: 
"The  statutes  of  this  state  favor  and  encourage  insurance  for 
the  benefit  of  a  wife,  and  the  state  is  at  a  disadvantage  when 
it  seeks  to  tax  such  a  provision  for  her  when  the  company  and 
all  others  recognize  her  right  to  the  benefit  intended."  Matter 
of  Parsons,  117  App.  Div.  321-323. 

GRATUITY  FUND  of  New  York.  Produce  Exchange  in  which 
decedent  had  interest  held  not  subject  to  tax.  Matter  of  Fay, 
25  Misc.  468. 

Non-resident 

In  non-resident's  estate  the  proceeds  of  life  insurance  policies 
are  not  subject  to  tax.  Subdivision  2  of  §§  220  and  243.  Prior 
to  the  amendment  by  Laws  of  1911,  chap.  732,  supra,  page  526, 
the  courts  passed  on  the  questions  in  the  cases  indicated  below. 

Life  insurance  in  New  York  company  on  life  of  NON-RESIDENT 
not  taxable  where  it  is  not  necessary  to  resort  to  the  courts  of 
New  York  to  enforce  payment.  Matter  of  Gordon,  186  N.  Y. 
471;  Matter  of  Rhoads,  190  N.  Y.  525;  vide  etiam  Matter  of 
Abbott,  29  Misc.  567;  Matter  of  Horn,  39  Misc.  133;  Matter  of 
Gibbs,  60  Misc.  645. 
47 


738  LIMITATION    OF   TIME 

LIMITATION  OF  TIME 

"The  provisions  of  the  Code  of  Civil  Procedure  relative  to  the 
limitation  of  time  of  enforcing  a  civil  remedy  shall  not  apply  to 
any  proceeding  or  action  taken  to  levy,  appraise,  assess,  deter- 
mine or  enforce  the  collection  of  any  tax  or  penalty  prescribed 
by  this  article.  *  *  *"  Section  245.  Vide  Statute  of  Limita- 
tions. 

As  to  REFUND  under  §  225  vide  Matter  of  Hoople,  179  N.  Y. 
308,  supra,  page  290;  Matter  of  Buckingham,  106  App.  Div. 
13-17;  Matter  of  Von  Post,  35  Misc.  367. 

LINEAL  DESCENDANTS 

Entitled  to  exemption  of  five  thousand  dollars  and  the 
minimum  rates  of  subdivision  1  of  §  221a. 

Transfers  of  personal  property  to  lineals  were  first  made 
taxable  by  chap.  215,  Laws  of  1891,  in  effect  April  20,  1891,  and 
it  was  not  until  March  16,  1903,  that  transfers  of  real  property 
to  lineals  were  made  taxable  by  chap.  41,  Laws  of  1903.  Real 
estate  situated  without  the  state  is  not  subject  to  tax.  Matter 
of  Swift,  137  N.  Y.  77. 

Child  of  adopted  child  a  lineal  descendant  of  foster  parent. 
Matter  of  Cook,  187  N.  Y.  253. 

In  MATTER  OF  ROEBUCK,  79  Misc.  589,  the  question  was 
raised  as  to  whether  the  rate  of  taxation  of  legacies  to  children 
of  the  decedent's  illegitimate  daughter  who  themselves  were 
born  in  lawful  wedlock  should  be  at  one  per  cent  or  at  five  per 
cent.  In  deciding  that  the  five  per  cent  rate  applied  Surrogate 
Ketcham  said:  "  '  A  lineal  descendant  is  one  who  is  in  the  line  of 
descent  from  a  certain  person.'  But  the  line  of  descent  is  not 
merely  derived  from  the  communication  of  blood  by  animal  gen- 
eration. '  The  line  of  descent  is  the  course  that  property  takes 
according  to  law  when  the  owner  dies.'  Matter  of  Beach,  154 
N.  Y.  242;  Matter  of  Cook,  187  N.  Y.  253-261. 

"These  cases  forbid  the  argument,  made  in  behalf  of  the  leg- 
atees, that  the  words  'lineal  descendants'  in  the  statute  cited 
supra  are  not  used  in  their  legal  and  technical  sense.  Under 
these  authorities  there  is  no  line  of  descent  between  the  decedent 
and  these  legatees,  and  they  cannot  be  his  descendants." 

LISTED  SECURITIES 

Vide  page  112. 


MARRIAGE   TERMINATING   TRUST   ESTATE  739 

LITERARY  CORPORATION  OR  ASSOCIATION 

Entitled  to  exemptions  under  second  sentence  of  §  221,  supra, 
page  41. 

LOCAL  STOCKS 

Vide  Matter  of  Cook,  50  Misc.  487-493  (supra,  page  338), 
affirmed,  187  N.  Y.  253-262,  and  cases  cited  sub  Closely  Held 
Stock. 

MANDAMUS 

Mandamus  issued  compelling  state  comptroller  to  refund  tax 
paid  upon  an  order  of  the  surrogate  assessing  tax,  which  order, 
the  court  held,  was  made  without  jurisdiction.  Matter  of 
Coogan,  162  N.  Y.  613,  supra,  page  239. 

Mandamus  issued  to  compel  surrogate  to  cause  appraisal 
of  an  estate  upon  application  of  state  comptroller.  Kelsey  v. 
Church,  112  App.  Div.  408. 

Motion  denied  for  a  peremptory  writ  of  mandamus  to  compel 
state  comptroller  to  appoint  under  §  234  transfer  tax  assistant 
recommended  by  surrogate.  Duell  v.  Glynn,  191  N.  Y.  357. 

Application  for  writ  of  mandamus  to  compel  state  comptrol- 
ler to  issue  final  receipt  refused  upon  the  merits  in  People  ex  rel. 
Ripley  v.  Williams,  69  Misc.  402.  Vide  Payment  of  Tax,  post, 
page  757. 

MANUSCRIPTS 

Vide  §  2216,  supra,  page  43  as  to  when  exempt. 
Should  be  set  forth  in  Schedule  A  3  and  appraisal  by  expert 
should  be  furnished,  vide  supra,  page  107. 

MARITAL  RIGHTS 

Vide  Curtesy;  Dower;  Husband;  Wife. 

MARKET  VALUE 

Vide  Cash  Value;  Closely  Held  Stock. 

"There  may  be  no  'market  value'  for  the  stock  of  private 
business  corporations."  Matter  of  Valentine,  N.  Y.  Law  Jour- 
nal, December  4,  1913,  supra,  page  624.  Etiam  Matter  of 
Brandreth,  28  Misc.  468-474,  supra,  page  255,  affirmed  169 
N.  Y.  437. 

MARRIAGE  TERMINATING  TRUST  ESTATE 

Matter  of  Sloane,  154  N.  Y.  109-111;  etiam  fourth  para- 
graph of  §  230. 


740  MARSHALLING    OF   ASSETS 

MARSHALLING  OF  ASSETS 
For  discussion  of,  in  non-resident  estates,  vide  supra,  page  152. 

MASONIC  HALL  AND  ASYLUM  FUND 

Legacy  to,  held  exempt  under  first  sentence  of  §  221.  Matter 
of  Allen,  76  Misc.  88. 

MASSES 

In  the  McAvoy  case,  112  App.  Div.  377  (1906),  it  was  held 
that  a  legacy  to  a  pastor  of  a  church  for  masses  was  not  exempt. 
The  statute  was  amended  later  by  chap.  706,  Laws  of  1910,  in 
effect  July  11,  1910,  by  adding  to  the  first  sentence  of  §  221  the 
words  "for  religious  ceremonies,  observances  or  commemorative 
services  of  or  for  the  deceased  donor."  The  McAvoy  case  was 
held  by  the  surrogate  of  Erie  County  not  to  apply  where  the 
legacies  "were  bequeathed  directly  to  religious  bodies."  Matter 
of  Didion,  54  Misc.  201. 

METHOD  OF  PROCEDURE 

Vide  Procedure. 

METROPOLITAN  MUSEUM  OF  ART 

Held  to  be  an  educational  corporation  and  entitled  to  exemp- 
tion under  first  sentence  of  §  221.  Matter  of  Mergentime,  129 
App.  Div.  367,  affirmed,  on  opinion  below,  195  N.  Y.  572. 
Vide  cases  cited  sub  Educational  Corporation. 

MISSIONARY  CORPORATION 

Exempt  under  first  sentence  of  §  221.  Matter  of  McCormick, 
206  N.  Y.  100.  Vide  cases  cited  sub  Exemptions. 

MOBILIA  PERSONAM  SEQUUNTUR 

The  maxim  partially  revivified  since  amendment  to  §  220  by 
Laws  1911,  chap.  732.  Vide  supra,  page  135. 

The  following  cases  relate  to  transfers  made  prior  to  the  191 1 
amendment.  Justice  Holmes  said  in  Blackstone  v.  Miller,  188 
U.  S.  189,  which  sustained  Matter  of  Blackstone,  171  N.  Y. 
682:  "We  perceive  no  better  reason  for  denying  the  right  of 
New  York  to  impose  a  succession  tax  on  debts  owed  by  its 
citizens  than  upon  tangible  chattels  found  within  the  state  at  the 
time  of  death.  The  maxim  mobilia  sequuntur  personam  has  no 


MORTGAGES  741 

more  truth  in  the  one  case  than  in  the  other.  When  logic  and 
the  policy  of  a  State  conflict  with  a  fiction  due  to  historical 
tradition,  the  fiction  must  give  way."  Vide  etiam  Matter  of 
Romaine,  127  N.  Y.  80-87;  Matter  of  Whiting,  150  id.  27-30; 
Matter  of  Clinch,  180  id.  300;  Matter  of  Daly,  100  App.  Div. 
373,  affirmed,  without  opinion,  182  N.  Y.  524;  Matter  of  Tif- 
fany, 143  App.  Div.  327-330,  affirmed,  on  opinion  below,  202 
N.  Y.  550,  appeal  pending  in  U.  S.  Supreme  Court. 

In  RESIDENT  ESTATES  maxim  applicable  even  though  it  is  not 
possible  to  collect  tax.  In  case  where  resident  died  leaving 
personal  property  in  Iowa  and  Iowa  administrator  paid  the 
Iowa  property  to  a  resident  of  Iowa,  tax  assessed  although  it 
was  held  that  New  York  administrators  were  not  liable  for  tax 
under  §  224.  Matter  of  Dingman,  66  App.  Div.  228. 

Transfers  made  since  the  1911  amendment  of  tangible  prop- 
erty without  the  state  are  not  subject  to  tax. 

MODIFYING  DECREE 

Vide  Vacating  Decree. 

MONEY 

By  the  third  sentence  of  §243  as  amended  by  Laws  1911, 
chap.  732,  money  is  defined  as  "intangible  property." 

IN  A  RESIDENT  ESTATE  money  is  subject  to  tax  wherever 
situated.  Subdivision  1  of  §  220. 

In  a  NON-RESIDENT  ESTATE  money  is  not  subject  to  tax  even 
though  within  the  state.  Subdivision  2  of  §  220.  Vide  supra, 
page  134. 

MORTGAGES 

Mortgages  should  be  deducted  from  value  of  real  estate. 
Vide  Schedule  A1  supra,  page  101. 

Mortgages  held  by  decedent  should  be  listed  in  Schedule  A3 
vide  supra,  page  109. 

As  to  mortgages  in  name  of  decedent  and  another  vide  Matter 
of  Pitou,  79  Misc.  384;  Matter  of  Reiser,  N.  Y.  Law  Journal, 
July  19,  1913,  opinion  quoted,  post,  page  804. 

As  to  BLANKET  MORTGAGE  vide  Matter  of  Tremberger,  N.  Y. 
Law  Journal,  March  7,  1912,  opinion  quoted  supra,  page  659, 
and  same  case  in  N.  Y.  Law  Journal,  October  31,  1913,  supra, 
page  661. 


742  MOTHER 

MOTHER 

Entitled  to  five  thousand  dollars  exemption  and  the  lower 
rates  of  subdivision  1  of  §  221a.  Vide  page  45. 

MOTIVE 

Vide  Evasion  of  Tax;  Intent. 

MUNICIPALITY 

Municipal  corporations  are  not  exempt.  Matter  of  Hamilton, 
148  N.  Y.  310;  etiam  footnote  to  Matter  of  Thrall,  157  N.  Y. 
46,  supra,  page  225. 

Testator  bequeathed  a  portion  of  his  estate  to  the  city  of 
Yonkers,  in  trust.  Vide  supra,  page  676,  Matter  of  Saunders, 
77  Misc.  54,  affirmed,  without  opinion,  156  App.  Div.  891. 

MUTUALLY  ACKNOWLEDGED  RELATION 

The  five  thousand  dollar  exemption  and  the  rates  of  subdivi- 
sion 1  of  §  22 la  apply  "to  any  child  to  whom  any  such  decedent, 
grantor,  donor,  or  vendor  for  not  less  than  ten  years  prior  to 
such  transfer  stood  in  the  mutually  acknowledged  relation  of  a 
parent,  provided,  however,  such  relationship  began  at  or 
before  the  child's  fifteenth  birthday  and  was  continuous  for  said 
ten  years  thereafter." 

BURDEN  OF  PROOF  is  upon  person  claiming  relationship. 
Matter  of  Davis,  98  App.  Div.  546-549,  reversed  on  other 
points  in  184  N.  Y.  299,  the  Court  of  Appeals  holding  that 
beneficiary  had  sustained  burden,  supra,  page  321. 

Prima  fade  case  uncontradicted  is  sufficient  to  shift  burden. 
Matter  of  Lane,  39  Misc.  522. 

THE  BENEFICIARY  is  A  COMPETENT  WITNESS  to  give  "evi- 
dence bearing  upon  the  question  of  the  relation  and  the  ac- 
knowledgment thereof  between  himself  and  the  testator." 
Such  testimony  is  not  inadmissible  under  §  829  of  the  Code  of 
Civil  Procedure.  Matter  of  Brundage,  31  App.  Div.  348-352. 

Legatees  were  nieces  who  sought  to  establish  "mutually 
acknowledged  relationship."  The  surrogate  said:  "There  is 
nothing  in  the  evidence  to  show  that  she  (the  testatrix)  ever 
held  them  out  to  the  public  as  her  children,  or  they  her  as  a 
mother.  *  *  *  The  acts,  conduct  and  every-day  life  and 
dealings  of  the  parties  have,  in  our  opinion,  greater  weight  in 
determining  the  relations  which  in  fact  existed  between  them 
than  mere  declarations  and  speech."  Held,  that  relationship  had 


NEPHEW    OR   NIECE 


743 


not  been  established.  Matter  of  Birdsall,  22  Misc.  180-187, 
affirmed,  without  opinion,  43  App.  Div.  624. 

May  come  within  definition  although  a  niece.  Matter  of 
Davis,  184  N.  Y.  299;  Matter  of  McMurray,  96  App.  Div.  128; 
Matter  of  Deutsch,  107  App.  Div.  192,  appeal  withdrawn  and 
surrogate's  order  affirmed  after  decision  in  Davis  case,  supra. 

UNDER  LAWS  1892,  chap.  399,  held  that  although  relationship 
began  when  "child"  was  adult,  still  was  entitled  to  exemption. 
Matter  of  Beach,  154  N.  Y.  242.  Under  present  law  relation- 
ship must  begin  at  or  before  child's  fifteenth  birthday. 

Under  Laws  1905,  chap.  368,  to  entitle  a  STEPCHILD  to  the 
exemption  under  the  then  §  221,  now  subdivision  1  of  §  22 la, 
death  of  both  parents  was  essential  prior  to  child's  fifteenth 
birthday.  Matter  of  Wheeler,  115  App.  Div.  616;  Matter  of 
Harder,  124  App.  Div.  77. 

Laws  1907,  chap.  204,  put  stepchild  in  1%  class.  Again 
amended  by  chap.  310,  Laws  1908,  so  that  exemption  depend- 
ent upon  there  being  a  mutually  acknowledged  relationship  of 
parent  and  child,  but  not  necessary  that  parents  be  dead,  as  in 
case  of  others  claiming  exemption.  The  statute  remained  in 
this  form  until  chap.  732,  Laws  1911,  in  effect  July  21,  1911, 
when  all  reference  to  stepchild  was  stricken  out,  and  there  were 
omitted  the  words,  "the  parents  of  such  child  shall  have  been 
deceased  when  such  relationship  commenced." 

NATIONAL  BANK 

In  resident  estate  stock  in  National  Bank  is  subject  to  tax. 
In  non-resident  estate  it  is  not. 

National  bank  located  in  New  York  is  a  domestic  corporation 
within  the  provisions  of  subdivision  18,  §  3343  of  the  Code  of 
Civil  Procedure,  and  prior  to  amendment  by  chap.  732,  Laws 
1911,  in  effect  July  21,  1911,  stock  held  by  non-resident  dece- 
dent was  subject  to  tax.  Matter  of  Gushing,  40  Misc.  505. 

NECESSARY  PARTIES 

As  to  who  are  necessary  parties  in  transfer  tax  proceeding  vide 
page  77. 

NEPHEW  OR  NIECE 

Entitled  to  one  thousand  dollars  exemption,  and  subject  to 
the  rates  of  tax  set  forth  in  subdivision  2  of  §  221a;  supra, 
page  47. 


744  NEW   SYSTEM   OF   TAXATION 

NEW  SYSTEM  OF  TAXATION 

Matter  of  Knoedler,  140  N.  Y,  377-380;  vide  supra,  page  2, 

NEW  YORK  HISTORICAL  SOCIETY 

An  "educational"  corporation  within  the  signification  of  the 
word  as  used  in  the  first  sentence  of  §  221.  Matter  of  t)e 
Peyster,  N.  Y.  Law  Journal,  January  21,  1913,  opinion  quoted 
supra,  page  676,  affirmed,  without  opinion,  156  App.  Div.  938. 

N.  Y.  STOCK  EXCHANGE 

In  RESIDENT  estate  a  seat  in  the  New  York  Stock  Exchange 
subject  to  the  transfer  tax.  Matter  of  Hellman,  174  N.  Y. 
254,  supra,  page  276;  Matter  of  Curtis,  31  Misc.  83. 

In  NON-RESIDENT  estate  it  is  not  subject  to  tax.  Subdivi- 
sion 2  of  §  220,  and  second  sentence  of  §  243.  Prior  to  amend- 
ment by  Laws  1911,  chap.  732,  it  was  held  that  it  was  subject 
to  tax.  Matter  of  Glendinning,  68  App.  Div.  125,  affirmed, 
without  opinion,  171  N.  Y.  684. 

NEXT  OF  KIN 

For  distribution  of  personal  property  of  decedent  in  case  of 
intestacy  vide  Decedent  Estate  Law,  §§  98-100,  supra,  page  553. 
Vide  the  last  sentence  of  §  243  of  the  Tax  Law  supra,  page  36. 

As  to  setting  forth  distribution  on  the  appraisal  vide  Sched- 
ule D,  page  94. 

As  to  RELATIVES  OF  THE  HALF  BLOOD  vide  supra,  page  46. 

RATES  OF  TAX  AND  EXEMPTIONS  supra,  page  45. 

WHERE  NEXT  OF  KIN  UNKNOWN  the  tax  is  imposed  at 
highest  rate.  Matter  of  Lind,  196  N.  Y.  570,  supra,  page  369. 

NON-PAYMENT 

Vide  Interest;  Lien  of  Tax;  Payment  of  Tax. 

NON-RESIDENT 

Transfers  made  in  non-resident  estates  subsequent  to  the 
amendment  of  §§  220  and  243  by  Laws  1911,  chap.  732,  supra, 
page  526,  are  not  taxable  unless  they  are  "of  tangible  property 
within  the  state."  For  discussion  of  present  law  and  practice 
vide  supra,  page  133. 

The  decisions  regarding  transfers  in  non-resident  estates 
prior  to  the  1911  amendment  are  cited  sub  Bank  Deposit; 
Bonds;  Chose  in  Action;  Deductions;  Election;  Joint-Stock 


NON-RESIDENT  745 

Association;  Laws  of  Another  State  or  Country;  Legacy;  Life 
Insurance;  National  Bank;  New  York  Stock  Exchange;  Partner- 
ship; Pledged  Securities;  Power  of  Appointment;  Promissory 
Notes;  Residence;  Stock;  Surrogate;  Transfer  of  Securities; 
Treaty. 

The  more  important  decisions  under  the  various  statutes 
prior  to  the  1911  amendment  are  as  follows: 

LAWS  OF  1885,  chap.  483,  in  effect  June  30,  1885,  supra, 
page  404.  Matter  of  Enston,  113  N.  Y.  174,  supra,  page  165; 
Matter  of  James,  144  id.  6-10. 

LAWS  OF  1887,  chap.  713,  in  effect  June  25,  1887,  supra, 
page  413.  Matter  of  Sherwell,  125  N.  Y.  376,  supra,  page  168; 
Matter  of  Romaine,  127  id.  80;  Matter  of  James,  144  id.  6; 
Matter  of  Embury,  154  id.  746,  supra,  page  222;  Matter  of 
Gibbes,  176  id.  565,  supra,  page  283;  Matter  of  Crerar,  56  App. 
Div.  479. 

LAWS  OF  1891,  chap.  215,  in  effect  April  20,  1891.  Matter  of 
Phipps,  143  N.  Y.  641,  supra,  page  190;  Matter  of  Pettit,  171 
N.  Y.  654,  supra,  page  266;  Matter  of  Lord,  186  id.  549,  sus- 
tained in  211  U.  S.  477,  sub  nom.  Beers  v.  Glynn,  supra,  page 
332. 

LAWS  OF  1892,  chap.  399,  in  effect  May  1,  1892,  supra, 
page  424.  Matter  of  Bronson,  150  N.  Y.  1,  supra,  page  204; 
Matter  of  Whiting,  id.  27;  supra,  page  205;  Matter  of  Morgan, 
id.  35,  supra,  page  206;  Matter  of  Fitch,  160  id.  87,  supra, 
page  206;  Matter  of  Hubbard,  21  Misc.  566. 

SUBSEQUENT  TO  LAWS  1892  AND  PRIOR  TO  1911  AMENDMENT. 
Matter  of  Zefita,  167  N.  Y.  280,  supra,  page  251;  Matter  of 
Blackstone,  171  N.  Y.  682;  Matter  of  Glendinning,  id.  684; 
Matter  of  Newcomb,  172  N.  Y.  608;  Matter  of  King,  id.  616; 
Matter  of  Bushnell,  id.  649;  Matter  of  Gibbes,  176  N.  Y. 
565;  Matter  of  Clinch,  180  id.  300;  Matter  of  Hewitt,  181  id. 
547;  Matter  of  Daly,  182  id.  524;  Matter  of  Tilt,  id.  557;  Matter 
of  Cooley,  186  N.  Y.  220;  Matter  of  Gordon,  id.  471;  Matter  of 
Bishop,  188  N.  Y.  635;  Matter  of  Rhoads,  190  id.  525;  Matter 
of  Thayer,  193  id.  430;  Matter  of  Grosvenor,  id.  652;  Matter  of 
Browne,  195  id.  522;  Matter  of  Fearing,  200  id.  340;  Matter  of 
Whiting,  id.  520;  Matter  of  Tiffany,  202  N.  Y.  550,  appeal  pend- 
ing in  United  States  Supreme  Court. 

Matter  of  Pullman,  46  App.  Div.  574;  Matter  of  Preston,  75 
id.  250;  Matter  of  Bishop,  82  id.  112;  Matter  of  Hutchinson, 
105  id.  487;  Matter  of  Arnold,  114  id.  244;  Matter  of  White, 


746  NOTES 

116  id.  183;  Matter  of  Hillman,  id.  186;  Matter  of  Porter,  67 
Misc.  19,  affirmed,  without  opinion,  148  App.  Div.  896;  Matter 
of  Willmer,  153  App.  Div.  804. 

Matter  of  Hathaway,  27  Misc.  474;  Matter  of  Abbett,  29  id. 
567;  Matter  of  Leopold,  35  id.  369;  Matter  of  Horn,  39  id.  133; 
Matter  of  Probst,  40  id.  431;  Matter  of  Gushing,  id.  505;  Matter 
of  McEwan,  51  id.  455;  Matter  of  Ames,  141  N.  Y.  Supp.  793; 
etiam  opinion  of  state  comptroller,  1  State  Department  Reports, 
605,  quoted  supra,  page  152. 

NOTES 

Vide  Promissory  Notes. 

NOTICE  OF  APPEAL 

The  notice  of  appeal  "shall  state  the  grounds  upon  which 
the  appeal  is  taken."  First  sentence  of  §  232;  Matter  of  Stone, 
56  Misc.  247,  and  cases  cited  sub  Appeal. 

NOTICE  OF  APPRAISAL 

The  third  sentence  of  §  230  provides  that  the  appraiser  shall 
give  notice  of  appraisal  and  §  231  that  "the  Surrogate  shall 
immediately  give  notice  upon  the  determination  by  him  as  to 
the  value  of  any  estate  *  *  *  to  all  persons  known  to  be 
interested  therein." 

Notice  should  be  explicit  as  to  property  to  be  appraised,  vide 
page  79. 

For  general  discussion  vide  page  77. 

Not  bound  unless  notice  duly  given.  Matter  of  McPherson, 
104  N.  Y.  30&-321;  Matter  of  Wolfe,  137  N.  Y.  205-213;  Matter 
of  Backhouse,  1 10  App.  Div.  737,  affirmed,  without  opinion,  185 
N.  Y.  544;  Matter  of  Winters,  21  Misc.  552-555;  Matter  of 
Bolton,  35  Misc.  688. 

VOLUNTARY  APPEARANCE  before  appraiser  and  submission  to 
examination  as  witness  held  to  cure  failure  of  appraiser  to  give 
notice  required  by  §  230.  Matter  of  Harriott,  N.  Y.  Law 
Journal,  March  1,  1913. 

The  surrogate  did  not  give  notice  of  the  determination  by 
him  as  required  under  §  231,  and  although  the  sixty  days  under 
§  232  to  appeal  had  expired,  the  surrogate  held  that  he  had 
authority  under  §  2481,  subdivision  6  of  Code  of  Civil  Procedure 
to  modify  decree.  Matter  of  Daly,  34  Misc.  148. 

Comptroller  claimed  that  a  certain  transfer  of  real  estate  was 


ORDER  747 

subject  to  tax  on  ground  that  it  had  been  made  by  decedent  in 
contemplation  of  her  death.  The  surrogate  held  that  the  ques- 
tion should  not  be  passed  upon  without  notice  to  the  grantee  of 
the  property,  and  remitted  the  report  to  appraiser.  Matter  of 
Wood,  40  Misc.  155. 

Notice  of  application  to  exempt  estate  from  tax  should  be 
given  to  state  comptroller.  Matter  of  Collins,  104  App.  Div. 
184;  Matter  of  Schmidt,  39  Misc.  77.  The  state  comptroller 
is  entitled  to  notice  of  appraisal  under  §§  230  and  231. 

OBJECTIONS 

Vide  Testimony  post,  page  854. 

OBSOLETE  SECURITIES 

Vide  Worthless  Securities. 

OCCUPATION  OF  DECEDENT 

Should  be  set  forth  in  Schedule  A3,  supra,  page  105. 

OFFSET 

Vide  Pledged  Securities. 

OPENING  DECREE 

Vide  Vacating  Decree. 

OPPORTUNITY  TO  BE  HEARD 

Vide  Notice  of  Appraisal;  etiam  supra,  page  77. 

ORDER 

Vide  Forms.    Vide  third  sentence  of  §  231,  page  19. 

"While,  for  convenience,  the  taxes  upon  separate  interests 
passing  under  the  will  are  included  in  a  single  order,  the  judg- 
ments nevertheless  are  separate  and  independent.  The  rights 
and  obligations  of  the  different  beneficiaries  are  disconnected 
and  hi  no  way  mutual  or  joint."  Matter  of  Bogert,  25  Misc. 
466. 

Surrogate's  order  denying  motion  to  resettle  his  first  order 
held  not  appealable  to  Appellate  Division  because  "it  rested 
entirely  within  the  discretion  of  the  Surrogate  whether  or  not 
he  would  change  his  order  as  originally  made."  Matter  of 
Sondheim,  69  App.  Div.  5.  Vide  Matter  of  Francis,  N.  Y.  Law 
Journal,  November  26,  1913,  post,  page  886. 


748  OUTLAWED 

Should  assess  separately  immediate  cash  legacy  and  interest  in 
trust.  Matter  of  Guggenheim,  189  N.  Y.  561,  supra,  page  347. 

As  to  exemption  to  beneficiary  vide  Matter  of  Title  Guarantee 
&  Trust  Co.,  81  Misc.  106. 

Testatrix  in  her  will  "forgave"  one-half  of  certain  notes  she 
held  against  the  estate  of  her  brother.  The  order  assessed  the 
tax  against  the  beneficiary  of  her  brother's  estate^  Held,  error 
and  that  the  tax  should  have  been  assessed  against  the  executrix 
of  the  brother's  estate.  Matter  of  Wood,  40  Misc.  155. 

TEMPORARY  ORDER  shall  be  entered  when  the  tax  has  been 
imposed  at  the  highest  rate  in  accordance  with  the  provisions 
of  the  sixth  paragraph  of  §  230.  Vide  opinion  of  state  comp- 
troller cited  sub  Interest. 

OUTLAWED 

Debts  of  decedent  barred  by  statute  of  limitations,  page  131. 
As  to  tax  vide  §  245  and  cases  cited  sub  Statute  of  Lim- 
itations. 

OVERDUE  TAXES 

Vide  Interest;  Payment  of  Tax. 

OVERPAYMENT  OF  TAX 

Vide  Interest;  Payment  of  Tax;  Refund. 

OWNERSHIP  OF  PROPERTY 

Vide  Compromise  of  Claim;  Contemplation  of  Death;  Gift; 
Property  Held  in  Trust  or  Jointly;  Trust  Deed. 

"The  identification  of  the  property  as  property  belonging 
to  a  person  deceased  at  the  time  of  his  death,  or  transferred  by 
him  in  contemplation  of  death,  must  necessarily  precede  its 
valuation  for  the  purposes  of  the  transfer  tax.  The  appraiser 
could  not  proceed  with  the  appraisal  of  property  as  a  basis  for 
the  imposition  of  a  tax  in  a  particular  estate,  unless  it  was  made 
to  appear  in  some  way  that  such  property  constituted  a  part  of 
the  estate  to  be  appraised.  It  would  therefore  seem  that  if  any 
question  arises  in  the  course  of  the  appraisal  as  to  the  ownership 
of  the  property  or  the  right  or  title  to  it,  the  appraiser  should 
have  jurisdiction  to  determine  such  questions  in  the  first  instance 
before  proceeding  with  the  actual  appraisal  of  the  property." 
Matter  of  Cora  F.  Barnes,  N.  Y.  Law  Journal,  December  17, 
1913.  The  surrogate  in  this  estate  appointed  a  referee  to  hear 


OWNEESHIP   OF   PROPERTY  749 

and  report.  As  the  surrogate  decided  that  the  appraiser  had 
jurisdiction,  it  is  not  quite  plain  from  the  opinion  why  the  matter 
was  referred  to  a  referee. 

EVIDENCE  NECESSARY  in  a  transfer  tax  proceeding  hi  order 
to  establish  a  gift  inter  vivos  discussed  in  Matter  of  Loewi, 
75  Misc.  57. 

Where  ownership  of  property  by  decedent  is  shown  to  have 
existed  several  years  prior  to  death,  the  executors  have  burden 
of  showing  that  the  property  has  not  come  into  their  hands. 
They  also  are  under  duty  to  furnish  to  appraiser  all  informa- 
tion they  have  on  the  subject  which  may  be  beneficial  to  the 
State.  Refusal  to  answer  material  questions  is  punishable  by 
contempt  proceedings.  Matter  of  David  Kennedy,  113  App. 
Div.  4-9. 

IN  ACTION  TO  CONSTRUE  WILL  it  was  held  that  decedent  did 
not  own  property  which  had  previously  been  taxed  in  transfer 
tax  proceedings.  "Both  the  transfer  tax  appraiser  and  the 
surrogate  assumed  as  a  fact  that  the  testator  owned  this  prop- 
erty. No  question  as  to  title  was  raised  or  litigated  or  was 
specifically  passed  upon."  The  court  directed  that  the  order  be 
modified  by  striking  from  it  the  tax  on  the  property  which  dece- 
dent did  not  own,  and  that  the  tax  be  refunded.  Matter  of 
Willets,  119  App.  Div.  119,  affirmed,  without  opinion,  190 
N.  Y.  527. 

SECURITIES  IN  SAFE  DEPOSIT  Box.  In  Matter  of  Harry  M. 
Francis,  N.  Y.  Law  Journal,  August  12,  1913,  Surrogate  Cohalan 
said:  "The  executrix  of  the  estate  of  Harry  M.  Francis,  deceased, 
appeals  from  the  order  fixing  tax  and  alleges  that  the  appraiser 
erred  in  including  in  the  taxable  assets  of  the  estate  the  value  of 
certain  securities  claimed  by  the  executrix  to  be  her  individual 
property.  The  decedent  died  on  the  8th  day  of  May,  1911,  a 
resident  of  New  York  County.  The  executrix,  Mary  B.  Francis, 
is  his  widow.  The  testimony  taken  before  the  appraiser  shows 
that  prior  to  1909  there  was  a  pocketbook  marked  'Property 
of  Mary  B.  Francis'  in  a  compartment  of  the  loan  vault  in  the 
Morton  Trust  Company  of  the  City  of  New  York.  This  com- 
partment was  not  rented  in  the  name  of  any  individual,  but  the 
decedent,  as  an  officer  of  the  trust  company,  had  access  to  it. 
In  the  pocketbook  were  certificates  of  stock,  unregistered  bonds 
and  certificates  of  deposit.  Attached  to  the  stock  certificates 
were  transfer  powers  executed  to  Mary  B.  Francis.  The  cer- 
tificates of  deposit  also  were  in  the  name  of  Mary  B.  Francis, 


750  OWNERSHIP   OF    PROPERTY 

No  evidence  was  adduced  before  the  appraiser  to  show  when  the 
securities  were  placed  in  the  pocketbook  or  by  whom  they  were 
placed  there. 

"The  executrix,  however,  claims  that  the  securities  belonged 
to  her.  The  testimony  taken  before  the  appraiser  shows  that 
on  certain  occasions  when  the  decedent  found  it  necessary  to 
leave  the  city  he  gave  the  key  of  the  compartment  in  which  the 
pocketbook  was  placed  to  James  I.  Burke,  informing  him  at  the 
same  time  that  the  securities  belonged  to  Mrs.  Francis  and 
directing  him  to  deliver  them  to  her  if  she  demanded  them. 
Burke  was  a  mutual  friend  of  decedent  and  his  wife  and  an 
officer  of  the  Morton  Trust  Company.  It  also  appears  that  on 
several  occasions  when  Burke  called  at  the  residence  of  the 
decedent  and  his  wife,  the  decedent,  addressing  his  wife,  said: 
'Mary,  Jimmy  has  all  your  securities,'  and  Burke  replied: 
'Yes,  I  have  them  downtown.'  From  November,  1909,  until 
after  decedent's  death  Burke  retained  possession  of  the  secu- 
rities. He  delivered  them  to  Mary  B.  Francis  after  the  death 
of  decedent. 

"It  is  difficult  to  perceive  upon  what  theory  these  securities 
can  be  considered  the  property  of  the  decedent.  The  fact  that 
they  were  in  a  pocketbook  which  had  indorsed  thereon  the 
declaration  that  the  property  therein  contained  was  the  property 
of  Mary  B.  Francis  raises  a  presumption  that  Mary  B.  Francis 
was  the  owner  of  the  securities.  It  was  incumbent  upon  the 
State  Comptroller  to  rebut  this  presumption  by  showing  she 
was  not  the  owner  of  the  property,  but  that  the  decedent  was 
the  owner  thereof.  The  only  witness  examined  before  the 
appraiser  confirmed  this  presumption  of  ownership  in  Mary  B. 
Francis  by  stating  that  the  decedent  declared  in  his  presence 
and  in  the  presence  of  decedent's  wife  that  the  securities  were 
the  property  of  Mary  B.  Francis,  and  that  the  witness  was  hold- 
ing them,  i.  e.,  taking  care  of  them  for  her.  The  placing  of  his 
wife's  securities  in  a  safe  deposit  compartment  owned  by  the 
company  of  which  he  was  an  officer  was  not  such  an  unusual 
proceeding  so  contrary  to  experience  and  recognized  custom  as 
to  raise  a  presumption  that  the  property  belonged  to  the  hus- 
band and  not  to  his  wife.  But  when  after  placing  the  securities 
in  such  a  compartment  he  indorsed  on  the  receptacle  in  which 
they  were  placed  a  declaration  that  the  property  belonged  to  his 
wife,  there  is  no  longer  any  room  for  conjecture  as  to  the  owner- 
ship of  the  property. 


PARENTS  751 

"The  absence  of  proof  that  the  property  at  any  time  belonged 
to  the  decedent  eliminates  all  consideration  of  the  question  of  a 
gift.  That  would  only  be  pertinent  if  it  were  made  to  appear 
that  the  property  originally  placed  in  the  pocketbook  belonged 
to  the  decedent  and  not  to  his  wife.  The  indorsement  on  the 
pocketbook  and  the  declaration  of  the  decedent  that  the  secu- 
rities belonged  to  his  wife  are  inconsistent  with  a  presumption 
of  ownership  in  the  decedent. 

"In  order  to  justify  the  imposition  of  a  transfer  tax  upon  the 
securities  contained  in  the  pocketbook  it  was  necessary  for  the 
State  Comptroller  to  prove  that  they  were  the  property  of  the 
decedent  at  the  time  of  his  death  or  that  they  had  been  given 
by  the  decedent  to  his  wife  as  a  gift  in  contemplation  of  death 
or  intended  to  take  effect  at  or  after  death.  The  State  Comp- 
troller failed  to  produce  such  proof  or  to  sustain  the  burden  im- 
posed on  him  of  showing  that  the  property  was  subject  to  the 
provisions  of  the  Transfer  Tax  Law.  The  order  fixing  tax  will 
therefore  be  modified  by  eliminating  from  the  taxable  assets 
of  the  decedent's  estate  the  value  of  the  securities  contained  in 
the  pocketbook  above  referred  to."  Vide  post,  page  886. 

Vide  etiam  MATTER  OF  LAWRENCE,  N.  Y.  Law  Journal, 
February  15,  1913,  opinion  quoted  supra,  page  701. 

Vide  supra,  page  68,  as  to  practice  relative  to  inventory  of 
contents  of  safe  deposit  box. 

THE  HUSBAND  OF  DECEDENT  was  a  member  of  a  partnership 
and  allowed  his  profits  to  remain  in  the  firm's  business,  opening 
a  special  account,  which  account  he  had  transferred  to  his 
wife's  name.  When  his  wife  died  the  account  was  still  in  her 
name,  and  the  surrogate  held  that  the  ownership  of  it  was  in 
wife,  and  taxable  in  her  estate.  Matter  of  Anthony,  40 
Misc.  497. 

STOCK  stood  in  name  of  decedent's  wife  and  had  been  pledged 
as  collateral  security  for  two  notes  made  by  her,  the  proceeds 
of  the  two  notes  having  been  paid  to  husband.  In  the  absence 
of  any  other  evidence  the  court  held  that  the  state  comptroller's 
contention  that  the  stock  belonged  to  husband  and  was  taxable 
in  his  estate  was  not  good.  Matter  of  Parsons,  51  Misc.  370- 
372,  affirmed,  117  App.  Div.  321. 

PARENTS 

Each  entitled  to  five  thousand  dollars  exemption  and  min- 
imum rates  of  subdivision  1  of  §  22 la;  supra,  page  45. 


752  PARTIES 

PARTIES 

Vide  supra,  page  77. 

PARTNERSHIP 

(1)  Interest      in      copartnership  (4)  Notice  to  comptroller  under 

assets  without  the  state.  §  227. 

(2)  Real  estate  held  by  partner-          (5)  Non-resident  estate  prior  to 

ship.  1911  amendment. 

(3)  Partnership  agreement. 

Interest  of  resident  decedent  in  partnership  should  be  set 
forth  in  Schedule  A5  supra,  page  117. 

HUSBAND  allowed  his  profits  to  remain  in  his  firm,  opening  a 
special  account  in  the  partnership  books.  This  account  he 
transferred  to  the  name  of  his  wife,  and  it  so  continued  until  her 
death.  Held,  that  it  was  part  of  her  estate,  and  subject  to  tax 
in  her  estate.  Matter  of  Anthony,  40  Misc.  497. 

(1)  Interest  in  copartnership  assets  without  the  State 

For  discussion  of,  vide  opinion  of  state  comptroller  in  Matter 
of  Dusenberry,  2  State  Department  Reports,  501,  supra, 
page  119. 

(2)  Real  estate  held  by  partnership 

IN  MATTER  OF  LAZARUS  STRAUS,  N.  Y.  Law  Journal,  Octo- 
ber 9,  1911,  an  application  was  made  by  the  executors  for  an 
order  modifying  the  order  fixing  tax  on  the  ground  that  there 
should  be  deducted  from  the  assets  of  decedent's  estate  the  value 
of  his  interest  in  certain  real  estate  owned  by  the  partnership  of 
which  he  was  a  member  at  the  time  of  his  death.  Surrogate  Co- 
halan  in  denying  the  application,  said:  "The  decedent,  who  was 
a  member  of  the  firm  of  L.  Straus  &  Sons,  died  in  January,  1898, 
leaving  a  will  by  which  he  devised  and  bequeathed  the  greater 
part  of  his  estate  to  his  children.  The  partnership  owned  several 
pieces  of  real  estate  in  the  State  of  New  York,  and  as  the  dece- 
dent died  prior  to  the  enactment  of  chap.  41  of  the  Laws  of  1903, 
imposing  a  tax  upon  the  transfer  of  real  estate  to  lineals,  the 
executor  now  contends  that  the  interest  of  decedent  in  the  real 
estate  held  by  the  firm  is  not  subject  to  taxation  under  the  pro- 
visions of  the  Transfer  Tax  Law.  The  appraiser  who  was 
designated  to  appraise  the  estate  estimated  the  value  of  dectv 
dent's  interest  in  the  partnership  of  L.  Straus  &  Sons  at  the  sum 
of  $823,313.17,  this  being  the  amount  at  which  his  interest  was 


PARTNERSHIP  753 

carried  on  the  private  ledger  of  the  firm.  There  was  an  agree- 
ment between  the  partners  of  L.  Straus  &  Sons  that  if  any  mem- 
ber of  the  firm  died  or  retired  his  executors  or  representatives 
should  receive  for  his  interest  in  the  partnership  the  amount 
standing  to  his  credit  on  the  private  ledger  of  the  firm,  together 
with  interest  at  the  rate  of  6  per  cent. 

"After  the  death  of  the  decedent  herein  there  was  no  partner- 
ship accounting  or  liquidation  of  partnership  assets,  and  the 
interest  of  decedent  in  the  partnership,  as  shown  by  the  private 
ledger,  was  transferred  on  the  books  of  the  firm  to  the  other 
members  of  the  partnership  who  were  the  beneficiaries  under  de- 
cedent's will.  Therefore  the  interest  of  decedent  in  the  partner- 
ship of  L.  Straus  &  Sons  under  the  terms  of  the  partnership 
agreement  already  referred  to  consisted  upon  his  decease  of  a 
claim  against  the  surviving  partners  in  the  sum  appearing  to  his 
credit  in  the  private  ledger  of  the  partnership,  namely, 
$823,313.17.  His  interest  in  the  real  estate  held  by  the  firm  was 
included  in  the  aggregate  amount  represented  by  this  claim  and 
passed  to  his  executors  as  personalty  (McFarlane  v.  McFarlane, 
82  Hun,  238;  Fairchild  v.  Fairchild,  64  N.  Y.  471;  Van  Brocken 
v.  Smeallie,  140  N.  Y.  70;  Darrow  v.  Calkins,  154  N.  Y.  503)." 

(3)  Partnership  agreement 

PARTNERSHIP  NOT  A  LEGAL  JOINT  TENANCY  where  "it  was 
only  the  intention  of  the  parties  to  bring  such  property  as 
might  then  or  thereafter  be  held  in  the  joint  name  or  the  in- 
dividual name  of  either  of  them  into  that  joint  ownership  which 
is  characteristic  of  a  copartnership  relation."  Matter  of 
Wormser,  51  App.  Div.  441-444. 

IN  MATTER  OF  VIETOR,  N.  Y.  Law  Journal,  May  8,  1913, 
opinion  quoted  sub  Good  Will,  page  714,  was  discussed  the 
effect  of  partnership  AGREEMENT  RELATIVE  TO  GOOD  WILL 
belonging  exclusively  to  surviving  partners.  Vide  etiam  Matter 
of  Vivanti,  206  N.  Y.  656,  supra,  page  387. 

For  discussion  of  §  20  of  PARTNERSHIP  LAW,  vide  Slater  v. 
Slater,  175  N.  Y.  143. 

(4)  Notice  to  comptroller  under  §  227 

The  state  comptroller  handed  down  an  opinion,  dated  Febru- 
ary 21,  1913,  2  State  Department  Reports,  496,  as  follows: 
"The  department  is  of  the  opinion  that  it  is  the  duty  of  every 
bank  or  other  depositary  to  give  the  comptroller  the  notice, 
48 


754  PARTNERSHIP 

under  section  227  of  the  Tax  Law,  whenever  the  bank  is  called 
upon  to  TRANSFER  THE  FUNDS  DEPOSITED  IN  THE  NAME  OF  A 
PARTNERSHIP,  if  one  of  the  partners  is  deceased  at  the  tune  such 
application  is  made.  The  same  ruling  would  apply  where  a 
SAFE  DEPOSIT  Box  was  rented  in  the  name  of  the  partnership 
and  one  of  the  partners  dies,  relative  to  allowing  the  comp- 
troller, personally  or  by  representative,  to  examine  the  contents 
of  such  box. 

"It  is  true  that  the  text  of  section  227  of  the  Tax  Law  does 
not  refer  specifically  to  securities,  deposits  or  assets  belonging  to 
or  standing  in  a  firm  name  or  partnership,  but  from  a  careful 
reading  of  section  227  of  the  Tax  Law  as  a  whole  the  intent  is 
clear  that  the  section  is  not  applicable  until  the  death  of  the 
owner  or  depositor,  or  until  the  death  of  one  of  the  joint  owners 
or  depositors. 

"Upon  the  happening  of  that  event  the  account  must 
stand  either  '  in  the  name  of  a  decedent  (if  an  individual  ac- 
count) *  *  *  or  in  the  joint  names  of  such  a  decedent  and 
one  or  more  persons  (if  the  account  stands  in  the  name  of  two  or 
more  persons).'  And  if  the  deposit  is  in  the  name  of  a  firm  or 
partnership  and  one  of  the  members  dies,  I  believe  the  event  has 
happened  which  makes  the  provisions  of  section  227  applicable 
to  such  an  account,  thereby  imposing  upon  the  bank  or  other 
depositary  the  requirements  set  forth  in  section  227  of  the  Tax 
Law  before  the  account  can  be  transferred." 

See,  however,  recent  decision  of  Appellate  Division  in  People 
v.  Mercantile  Safe  Deposit  Company,  opinion  quoted  post, 
page  837. 

PROCEDURE  discussed  supra,  page  64. 

(5)  Non-resident  estates  prior  to  1911  amendment 
PRESENT  LAW  relative  to  non-resident  estate,  supra,  page  133. 
IN  MATTER  OF  EDMUND  S.  CLARK,  N.  Y.  Law  Journal, 
February  9,  1912,  the  interest  of  a  non-resident,  who  died  prior 
to  the  1911  amendment,  in  a  partnership  having  a  place  of  busi- 
ness in  this  State  was  held  taxable.  Contribution  of  resident 
special  partner  should  be  deducted  from  the  New  York  assets  in 
the  proportion  which  the  New  York  assets  bear  to  the  entire  as- 
sets of  the  partnership.  Surrogate  Fowler  in  his  opinion  said : 
"This  appeal  is  taken  by  the  State  Comptroller  from  the  order 
assessing  a  tax  upon  the  estate  of  Edmund  S.  Clark,  who  died  on 
the  28th  day  of  May,  1907,  a  resident  of  Massachusetts.  Up  to 


PARTNERSHIP  755 

the  time  of  his  death  he  was  a  member  of  the  partnership  known 
as  Danforth,  Clark  &  Co.,  whose  principal  place  of  business 
was  in  Boston,  Massachusetts.  The  firm  had  branch  offices  in 
Chicago  and  in  the  City  of  New  York.  On  the  day  of  decedent's 
death  the  firm  had  at  its  branch  office  hi  the  City  of  New  York  a 
stock  of  goods  valued  by  the  executors  herein  at  $105,000. 
There  were  also  collectible  accounts  due  the  firm  from  New 
York  debtors  amounting  to  $26,174.65.  The  partnership  owed 
New  York  creditors,  $36,868.77,  leaving  net  assets  in  the  State 
of  New  York  amounting  to  $94,306.88.  The  surviving  members 
of  the  partnership  were  residents  of  Massachusetts,  but  the 
special  partner,  whose  contribution  to  the  partnership  was  the 
sum  of  $100,000,  was  a  resident  of  the  State  of  New  York. 

"Under  the  articles  of  copartnership  the  decedent  was  en- 
titled to  seven-tenths  of  the  net  assets  of  the  firm,  and  it  is 
alleged  by  the  executors  that  the  value  of  this  interest  was  the 
sum  of  $125,000.  The  appraiser  reported  that  the  interest  of  the 
decedent  in  the  partnership  assets  in  this  State  is  not  subject  to 
the  provisions  of  the  Transfer  Tax  Law,  and  from  the  order 
entered  on  his  report  this  appeal  is  taken. 

"Decedent  having  died  hi  1907  the  taxation  of  his  estate  in 
the  State  of  New  York  is  governed  by  the  statute  in  effect  at 
that  time  (Matter  of  Davis,  149  N.  Y.  539).  This  statute 
provided  that  personal  property  owned  by  a  non-resident  and 
invested  or  habitually  kept  in  the  State  of  New  York  was 
taxable  (chap.  399,  Laws  of  1892;  Matter  of  Romaine,  127 
N.  Y.  80;  Matter  of  Phipps,  143  N.  Y.  641).  The  executors 
contend  that  the  cases  above  cited  do  not  apply  to  the  matter 
under  consideration,  because  they  determined  the  taxability  of 
property  owned  by  non-residents  individually,  while  this  matter 
involves  the  question  of  the  taxability  of  decedent's  interest  in  a 
partnership  having  assets  here  at  the  time  of  the  decedent's 
death.  It  is  true  that  the  legal  title  to  the  partnership  property 
in  this  State  vested  upon  the  death  of  the  decedent  in  the  sur- 
viving partners  for  the  purpose  of  liquidation,  and  that  the 
right  of  the  legal  representatives  of  the  deceased  partner  in  the 
assets  was  an  equitable  right  to  the  decedent's  share  of  what  was 
left  after  the  payment  of  the  partnership  debts  (Rheinhart  v. 
Rheinhart,  134  App.  Div.  440;  Joseph  v.  Herzig,  198  N.  Y.  456) ; 
but  it  is  alleged  in  the  affidavit  submitted  by  the  executors  that 
the  net  value  of  the  partnership  assets  in  this  State  was  the  sum 
of  $94,306.88,  and  that  the  legal  representatives  of  the  decedent 


756  PARTNERSHIP 

were  entitled  to  seven-tenths  of  this  amount,  subject  to  any 
claims  of  partnership  creditors  in  other  States  which  remained 
unsatisfied  after  the  application  of  the  partnership  property  in 
those  States  to  the  payment  of  the  partnership  indebtedness. 
When  the  value  of  this  interest  was  actually  ascertained  and 
definitely  determined  its  transfer  became  taxable  in  the  same 
manner  and  to  the  same  extent  as  if  the  property  had  belonged 
to  the  decedent  individually  at  the  time  of  his  death  (Matter  of 
Clinch,  180  N.  Y.  300).  For  the  purpose  of  ascertaining  the 
value  of  this  interest  debts  due  by  the  partnership  to  New  York 
creditors  must  first  be  deducted  from  the  firm  assets  located 
here  (Matter  of  King,  71  App.  Div.  581,  aff'd  172  N.  Y.  616). 
There  does  not,  however,  seem  to  be  any  authority  for  holding 
that  the  general  indebtedness  of  a  partnership  to  creditors  in 
different  States  should  all  be  deducted  from  the  New  York 
assets;  it  would  seem  to  be  more  equitable  and  reasonable  to 
deduct  from  the  net  assets  in  New  York  that  proportion  of  the 
general  indebtedness  of  the  partnership  to  foreign  creditors 
which  the  New  York  assets  bear  to  the  entire  assets  of  the 
partnership  (Matter  of  Porter,  67  Misc.  19,  affirmed,  148  App. 
Div.  896). 

"The  executors  also  contend  that  the  contribution  of  the 
special  partner  constitutes  an  indebtedness  of  the  firm  to  a  New 
York  creditor,  and  that  the  amount  should  be  deducted  in  full 
from  the  New  York  assets.  A  special  partner  in  a  limited 
partnership  is  not  entitled  to  payment  of  his  contribution  until 
the  claims  of  all  the  partnership  creditors  are  satisfied  (§  37, 
Partnership  Law),  and  if  payment  is  made  to  him  after  dis- 
solution of  the  firm,  but  before  all  the  creditors  are  paid,  the 
amount  so  paid  to  him  may  be  reached  by  a  creditor  of  the 
partnership  who  has  exhausted  his  remedies  against  the  partner- 
ship assets  (Forman  v.  Von  Pusbau,  126  App.  Div.  629).  The 
interest  of  a  special  partner  is  not  strictly  a  debt  at  all  (Harris 
v.  Murray,  28  N.  Y.  547;  Hayes  v.  Meyer,  35  N.  Y.  226).  Up 
to  the  time  of  dissolution  a  special  partner  is  not  a  creditor  of 
the  firm  in  any  sense  (Matter  of  Price-McCormick  Co.,  (>0 
App.  Div.  37).  It  would  therefore  appear  that  the  special 
partner  is  not  a  New  York  creditor  within  the  meaning  of  the 
decision  in  the  Matter  of  King  (supra)  directing  that  debts  due 
to  New  York  creditors  should  be  deducted  in  full  from  New 
York  assets  for  the  purpose  of  ascertaining  the  value  of  dece- 
dent's interest  in  the  copartnership,  but  that  the  special  part- 


PAYMENT  OF  TAX  757 

ner's  claim  is  one  against  the  entire  assets  of  the  partnership 
wheresoever  situated,  and  should  only  be  deducted  from  the  New 
York  assets  in  the  proportion  which  the  net  New  York  assets 
bear  to  the  entire  assets  of  the  partnership. 

"The  order  fixing  tax  will  be  reversed  and  the  appraiser's 
report  remitted  to  him  for  correction  as  indicated." 

As  to  PROFITS  PERMITTED  TO  REMAIN  ON  DEPOSIT  with  firm 
vide  Matter  of  Probst,  40  Misc.  431. 

PATRIOTIC  CORPORATION  OR  ASSOCIATION 

Entitled  to  the  exemptions  under  the  second  sentence  of 
§  221,  vide  supra,  page  41. 

PAYMENT  OF  TAX 

(1)  To  whom  payment  made.  (6)  Annuities. 

(2)  By  whom  paid.  (7)  Real  estate. 

(3)  When  payable  from  residuary       (8)  Enforcement  of  payment. 

estate.  (9)  Tax  should  be  assessed  although 

(4)  Discount    and    interest    under  payment  cannot  be  enforced. 

§  223.  (10)  Final  accounting. 

(5)  Tax  payable  from  corpus,  not      (11)  Return  of  overpayment. 

income. 

(1)  To  whom  payment  made 

Payment  of  tax  must  be  made  to  state  comptroller  in  the 
seventeen  counties  of  Albany,  Bronx,  Dutchess,  Erie,  Kings, 
Monroe,  Nassau,  New  York,  Niagara,  Oneida,  Onondaga, 
Orange,  Queens,  Rensselaer,  Richmond,  Suffolk  and  West- 
chester. 

In  all  other  counties  the  tax  must  be  paid  to  the  County 
Treasurer.  Sections  222  and  229;  People  ex  rel.  Lown  v.  Cook, 
158  App.  Div.  74,  affirmed,  without  opinion,  209  N.  Y.  mem. 

(2)  By  whom  paid 

Section  224,  supra,  page  8,  governs. 

'  Though  the  administrator  or  executor  is  required  to  pay  the 
tax,  he  pays  it  out  of  the  legacy  for  the  legatee,  not  on  account 
of  the  estate."  Matter  of  Gihon,  169  N.  Y.  443-447;  Matter 
of  Swift,  137  N.  Y.  77-82. 

As  to  trust  or  life  estates  vide  post,  page  761,  etiam  cases  cited 
sub  POWER  OF  APPOINTMENT,  post,  page  768,  and  sub  REMAIN- 
DERS, post,  page  817. 

"Although  the  executor  is  required  to  pay  the  tax,  he  pays 


758  PAYMENT   OF  TAX 

it,  not  for  the  account  of  the  estate,  and  as  a  deduction  from  the 
legacy,  but  on  account  of  the  legatee  upon  whom  the  tax  is 
imposed.  *  *  *  It  is  merely  for  the  convenience  of  the 
State,  and  to  insure  certainty  of  collection  that  the  duty  is  cast 
upon  the  executor  of  paying  the  tax."  Jackson  v.  Tailer,  41 
Misc.  36-38,  affirmed,  without  opinion,  184  N.  Y.  603,  supra, 
page  322. 

"The  state  now  imposes  a  tax  as  a  condition  of  permitting 
the  legatee  or  beneficiary  to  take  the  property.  It  is  immaterial 
from  what  source  the  legatee  or  executor  procures  the  tax;  but 
the  states,  for  their  own  protection  and  to  insure  the  collection 
of  the  tax,  have  provided  that  the  executor  or  administrator 
shall  be  liable  for  its  payment;  and,  in  the  case  of  a  non-resident, 
that  the  property  shall  not  be  transferred  until  the  tax  is  paid. 
But  the  tax  is  not  necessarily  payable  out  of  the  particular 
property  bequeathed  or  inherited.  It  may  be  paid  from  any 
source.  If,  instead  of  paying  the  tax  out  of  the  property  be- 
queathed, it  is  paid  by  the  legatee  out  of  his  individual  property, 
it  becomes  at  once  apparent  that  the  value  of  the  property 
transferred  is  its  clear  market  value  at  the  date  of  decedent's 
death  without  any  diminution  on  account  of  the  tax  imposed 
by  the  state  as  a  condition  of  the  transfer. 

"  Ordinarily  the  tax  is  deducted  by  the  executor  from  the 
amount  of  the  bequest  and  the  balance  paid  to  the  legatee,  but 
this  is  done  for  convenience  and  not  because  the  legacy  is  the 
primary  fund  for  the  payment  of  the  tax.  The  statute  does  not 
say  that  the  tax  shall  be  imposed  upon  the  net  amount  which 
the  legatee  receives,  but  it  does  provide  that  the  tax  shall  be 
imposed  upon  the  clear  market  value  of  the  property  transferred 
by  the  will  of  the  decedent.  The  amount  of  the  tax  is  not  an 
expense  of  administration,  because  the  tax  is  imposed  upon  the 
interest  of  the  legatee  or  beneficiary  and  not  upon  the  estate." 
MATTER  OF  PENFOLD  (Surrogate  Fowler),  81  Misc.  598-602. 

"Where  a  legatee  does  not  accept  a  legacy  in  full  the  transfer 
tax  may  only  be  collected  on  that  part  which  the  legatee  ac- 
cepts." The  state  is  protected  by  reason  of  the  fact  that  the 
part  not  accepted  by  the  legatee  passes  to  other  beneficiaries 
and  the  transfer  to  them  is  taxed.  MATTER  OF  MERRITT,  155 
App.  Div.  228-232.  Vide  etiam  Matter  of  Wolfe,  179  N.  Y.  599, 
supra,  page  297;  Matter  of  Cook,  187  N.  Y.  253-259,  supra, 
page  337. 

'Claims  for  taxes  and  the  like  are  not  among  the  class  that 


PAYMENT   OF   TAX  759 

have  to  be  presented  and  proved  to  the  personal  representative. 
It  is  his  duty  to  pay  them,  the  same  as  he  has  to  pay  the  ex- 
penses of  administration,  and  he  cannot  evade  that  duty  by 
getting  a  decree  for  distribution  without  performing  it."  MAT- 
TER OF  CUMMINGS,  142  App.  Div.  377-391. 

(3)  When  payable  from  residuary  estate 

As  to  when  paid  from  residuary  estate  vide  Jackson  v .  Tailer, 
supra;  Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218,  supra, 
page  285;  Matter  of  Smith,  80  Misc.  140-143. 

IN  MATTER  OF  SAMUEL  MYERS,  N.  Y.  Law  Journal,  Novem- 
ber 22,  1913,  Surrogate  Fowler  held:  "The  executors  have  filed 
their  account  and  certain  legatees  have  filed  objections  thereto. 
In  order  to  determine  the  question  raised  by  these  objections 
it  is  necessary  for  the  surrogate  to  construe  certain  provisions 
of  the  will.  The  testator  in  paragraphs  two,  three  and  four  of 
his  will  directed  that  certain  amounts  should  be  paid  to  the 
legatees  therein  mentioned.  In  paragraph  fifth  he  provided  as 
follows:  'The  legacies  hereinabove  given  I  direct  to  be  paid  in 
full,  without  any  deduction  for  transfer  taxes,  and  direct  my 
executors  to  pay  the  transfer  taxes  on  said  legacies  from  my 
residuary  estate.'  This  was  followed  by  a  residuary  clause. 
About  six  months  after  the  execution  of  this  instrument,  as 
the  last  will  of  the  testator,  he  executed  a  codicil  by  which  he 
gave  to  Lena  Goldman,  Emma  Myers  and  Tillie  Swartz  the 
sum  of  $2,000  each.  These  legacies  were  not  mentioned  in  the 
will.  The  codicil  also  provided  that  the  sum  of  $2,000  should  be 
paid  to  his  sister,  Sarah  Adler,  and  that  $6,000  should  be  paid 
to  her  son,  Daniel  Adler,  in  addition  to  the  amounts  given  to 
them  by  the  will.  These  legatees  contend  that  it  was  the  in- 
tention of  the  testator  that  the  legacies  given  by  the  codicil 
should  be  paid  without  any  deduction  on  account  of  the  transfer 
tax. 

"  It  was  clearly  the  intention  of  the  testator  that  the  legacies 
given  in  the  clauses  of  the  will  preceding  the  fifth  paragraph 
should  be  paid  without  any  deduction  for  the  transfer  tax, 
because  he  expressly  provides  for  the  payment  of  such  tax  out 
of  his  residuary  estate.  If  he  intended  that  the  tax  on  the  lega- 
cies subsequently  given  by  the  codicil  should  also  be  paid  out 
of  the  residuary  estate,  it  is  reasonable  to  assume  that  he  would 
manifest  this  intention  by  the  use  of  appropriate  language. 
The  words  'the  legacies  hereinabove  given/  contained  in  the 


7(30  PAYMENT   OF  TAX 

fifth  paragraph  of  the  instrument  executed  on  June  6,  1910, 
cannot  logically  or  sequentially  be  held  to  refer  to  legacies 
given  by  an  instrument  executed  on  the  7th  of  December,  1910. 
If  instead  of  saying  'the  legacies  hereinabove  given'  the  testator 
had  said  'the  legacies  given  by  my  will'  there  would  be  some 
ground  for  the  contention  that  the  legacies  given  by  the  codicil, 
which  is  a  part  of  the  will,  were  to  be  paid  without  deduction 
for  transfer  taxes.  But  the  Avords  'the  legacies  hereinabove 
given'  limit  the  exemption  from  payment  of  transfer  tax  to 
those  legacies  given  in  the  preceding  clauses  of  the  will,  and  their 
signification  cannot  be  extended  so  as  to  apply  to  legacies  given 
by  a  subsequently  executed  instrument. 

"THE  CODICIL  not  only  provides  for  additional  amounts  to 
legatees  mentioned  in  the  will,  but  also  for  legacies  to  individ- 
uals not  mentioned  in  the  will.  As  the  words  '  legacies  herein- 
above  given '  cannot  be  construed,  to  refer  to  legacies  given  by 
an  instrument  executed  six  months  after  the  testator  had  used 
these  words,  neither  can  they  be  held  to  refer  to  legacies  given 
by  the  codicil  to  those  who  received  a  certain  amount  under  the 
prior  provisions  of  the  will.  It  would  appear,  therefore,  that 
the  objections  to  the  account  of  the  executors  should  be  over- 
ruled." 

(4)  Discount  and  interest  under  §  223 

It  is  the  practice  to  make  a  payment  within  six  months  so  as 
to  obtain  advantage  of  the  5%  discount  allowed  under  §  223. 
People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402-405. 

As  transfer  tax  proceedings  are  often  not  completed  within 
the  six  months,  the  estate  should  estimate  the  tax,  and  a  tem- 
porary receipt  will  be  issued  under  sections  222  and  236.  This 
temporary  payment  on  account  "is  not  the  concern  of  appraiser 
or  surrogate.  It  is  deductible  from  the  amount  finally  found 
due.  If  nothing  be  due,  then  it  must  be  refunded."  Matter  of 
Skinner,  106  App.  Div.  217-218. 

Vide  People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74,  affirmed, 
without  opinion,  209  N.  Y.  mem.,  and  cases  cited  sub  Interest, 
supra,  page  721. 

Comptroller  is  not  estopped  from  appealing  because  a  pay- 
ment has  been  made  of  the  tax  as  assessed.  Interest  and  pen- 
alty under  §  223  might  run  against  the  tax  if  Comptroller  should 
decline  to  receive  it.  Vide  Matter  of  Bogert,  25  Misc.  466, 


PAYMENT   OF   TAX  761 

holding  there  was  no  estoppel  under  the  circumstances  of  the 
case. 

(5)  Tax  payable  from  corpus,  not  income 

Prior  to  amendment  by  chap.  76,  Laws  of  1899,  in  effect 
March  14,  1899,  "some  of  the  courts  had  decided  that  the 
transfer  tax  on  life  estates  was  payable  out  of  income,"  but  after 
said  amendment  (present  §  230)  "the  legislative  intention  is 
clear  that  the  transfer  tax  shall  be  paid  out  of  the  corpus  of  the 
trust  estates,  and  not  out  of  income."  Matter  of  Tracy,  179 
N.  Y.  501-508-510;  supra,  page  292;  Matter  of  Hoyt,  44  Misc. 
76;  Matter  of  Vanderbilt,  172  N.  Y.  69-73,  supra,  page  268; 
Matter  of  Bass,  57  Misc.  531;  Matter  of  Title  Guarantee  & 
Trust  Co.,  81  id.  106-112. 

(6)  Annuities 

Vide  Matter  of  Tracy,  179  N.  Y.  501-510,  supra,  page  292; 
and  cases  cited  sub  Annuities,  supra,  page  586. 

(7)  Real  estate 

Vide  cases  cited  sub  Real  Estate,  post,  page  811. 

IN  HUGHES  v.  GOLDEN,  44  Misc.  128  (Kings  County),  it 
appeared  that  the  administrator  had  paid  the  inheritance  tax 
on  the  transfer  of  the  real  estate.  He  made  the  payment  from 
the  personal  estate  which  turned  out  to  be  insufficient  to  pay 
the  creditors  of  decedent.  No  proceedings  to  sell  real  estate 
under  §  2750  of  the  Code  of  Civil  Procedure  were  taken  within 
the  statutory  period  and  the  real  estate  descended  to  the  heirs 
who  were  widely  scattered.  In  a  partition  of  the  real  estate, 
the  court  ruled  that  out  of  the  proceeds  of  the  partition  sale 
should  be  paid  to  the  administrator  a  sum  equal  to  the  amount 
paid  for  the  inheritance  tax,  and  that  the  administrator  pay 
such  sum  to  the  creditors. 

REAL  PROPERTY  MAY  BE  SOLD  BY  EXECUTOR  to  satisfy  lien  of 
tax.  2  State  Department  Reports,  498,  opinion  quoted,  post, 
page  812. 

State  of  New  York  may  be  made  a  party  defendant  "  *  *  * 
in  any  action  brought  affecting  real  estate  upon  which  the  people 
of  the  state  of  New  York  have  or  claim  to  have  a  lien  under 
the  transfer  tax  act.  *  *  *"  Code  of  Civil  Procedure, 
§447. 


762  PAYMENT  OF  TAX 

(8)  Enforcement  of  payment 

Application  was  made  to  the  surrogate  in  MATTER  OF  Mc- 
GEE,  N.  Y.  Law  Journal,  February  7,  1913,  by  the  district 
attorney  under  §  235  to  compel  two  legatees  to  pay  transfer  tax. 
Surrogate  Fowler  in  granting  the  application  said:  "Under  the 
decision  of  Surrogate  Ransom,  which  will  be  followed  in  this 
case,  in  the  MATTER  OF  PROUT,  19  N.  Y.  St.  Rep.  318,  the  stat- 
ute in  effect  at  that  time  and  governing  the  matter  under  dis- 
cussion is  construed  as  placing  upon  legatees  the  direct  respon- 
sibility for  the  payment  of  the  tax,  that  decision  holding  in 
part:  'In  regard  to  persons  interested  in  the  property  liable  to 
the  tax,  other  than  administrators,  executors  and  trustees,  I 
am  of  opinion  that  the  surrogate  can,  on  the  return  of  an  ex- 
ecution issued  upon  his  decree,  as  already  seen,  enforce  the 
decree  as  provided  in  SECTION  2555  OF  THE  CODE.' 

"The  interposed  defense  of  the  STATUTE  OF  LIMITATIONS 
does  not  avail  in  this  matter,  because  under  the  provisions  of 
chapter  737  of  the  Laws  of  1899  (§  245  of  present  statute)  trans- 
fer tax  proceedings  are  exempted  from  the  operation  of  the  pro- 
visions of  the  Code  of  Civil  Procedure  relating  to  limitation  of 
proceedings  brought  under  the  Transfer  Tax  Law." 

Vide  MATTER  OF  MEYER,  209  N.  Y.  386,  supra,  page  397, 
and  cases  cited  sub  Lien  of  Tax,  supra,  page  734. 

Executors  of  NON-RESIDENT  decedents  not  excused  from  pay- 
ment of  tax  because  estate  has  been  distributed.  If  tax  is  not 
paid,  said  Surrogate  Fitzgerald,  "subsequent  proceedings  may 
be  taken  against  the  beneficiaries,  or  against  the  corporations 
in  which  decedent  held  the  stock,  as  well  as  against  the  per- 
sonal representatives."  Matter  of  Hubbard,  21  Misc.  566. 

(9)  Tax  should  be  assessed  although  payment  cannot  be 

enforced 

Whether  or  not  the  tax  can  be  collected  does  not  prevent  its 
being  assessed.  Matter  of  Dingman,  66  App.  Div.  228. 

(10)  Final  accounting 

The  second  sentence  of  §  236  provides,  inter  alia,  that  "no 
executor,  administrator  or  trustee  shall  be  entitled  to  a  final 
accounting  of  an  estate  in  settlement  of  which  a  tax  is  due 
under  the  provisions  of  this  article  unless  he  shall  produce  a 
receipt"  issued  under  the  provisions  of  the  last  sentence  of 
§222. 


PAYMENT   OF   TAX  763 

As  to  when  provisions  of  §  236  are  not  applicable  vide  Matter 
of  Meyer,  209  N.  Y.  386,  supra,  page  397. 

(11)  Return  of  overpayment 

Trustees  of  estate  of  donor  of  a  POWER  OF  APPOINTMENT  on 
death  of  life  tenant  made  a  temporary  payment  in  anticipation 
of  the  actual  determination  of  any  tax  which  should  be  found 
due  from  them  on  transfers  of  the  remainders  under  the  will  of 
the  creator  of  the  trust.  The  court  held  that  four-fifths  of  the 
remainder  passed  under  the  will  of  the  creator  of  the  trust  and 
that  one-fifth  of  the  remainder  passed  under  the  power  of  ap- 
pointment exercised  by  the  donee  in  his  will.  Thereupon  the 
comptroller  returned  the  overpayment  to  the  trustees  of  the 
estate  of  the  creator  of  the  trust.  The  executrix  of  the  estate 
of  the  donee  thereafter  applied  to  the  Supreme  Court  for  a  writ 
of  mandamus  to  compel  the  state  comptroller  to  issue  to  her 
as  executrix  of  the  estate  of  the  donee  a  receipt  in  full  for  the 
transfer  tax  assessed  upon  the  transfer  of  the  one-fifth  of  the 
remainder  which  the  court  had  held  (Matter  of  Ripley,  192 
N.  Y.  536,  supra,  page  353)  had  passed  under  the  exercise  of 
the  power  by  her  testator.  This  the  court  refused  to  do  on  the 
ground  that  the  liability  to  pay  the  tax  on  the  transfer  of  the 
one-fifth  of  the  remainder  was  a  liability  of  the  donee's  estate 
and  not  of  the  donor's  estate,  and  that  the  payment  by  the 
donor's  estate  in  excess  of  the  tax  for  which  it  was  legally  liable 
was  "a  purely  temporary  payment,"  which  could  not  "  in  any 
respect  be  deemed  to  have  been  anything  more  than  a  tender 
to  the  state  comptroller"  and  that  the  comptroller  was  under 
duty  to  return  to  the  trustees  of  the  estate  of  the  creator  of  the 
trust  the  excess  of  such  payment  when  the  court  decided  the 
amount  actually  due  from  the  estate  of  the  creator  of  trust. 
People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402. 

Where  the  tax  has  been  paid  to  the  county  treasurer  in  pur- 
suance of  the  provisions  of  the  last  sentence  of  §  222  (People 
ex  rel.  Lown  v.  Cook,  158  App.  Div.  74),  and  an  amended  order 
has  been  made  reducing  the  amount  of  the  tax  it  is  the  practice 
(Matter  of  Cameron,  97  App.  Div.  436-438,  supra,  page  305, 
affirmed,  without  opinion,  181  N.  Y.  560),  for  the  state  comp- 
troller to  issue  a  warrant  or  order  in  the  following  form: 


764  PAYMENT  OF  TAX 

STATE  OF  NEW  YORK,  COMPTROLLER'S  OFFICE: 


Order  of  State  Comptroller. 


In  the  Matter  of  the  Transfer  Tax 
on  the  Estate  of 

HELEN  G.  LAWTON, 
Ldte  of  Rockland  County, 

Deceased. 

WHEREAS,  it  appears  from  the  records  of  this  office  that  the 
above  named  decedent  died  a  resident  of  Rockland  County  on 
January  29,  1913,  and  that  letters  testamentary  were  issued 
upon  said  estate  by  the  surrogate  of  Rockland  County  to  Henry 
G.  Lav/ton  and  others  as  executors,  and 

WHEREAS,  it  appears  that  on  the  28th  day  of  July,  1913,  an 
order  was  entered  by  the  Surrogate  of  Rockland  County  assess- 
ing a  transfer  tax  on  this  estate  in  the  sum  of  $11,890.93  and 
subsequent  thereto  an  amended  order  was  entered  on  the  18th 
day  of  October,  1913,  assessing  a  tax  on  said  estate  in  the  sum 
of  $11,740.93,  and 

WHEREAS,  it  appears  that  the  executors  of  this  estate  on 
July  28,  1913,  and  within  six  months  from  the  date  of  decedent's 
death  paid  the  treasurer  of  Rockland  County  the  sum  of 
$11,296.38  which  entitled  the  representatives  of  this  estate  to 
the  proper  discount  for  payment  of  tax  within  six  months 
from  the  accrual  thereof,  said  discount  amounting  to  $587.05, 
and 

WHEREAS,  it  appears  that  the  net  transfer  tax  on  this  estate 
is  the  sum  of  $11,153.88,  and  that  by  reason  of  the  payment  of 
$11,296.38  made  as  aforesaid  the  representatives  of  said  estate 
have  paid  the  sum  of  $142.50  in  excess  of  the  amount  of  transfer 
tax  less  discount  as  aforesaid. 

NOW,  THEREFORE,  I  DO  HEREBY  ORDER  AND  DIRECT  the  Said 

treasurer  of  Rockland  County  to  refund  to  Henry  G.  Law- 
ton  and  others,  executors  of  said  estate,  the  sum  of  One  hundred 
forty-two  and  50-100  ($142.50)  Dollars  on  account  of  such 
excess  of  tax  paid  as  aforesaid,  from  any  moneys  in  his  hands 
belonging  to  the  transfer  tax  account,  which  said  sum  will  be 
allowed  the  said  treasurer  of  Rockland  County  in  the  settlement 
of  his  quarterly  accounts  with  this  department  upon  presenta- 
tion of  this  warrant,  together  with  the  receipt  of  the  executors 
of  said  estate  as  a  voucher  therefor,  and  also  the  remission  of 
the  fees  heretofore  allowed  the  said  county  treasurer  upon  the 
said  sum  of  $142.50. 


PETITION  765 

IN  WITNESS  WHEREOF  I  have  hereunto  set  my  hand  and 
affixed  my  official  seal  this  5th  day  of  November,  1913. 
(SEAL)  J.  A.  WENDELL, 

Deputy  Comptroller  of  the  State  of  New  York. 

To  Henry  G.  Lawton  and  others, 
Executors. 

Vide  cases  cited  sub  INTEREST,  supra,  page  721,  sub  REFUND, 
post,  page  815,  and  sub  VACATING  DECREE,  post,  page  878. 

PENALTY 

Vide  Interest;  Transfer  of  Securities. 

PERPETUAL  LEASE 

Vide  Leasehold. 

PERSONAL  PROPERTY 

In  RESIDENT  estate  tangible  personal  property  within  the 
state  is  subject  to  the  tax.  Vide  Schedule  A3  supra,  page  105. 
Intangible  property  is  also  subject  to  the  tax.  Subdivision  1  of 
§  220;  Matter  of  Dusenberry,  2  State  Department  Reports,  501, 
opinion  quoted,  supra,  page  119. 

Prior  to  amendment  by  Laws  1911,  chap.  732,  personal 
property,  wheresoever  situated,  of  resident  decedent  was  tax- 
able. Matter  of  Swift,  137  N.  Y.  77,  supra,  page  178. 

In  NON-RESIDENT  estates  tangible  personal  property  within 
the  state  is  subject  to  the  tax.  Intangible  property  is  not. 
For  discussion  vide  page  133.  Decisions  affecting  transfers 
made  prior  to  1911  amendment  collated  supra,  page  745. 

TRANSFERS  TO  LINEALS  and  certain  near  relatives  of  per- 
sonal property  was  first  made  subject  to  the  tax  by  Laws  1891, 
chap.  215,  in  effect  April  20, 1891  (Matter  of  Dreyfous,  18  N.  Y. 
Supp.  767). 

PERSONAL  TAXES 
Vide  Taxes. 

PETITION 

Vide  Forms,  supra,  page  695. 

Application  under  second  sentence  of  §  230  may  be  upon  a 
petition  the  allegations  of  which  are  upon  information  and 
belief,  as  authorized  by  Code  of  Civil  Procedure  §§  2534  and 
524.  Matter  of  Kelsey  v.  Church,  112  App.  Div.  408. 


766  PICTURES 

PICTURES 

Vide  §  2216  supra,  page  43,  as  to  when  exempt. 

Pictures  should  be  set  forth  in  Schedule  A3  with  title  and 
name  of  artist,  and  appraisal  by  expert  should  be  furnished,  vide 
supra,  page  108. 

PLEDGED  SECURITIES 

Pledged  securities  should  be  set  forth  in  Schedule  A4,  supra, 
page  116. 

IN  MATTER  OF  THEODORE  A.  HAVEMEYER,  32  Misc.  416, 
4,800  shares  of  American  Sugar  Refining  Co.  had  been  pur- 
chased for  decedent  at  $600,000,  the  brokers  holding  stock  at 
the  time  of  his  death  as  collateral  for  the  purchase  price.  After 
death  the  brokers  sold  stock  at  loss  of  $72,209.46  which  loss  was 
paid  by  the  estate.  Held,  that  said  payment  was  a  proper 
deduction,  and  that  it  was  error  to  charge  the  estate  with  the 
value  of  the  sugar  stock,  Surrogate  Thomas  saying:  "The  stock 
deposited  by  the  decedent  with  his  brokers  as  extra  collateral  for 
the  loan  of  $600,000  was  not  the  property  of  the  decedent,  but 
formed  a  portion  of  an  estate  created  by  the  decedent  under  a 
valid  trust  instrument,  the  terms  of  which  were  not  revocable 
at  his  election,  except  with  the  consent  of  the  beneficiaries  of 
the  trust." 

IN  MATTER  OF  PARSONS,  51  Misc.  370-372,  affirmed,  117 
App.  Div.  321,  the  comptroller  contended  that  appraiser  should 
have  taxed  certain  stock  which  stood  in  name  of  decedent's 
wife  and  had  been  pledged  as  collateral  security  for  two  notes 
made  by  her,  the  proceeds  of  said  notes  having  been  paid  to 
decedent.  In  the  absence  of  any  other  evidence  the  court  held 
that  appraiser  was  correct  hi  not  including  stock  among  taxable 
assets  of  decedent. 

Surrogate  Fitzgerald  in  MATTER  OF  HURCOMB,  36  Misc.  755 
(1902),  in  reversing  the  appraiser  said:  "Decedent  was  a 
resident  of  this  State.  At  the  time  of  her  death  she  was  in- 
debted to  the  Hamilton  Bank  of  this  city  in  the  sum  of  $2,000, 
the  bank  holding  as  collateral  security  therefor  shares  of  capital 
stock  of  the  market  value  of  $24,000.  Prior  to  the  institution 
of  the  tax  proceeding  the  executor  redeemed  the  stock  by 
paying  the  loan  with  interest.  The  appraiser  omitted  from 
the  taxable  estate  appraised  the  value  of  said  shares.  From 
the  order  entered  accordingly  this  appeal  is  taken  by  the 
comptroller. 


PLEDGED   SECURITIES  767 

"  The  appraiser  and  the  counsel  for  the  executrix  rely  upon  the 
Pullman  case,  46  App.  Div.  574.  That  case,  however,  instead 
of  being  an  authority  to  sustain  the  order,  is  a  precedent  for  its 
reversal.  In  the  Pullman  case  it  appeared  that  the  transaction 
remained  hi  the  same  state  at  the  time  of  the  appraisal  as  at 
the  tune  of  death,  that  the  security  had  not  been  resorted  to  by 
the  pledgee,  nor  had  the  personal  representative  paid  the  loan 
and  redeemed  the  collateral.  This  circumstance  is  expressly 
referred  to  in  the  opinion  of  Justice  Patterson,  for  he  says: 
'These  securities  are  liable  to  be  resorted  to  by  the  creditors. 
In  pledge  the  title  to  them  is  in  the  pledgee  and  they  are  not  in  a 
situation  to  be  taxed  now  as  property  of  the  estate  of  Mr.  Pull- 
man. All  of  their  amount  may  be  required  to  pay  the  debts  to 
which  these  bonds  and  stocks  are  collateral  and  the  creditor's 
security  should  not  be  diminished  at  this  time.' 

'  The  question  of  residence  or  non-residence  of  the  decedent 
would  make  no  difference,  for  in  the  Pullman  case  the  assets  of 
the  non-resident  decedent  which  were  referred  to  in  the  opinion 
were  bonds  actually  located  in  this  State  and  stocks  of  domestic 
corporations,  so  that  they  were  taxable  assets  independent  of 
residence.  While  the  debt  secured  by  the  pledge  of  collateral  is 
unliquidated,  and  the  extent  of  the  equity  is  unascertainable, 
as  was  the  case  in  the  Matter  of  Pullman,  it  may  be  well  that  the 
taxation  of  any  equity  therein  would  be  postponed  until  the 
transaction  had  been  completed  and  the  value  of  the  decedent's 
interest  therein  determined.  But  after  the  transaction  had  been 
closed,  and  the  interest  of  the  estate  therein  fixed  by  redemp- 
tion of  the  collateral — to  paraphrase  the  language  of  Justice 
Patterson — those  securities  are  no  longer  liable  to  be  resorted  to 
by  creditors;  the  title  to  them  has  reverted  to  the  estate  of  the 
pledger,  and  they  are  in  a  situation  to  be  taxed  as  property  of 
the  estate.  They  can  no  longer  be  required  to  pay  the  debts  to 
which  they  were  pledged  as  collateral,  and  there  is  no  longer  a 
necessity  for  protecting  the  creditor's  security,  his  relation  to 
the  matter  having  terminated." 

Non-resident  estates 

Securities  owned  by  non-residents  are  not  subject  to  tax, 
supra,  page  133. 

As  to  transfers  made  prior  to  the  1911  amendment  of  pledged 
securities  in  non-resident  estates  vide  discussion  of  cases  col- 
lated in  Matter  of  Ames,  141  N.  Y.  Supp.  793. 


768  PORTER   CASE,    RULE   IN 

In  non-resident's  estate  "where  domestic  creditors  have  in 
their  hands  the  legal  title  and  the  right  to  resort  for  the  pay- 
ment of  their  debts  to  securities  belonging  to  a  non-resident 
decedent  which  are  not  taxable  under  the  laws  of  this  state,  the 
indebtedness  due  such  creditors  is  not  to  be  offset  against  the 
value  of  property  of  such  decedent  otherwise  taxable."  Matter 
of  Pullman,  46  App.  Div.  574-578;  Matter  of  Burden,  47  Misc. 
329-333. 

PORTER  CASE,  RULE  IN 
Vide  page  147. 

POSTPONEMENT  OF  TAXATION 

Vide  Remainders;  Time  of  Tax. 

POWER  OF  APPOINTMENT 

(1)  Subdivision  6  of  §  220.  (12)  Power    of    appointment    does 

(2)  Amendment.  not  prevent  vesting. 

(3)  Cases  prior  to  1897  amendment.  (13)  Where    execution    of    power 

(4)  Constitutionality.  leaves  the  title  where  it  was 

(5)  Tax  imposed  upon  exercise  of  before. 

power.  (14)  The  rule  in  the  Cooksey  case. 

(6)  Jurisdiction  of  Surrogate.  (15)  Election  by  appointee. 

(7)  Relationship  of  donee  and  ap-      (16)  Where  exercise  of  the  power 

pointee  governs.  disposes  of  only  a  portion  of 

(8)  Direction  by  donee  to  pay  debt.  the  property. 

(9)  Remainder    not    taxable   until      (17)  Exercise  of  power  by  will  of 

donee's  death  if  power  of  ap-  resident  where  property  with- 

pointment  absolute.  out  the  state. 

(10)  Imposition  of  a  transfer  tax      (18)  Power  created  by  will  of  non- 

is  a  statutory  not  an  equita-  resident  exercised  by  will  of 

ble  proceeding.  resident. 

(11)  When  tax  paid  from  residuary      (19)  Non-resident  donee. 

estate.  (20)  Non-resident    donee  prior    to 

1911  amendment. 

(1)  Subdivision  6  of  §  220 

The  statutory  provision  governing  the  transfer  of  property 
by  the  exercise  of  a  power  of  appointment  is  contained  in  §  220 
und  is  as  follows: 

"A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer 
of  any  tangible  property  within  the  state  and  of  intangible  prop- 
erty, or  of  any  interest  therein  or  income  therefrom,  in  trust 
or  otherwise,  to  persons  or  corporations  in  the  following  cases, 


POWER   OF   APPOINTMENT  769 

subject  to   the  exemptions  and   limitations  hereinafter  pre- 
scribed :     *     * 

"6.  Whenever  any  person  or  corporation  shall  exercise  a 
power  of  appointment  derived  from  any  disposition  of  property 
made  either  before  or  after  the  passage  of  this  chapter,  such 
appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  chapter  hi  the  same  manner  as 
though  the  property  to  which  such  appointment  relates  be- 
longed absolutely  to  the  donee  of  such  power  and  had  been 
bequeathed  or  devised  by  such  donee  by  will." 

(2)  Amendment 

This  provision  became  a  part  of 'the  statute  by  Laws  of  1897, 
chap.  284,  and  has  not  been  amended  except  that  by  the  Laws 
of  1911,  chap.  732,  there  were  stricken  out  from  the  statute, 
the  words:  "and  whenever  any  person  or  corporation  possess- 
ing such  a  power  of  appointment  so  derived  shall  omit  or  fail 
to  exercise  the  same  within  the  time  provided  therefor,  in  whole 
or  in  part,  a  transfer  taxable  under  the  provisions  of  this  act 
shall  be  deemed  to  take  place  to  the  extent  of  such  omissions 
or  failure,  in  the  same  manner  as  though  the  persons  or  cor- 
porations thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  suc- 
ceeded thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  such  omission 
or  failure." 

As  to  the  part  so  stricken  out  by  the  1911  amendment  vide 
Matter  of  DOAVS,  167  N.  Y.  227-232;  Matter  of  Lansing,  182 
N.  Y.  238-247,  supra,  page  308,  apparently  overruling  Matter 
of  Bartow,  30  Misc.  27. 

(3)  Cases  prior  to  1897  amendment 

For  decisions  prior  to  the  1897  amendment  vide  Matter  of 
Stewart,  131  N.  Y.  274,  supra,  page  172;  Matter  of  Langdon, 
153  N.  Y.  6,  supra,  page  216;  Matter  of  Harbeck,  161  N.  Y. 
211,  supra,  page  234. 

(4)  Constitutionality 

The  act  is  constitutional  even  though  the  transfer  would  not 
be  subject  to  the  tax  except  for  the  exercise  of  the  power  of 
apix)intment.  Matter  of  Vanderbilt,  163  N.  Y.  597,  supra, 
page  240;  Matter  of  Dows,  167  N.  Y.  227,  supra,  page  248,  sus- 
tained in  183  U.  S.  278,  sub  nom.  Orr  v.  Oilman. 
49 


770  POWER   OF   APPOINTMENT 

The  exercise  of  a  POWEB  OF  APPOINTMENT  DERIVED  FROM  A 
DEED  made  prior  to  the  original  act  of  1885,  held  taxable  where 
donee  exercises  power  by  will.  Matter  of  Delano,  176  N.  Y. 
486,  supra,  page  280,  sustained  in  205  U.  S.  466,  sub  nom. 
Chanler  v.  Kelsey. 

QUERY  as  to  whether  there  is  a  taxable  transfer  where  the 
power  of  appointment  is  exercised  by  deed,  and  the  transfer  of 
the  property  would  not  be  subject  to  the  tax  if  it  were  not  for 
the  exercise  of  the  power  of  appointment.  The  dictum  in  Mat- 
ter of  Delano,  supra,  raises  a  doubt  as  to  the  question,  the  Court 
of  Appeals  saying  at  page  494:  "No  tax  is  laid  on  the  power,  or 
on  the  property,  or  on  the  original  disposition  by  deed,  but 
simply  upon  the  exercise  of  the  power  by  will,  as  an  effective 
transfer  for  the  purposes  of  the  act.  IF  THE  POWER  HAD 
BEEN  EXERCISED  BY  DEED,  a  different  question  would  have 
arisen.  *  *  *  " 

The  question  does  not  appear  to  have  been  passed  upon  in  a 
reported  case.  The  United  States  Supreme  Court  in  reviewing 
the  Delano  case,  said  (205  U.  S.  466)  supra,  page  282:  "The 
exercise  of  the  power  bestowing  property  in  the  present  case 
was  made  by  will.  And  we  need  not  consider  the  case,  expressly 
reserved  by  the  Court  of  Appeals  in  its  opinion,  as  to  the  result 
if  it  had  been  exercised  by  deed." 

(5)  Tax  imposed  upon  exercise  of  power 

It  is  the  exercise  of  the  power  that  gives  the  property  to  the 
appointee,  and  the  tax  is  imposed  at  the  time  the  property  is 
transferred  by  the  exercise  of  the  power  of  appointment.  Mat- 
ter of  Vanderbilt;  Matter  of  Dows  and  Matter  of  Delano, 
supra;  Isham  v.  N.  Y.  Assn.  for  the  Poor,  177  N.  Y.  218-223; 
Matter  of  Lowndes,  60  Misc.  506. 

The  condition  and  value  of  the  property  at  the  time  of  the 
exercise  of  the  power,  and  not  at  the  time  of  the  creation  of  the 
power,  determine  its  liability  to  the  tax.  Matter  of  Dows,  167 
N.  Y.  227-232,  supra,  page  250. 

The  transfer  under  the  power  is  assessed  on  the  value  of  the 
whole  property  passing  under  it,  and  not  merely  on  the  value 
of  the  remainder.  Matter  of  Tucker,  27  Misc.  616. 

(6)  Jurisdiction  of  surrogate 

It  is  the  residence  of  the  donee  and  not  the  residence  of  the 
donor  which  fixes  the  jurisdiction  of  the  surrogate.  Matter  of 


POWER   OF   APPOINTMENT  771 

Seaver,  63  App.  Div.  283;  Matter  of  Lowndes,  60  Misc.  506. 
As  to  jurisdiction  of  surrogate  in  resident  estates  vide  supra, 
page  56;  in  non-resident  estates,  page  137. 

(7)  Relationship  of  donee  and  appointee  governs 

Relationship  of  the  appointee  to  the  donee  and  not  to  the 
donor  governs  in  determining  the  rates  of  tax.  Matter  of 
Rogers,  172  N.  Y.  617,  supra,  page  274;  Matter  of  Seaver,  63 
App.  Div.  283. 

QUERY,  as  to  what  legislature  intended  if  there  were  two 
donors  of  the  power.  Matter  of  Walworth,  66  App.  Div.  171- 
175. 

The  statute  also  refers  to  a  possible  exercise  of  the  power  by 
a  corporation.  There  are  no  reported  decisions  on  the  question; 
it  would  seem  that  the  appointees  would  come  under  the  pro- 
visions of  subdivision  2,  §  22 la. 

(8)  Direction  by  donee  to  pay  debt 

,  In  Matter  of  Rogers,  172  N.  Y.  617,  supra,  page  274,  it  was 
held  that  where  a  creditor  of  donee  accepts  an  appointment 
in  his  favor  in  settlement  of  his  debt,  there  is  a  taxable  transfer. 

(9)  Remainder  not  taxable  until  donee's  death  if  power  of 
appointment  absolute 

Where  there  is  an  absolute  power  of  appointment  the  re- 
mainders are  not  taxable  until  the  death  of  the  donee.  Matter 
of  Howe,  176  N.  Y.  570,  supra,  page  284;  Matter  of  Burgess,  204 
N.  Y.  265-269;  Matter  of  Smith,  80  Misc.  140;  Matter  of  Field, 
36  Misc.  279;  Matter  of  Lane,  157  App.  Div.  694. 

The  remainders  are  taxable  at  death  of  testator  where  the 
power  of  appointment  is  not  absolute.  Matter  of  Burgess,  204 
N.  Y.  265-270;  Matter  of  Turner,  82  Misc.  25. 

IN  MATTER  OF  ARMSTRONG,  N.  Y.  Law  Journal,  February  20, 
1912,  the  surrogate  held:  "As  the  powers  of  appointment 
granted  by  the  decedent  to  the  various  life  tenants  can  only 
be  exercised  in  the  event  of  such  life  tenants  predeceasing  the 
widow  of  decedent,  the  remainders  over  which  such  powers  may 
in  that  contingency  be  exercised  are  presently  taxable  (Matter 
of  Burgess,  204  N.  Y.  265).  As  such  remainders  cannot  in  the 
absence  of  the  exercise  of  the  powers  of  appointment  vest  in 
other  than  beneficiaries  of  the  1  per  cent,  class,  they  should  be 
taxed  at  1  per  cent.  The  order  fixing  tax  will  be  reversed  and 


772  POWER   OF   APPOINTMENT 

the  appraiser's  report  remitted  to  him  for  correction  as  in- 
dicated." 

IN  MATTER  OF  GEORGE  H.  LITCHFIELD,  N.  Y.  Law  Journal, 
July  2,  1913,  Surrogate  Ketcham  held:  "The  order  adjusting 
the  transfer  tax  reserves  for  future  taxation  the  interests  and 
estates  in  remainder  after  the  life  estate  of  the  widow.  The 
text  of  the  will  is  as  follows:  'Third,  I  give,  devise  and  bequeath 
all  my  property,  real  and  personal,  including  the  portion  of  my 
father's  property  held  by  the  Brooklyn  Trust  Company,  to  my 
executor,  in  trust,  to  convert  the  same  into  money,  to  invest  the 
same,  and  to  collect  the  income  therefrom  and  apply  it  to  the 
use  of  my  wife,  Helen  A.  Litchfield,  during  her  life,  and  upon  her 
death  to  pay  over  the  principal  of  the  same  to  the  executor 
named  in  her  will,  if  she  have  one,  or  to  her  administrator  if  she 
die  intestate.' 

"If,  as  the  executor  contends,  the  will  gives  the  beneficiary  a 
power  of  appointment  over  the  fund  at  her  death,  the  transfer 
is  not  taxable  until  the  death  of  the  donee  of  the  power  (Matter 
of  Burgess,  204  N.  Y.  265).  The  comptroller  claims  that  the 
gift  over  is  to  the  next  of  kin  of  the  life  tenant,  and  if  he  be  right 
the  transfer  is  presently  taxable  at  the  primary  rate  of  5  per 
cent.  *  *  *  The  gift  in  this  will  is  to  the  life  tenant's 
executor,  subject  to  the  IMPLIED  POWER  OF  APPOINTMENT  by 
which  the  executor  may  be  directed  to  dispose  of  the  fund,  or, 
failing  a  will,  it  is  to  the  life  tenant's  administrator  necessarily 
under  the  duty  to  distribute  the  same  among  the  life  tenant's 
next  of  kin.  Until  it  be  known  that  the  life  tenant  has  died 
there  can  be  no  adjustment  of  the  tax  upon  the  remainder. 
The  order  must  be  affirmed." 

(10)  Imposition  of  a  transfer  tax  is  a  statutory  not  an  equitable 
proceeding 

Transfer  to  appointee  taxable  upon  exercise  of  the  power  by 
donee  although  tax  had  by  mistake  been  assessed  and  paid 
upon  entire  fund  at  time  of  death  of  donor.  Matter  of  Bucking- 
ham, 106  App.  Div.  13. 

IN  MATTER  OF  WILLIAM  C.  STUART,  N.  Y.  Law  Journal, 
May  10, 1913,  Surrogate  Fowler  held:  "The  executor  and  trustee 
under  the  last  will  and  testament  of  the  descendants  has  taken 
this  appeal  from  the  order  assessing  a  tax  upon  his  estate.  The 
decedent  was  given  a  power  of  appointment  in  the  will  of  his 
mother,  Ellen  Eliza  Ward,  who  died  in  1893.  She  directed 


POWER   OF   APPOINTMENT  773 

that  a  certain  part  of  her  estate  should  be  held  by  trustees; 
that  the  income  therefrom  should  be  paid  to  William  C.  Stuart, 
the  decedent  herein,  during  his  life,  and  upon  his  death  that  the 
trust  fund  should  be  paid  to  such  of  his  or  her  descendants  and 
in  such  proportions  as  he  by  his  last  will  and  testament  should 
direct  and  appoint,  and  in  the  event  of  his  failure  to  make  such 
appointment,  that  the  corpus  of  the  trust  fund  should  be  paid 
to  his  children  then  surviving. 

"The  decedent  exercised  the  power  in  favor  of  his  three 
children,  giving  to  one  of  them  one-third  of  the  trust  fund 
absolutely,  and  directing  that  two-thirds  be  held  in  trust  for 
the  other  two  children,  the  income  to  be  paid  to  them  during 
their  respective  lives,  and  the  corpus  of  each  child's  share  to  be 
disposed  of  as  such  child  by  his  last  will  directed  and  appointed. 

"  The  child  to  whom  the  one-third  was  given  absolutely  filed 
with  the  appraiser  a  statement  alleging  that  she  ELECTED  TO 

TAKE  HER  SHARE  UNDER  THE  WILL  OF  HER  GRANDMOTHER, 

Ellen  Eliza  Ward,  instead  of  under  the  power  of  appointment, 
and  the  appraiser  found  that  her  interest  was  not  taxable. 
He  ascertained  the  value  of  the  life  estates  of  the  two  children 
in  the  two-thirds  of  the  trust  fund  appointed  to  them  by  the 
decedent  to  be  $215,906  and  $221,864  respectively.  Upon 
these  amounts  a  transfer  tax  was  imposed. 

"The  value  of  the  trust  fund  in  which  the  decedent  had  a  life 
estate,  and  over  which  he  was  given  a  power  of  appointment, 
was  ascertained  by  the  transfer  tax  appraiser  in  the  estate  of 
Ellen  Eliza  Ward  to  be  the  sum  of  $645,000,  and  upon  this 
amount  a  tax  of  $6,450  was  imposed  by  the  order  fixing  a  tax  on 
her  estate.  THE  EXECUTOR  CONTENDS  that  the  payment  of  the 
tax  in  the  estate  of  Ellen  Eliza  Ward  upon  the  $645,000  held  in 
trust  for  the  life  of  the  decedent,  and  over  which  he  was  given 
a  power  of  appointment,  was  a  payment  of  the  tax  on  the  life 
estate  of  the  decedent  as  well  as  upon  the  remainder  over  which 
he  had  the  power  of  appointment,  and  that  therefore  no  tax  can 
now  be  imposed  upon  the  transfer  of  property  affected  by  the 
exercise  of  the  power  of  appointment. 

"The  transfer  tax  statute  in  force  at  the  time  of  decedent's 
death  provided  that  'whenever  any  person  shall  exercise  a 
power  of  appointment  *  *  *  such  appointment  when 
made  shall  be  deemed  a  transfer  taxable  under  the  provisions 
of  this  chapter  in  the  same  manner  as  though  the  property  to 
which  appointment  relates  belonged  absolutely  to  the  donee  of 


774  POWER   OF  APPOINTMENT 

such  power  and  had  been  bequeathed  or  devised  by  such  donee 
by  will.'  Under  this  statute  the  transfer  of  the  property  over 
which  the  decedent  exercised  the  power  of  appointment  is  sub- 
ject to  a  tax  (Matter  of  Vanderbilt,  50  App.  Div.  246,  aff'd 
163  N.  Y.  597;  Matter  of  Howe,  86  App.  Div.  286,  aff'd  176 
N.  Y.  570),  unless  the  taxation  of  the  corpus  of  the  trust  fund 
in  the  estate  of  Ellen  Eliza  Ward  estops  the  State  of  New  York 
from  the  enforcement  of  its  rights  under  the  statute. 

"Chapter  399  of  the  Laws  of  1892,  which  was  the  transfer 
tax  statute  in  force  when  Ellen  Eliza  Ward  died,  provided  that 
'taxes  upon  the  transfer  of  any  estate,  property  or  interest 
therein  limited,  conditioned,  dependent  or  determinable  upon 
the  happening  of  any  contingency  or  future  event  by  reason  of 
which  the  fair  market  value  thereof  cannot  be  ascertained  at 
the  tune  of  the  transfer,  as  herein  provided,  shall  accrue  and 
become  due  and  payable  when  the  persons  or  corporations 
beneficially  entitled  thereto  shall  come  into  actual  possession  or 
enjoyment  thereof.'  The  value  of  the  estates  or  interests  which 
might  pass  to  the  appointees  of  the  decedent  herein  by  virtue 
of  the  power  of  appointment  contained  in  the  will  of  Ellen  Eliza 
Ward  was  not  ascertainable  at  the  time  of  the  appraisal  of  her 
estate.  The  decedent  could  divide  the  trust  fund  among  his 
descendants  or  among  his  mother's  descendants  in  such  propor- 
tions as  he  desired;  he  could  appoint  a  portion  to  children  of 
his  brother,  and  such  portion  would  be  taxable  at  the  rate  of 
5  per  cent.  Therefore,  neither  the  value  of  the  interests  of  the 
appointee  nor  the  rate  of  tax  which  could  be  imposed  upon  the 
transfer  of  such  interests  was  ascertainable  at  the  time  of  the 
death  of  Ellen  Eliza  Ward. 

"The  value  of  the  life  estate  of  the  decedent  in  the  trust  fund 
over  which  he  had  the  power  of  appointment  was  taxable  at 
the  time  of  the  appraisal  of  his  mother's  estate,  but  the  interests 
of  the  appointees  under  his  will  were  not  then  taxable  (Matter  of 
Roosevelt,  143  N.  Y.  120;  Matter  of  Sloan,  154  N.  Y.  109). 
Therefore  the  appraiser  of  the  estate  of  Ellen  Eliza  Ward  erred 
in  reporting  as  taxable  at  that  time  the  value  of  the  entire  trust 
fund  in  which  the  decedent  had  a  life  estate  and  over  which  he 
was  given  a  power  of  appointment.  But  that  mistake  was  made 
in  the  taxation  of  the  estate  of  Ellen  Eliza  Ward,  and  it  cannot 
operate  to  prevent  the  State  of  New  York  from  assessing  a  tax 
upon  the  interests  which  were  transferred  by  virtue  of  the  power 
of  appointment  exercised  by  the  decedent  herein. 


POWER   OF   APPOINTMENT  775 

"  IT  WAS  THE  EXERCISE  OF  THE  POWER  OF  APPOINTMENT  and 

not  the  creation  of  the  power  which  effected  the  transfer  of  a 
life  estate  in  two-thirds  of  the  trust  fund  to  the  appointees  men- 
tioned in  the  will  of  the  decedent,  and  upon  such  transfer  tax 
may  be  imposed  (Matter  of  Seaver,  63  App.  Div.  283;  Matter  of 
Walworth,  66  App.  Div.  171).  The  tax  is  imposed  upon  the 
transfer  of  the  property,  and  the  transfer  effected  by  the  exercise 
of  the  power  of  appointment  by  the  decedent  is  taxable,  irre- 
spective of  any  tax  that  may  have  been  imposed  upon  the 
transfer  of  the  same  property  in  the  estate  of  Ellen  Eliza 
Ward. 

"As  the  imposition  of  a  transfer  tax  is  a  statutory  and  not  an 
equitable  proceeding,  this  court  cannot  depart  from  the  pro- 
cedure prescribed  by  the  transfer  tax  statute  in  order  that 
equity  may  be  done  between  the  State  of  New  York  and  the 
beneficiaries  of  decedent's  bounty.  THE  MISTAKE  COMMITTED 
IN  ASSESSING  A  TAX  upon  the  estate  of  Ellen  Eliza  Ward  could 
have  been  corrected  in  the  manner  prescribed  by  statute,  but 
the  fact  of  its  having  been  made  and  not  corrected  cannot  now 
prevent  the  imposition  of  a  tax  upon  the  transfer  of  interests 
effected  by  the  exercise  of  the  power  of  appointment  vested  in 
the  decedent.  Order  fixing  tax  affirmed." 

(11)  When  tax  paid  from  residuary  estate 

As  to  payment  of  tax  from  residuary  estate  of  DONEE,  vide 
Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218,  supra,  page  285. 

IN  MATTER  OF  SMITH,  80  Misc.  140,  Surrogate  McCauley  of 
Rockland  County,  held  that  in  the  estate  in  question  the  taxes 
should  be  paid  from  the  residuary  estate  of  DONOR,  saying  at 
page  144  that  the  question  was  "merely  one  of  interpretation. 
Did  the  testator  intend,  and  so  express  himself  in  the  first  clause 
of  his  will,  that  the  appointees,  and  ultimate  beneficiaries,  in 
the  event  of  the  exercise  of  the  power  of  appointment,  should  re- 
ceive the  gifts  or  bequests  in  full  and  without  diminution  by 
reason  of  any  succession  or  transfer  tax  that  might  be  imposed 
thereon?  We  think  he  did." 

The  clause  referred  to  provided  "  that  all  the  gifts,  bequests, 
devises  and  legacies  hereinafter  mentioned  be  paid,  transferred 
or  received  in  full  (subject  to  any  provisions  for  abatement 
hereinafter  contained),  and  that  all  succession  or  transfer  taxes 
imposed  thereon,  or  on  any  of  them,  be  paid  out  of  my  residuary 
estate." 


776  POWER   OF   APPOINTMENT 

(12)  Power  of  appointment  does  not  prevent  vesting 

"The  existence  of  an  unexecuted  power  of  appointment  does 
not  prevent  the  vesting  of  a  future  estate,  limited  in  default  of 
the  execution  of  the  power."  Section  41  of  Real  Property  Law; 
Matter  of  Haggerty,  128  App.  Div.  479-481,  affirmed,  without 
opinion,  194  N.  Y.  550. 

The  same  principle  applies  to  a  grant  or  bequest  of  personal 
property.  Matter  of  Moehring,  154  N.  Y.  423-427;  Matter  of 
Cooksey,  182  id.  92-97. 

(13)  Where  execution  of  power  leaves  the  title  where  it  was 
before 

If  the  donee  exercises  a  power  of  appointment  in  such  a  way 
that  the  beneficiary  receives  the  property  the  same  as  though 
the  power  had  not  been  exercised  there  is  no  tax  on  the  transfer 
under  the  provisions  of  subdivision  6  of  §  220.  Matter  of 
Lansing,  182  N.  Y.  238,  supra,  page  307;  Matter  of  Backhouse, 
185  id.  544;  Matter  of  Spencer,  190  id.  517;  Matter  of  Ripley, 
192  id.  536;  Matter  of  Haggerty,  194  id.  550;  Matter  of  Lewis, 
id.  550;  Matter  of  Chapman,  199  N.  Y.  562,  supra,  page  371; 
Matter  of  Haight,  152  App.  Div.  228;  People  ex  rel.  Ripley  v. 
Williams,  69  Misc.  402. 

It  should  be  borne  in  mind,  however,  that  if  the  transfers 
from  the  donor  are  subject  to  tax  and  the  taxation  has  been 
postponed  because  of  the  existence  of  a  power  of  appointment, 
then  the  transfers  will  be  taxable  in  donor's  estate  if  the  power 
is  not  exercised  in  the  donee's  estate.  People  ex  rel.  Ripley  v. 
Williams,  supra. 

IN  MATTER  OF  MARY  C.  TOMPKINS,  N.  Y.  Law  Journal, 
August  11,  1913,  Surrogate  Cohalan  held:  "As  the  power  of 
appointment  was  exercised  by  William  H.  Tompkins,  the  prop- 
erty transferred  by  virtue  of  the  exercise  of  such  power  is  tax- 
able as  part  of  his  estate  (subdiv.  6,  sec.  220,  Tax  Law;  Matter 
of  Leeds,  N.  Y.  Law  Journal,  April  23,  1913).  If  the  decedent 
in  exercising  the  power  of  appointment  did  not  effectually  dis- 
pose of  all  the  property  subject  to  the  power  an  order  may  be 
entered  in  the  estate  of  the  donor  of  the  power  assessing  a  tax 
upon  the  value  of  the  property  remaining  undisposed  of  after 
the  exercise  of  the  power." 

Matter  of  Leeds,  supra,  opinion  quoted,  post,  page 
863. 


POWER   OF   APPOINTMENT  777 

(14)  The  rule  in  the  Cooksey  case 

Where  the  donor  of  the  power  provides  the  way  the  remainders 
shall  go  if  the  power  of  appointment  is  not  exercised,  and  the 
donee  by  will  makes  changes  with  reference  to  paying  over  the 
remainder,  the  exercise  of  the  power  cannot  be  treated  as  a 
nullity,  and  is  taxable.  Matter  of  Cooksey,  182  N.  Y.  92;  Mat- 
ter of  Warren,  62  Misc.  444. 

(15)  Election  by  appointee 

In  Matter  of  Margaret  E.  Mitchill,  N.  Y.  Law  Journal, 
November  22,  1913,  the  donee,  who  died  February  7,  1912, 
exercised  a  power  in  favor  of  the  same  persons  who  would  have 
taken  the  property  if  the  power  had  not  been  exercised.  Surro- 
gate Fowler  said,  inter  alia:  "The  state  comptroller  contends 
that  the  legatees,  if  they  wished  to  avoid  the  imposition  of  a 
tax,  should  have  filed  with  the  appraiser  a  notice  in  writing 
indicating  their  intention  of  electing  to  take  the  property  under 
the  will  of  Samuel  L.  Mitchill,  and  not  by  virtue  of  the  power 
of  appointment  exercised  by  the  decedent.  Such  notices  of 
election  have  been  filed  with  the  papers  on  this  appeal.  As 
the  transfer  tax  is  a  special  tax,  it  is  incumbent  upon  the  taxing 
officer  to  show  that  the  property  or  interest  which  he  contends 
is  subject  to  taxation  has  been  transferred  in  the  manner  pre- 
scribed by  the  transfer  tax  statute.  In  the  matter  under  con- 
sideration the  appellants  derived  their  right  to  the  property 
from  the  will  of  Samuel  L.  Mitchill,  and  its  transfer  to  them 
under  and  by  virtue  of  the  provisions  of  his  will  was  not  subject 
to  a  tax.  As  the  will  of  the  decedent  did  not  increase  or  diminish 
the  value  of  their  respective  interests  as  transferred  by  the  will 
of  Samuel  L.  Mitchill,  they  may  disregard  the  attempted  trans- 
fer contained  in  her  will. 

"  IN  THE  ABSENCE  OF  DIRECT  PROOF,  it  will  be  presumed  that 
persons  entitled  to  take  property,  either  burdened  with  a  trans- 
fer tax  or  without  such  a  burden,  will  accept  that  form  of  trans- 
fer which  relieves  them  from  the  necessity  of  paying  the  tax. 
The  order  fixing  tax  will  be  reversed,  and  the  appraiser's  report 
remitted  to  him  for  the  purpose  of  omitting  from  his  appraisal 
the  property  held  in  trust  for  the  life  of  the  decedent,  and  over 
which  she  exercised  the  power  of  appointment." 

VIDE  ETIAM  Matter  of  Backhouse,  185  N.  Y.  544,  supra, 
page  328  and  cases  cited  sub  Election,  page  679. 


778  POWER   OF   APPOINTMENT 

(16)  Where  exercise  of  the  power  disposes  of  only  a  portion 
of  the  property 

Vide  Matter  of  Ripley,  192  N.  Y.  536,  supra,  page  353;  Mat- 
ter of  Stuart,  supra,  page  772. 

(17)  Exercise  of  power  by  will  of  resident  where  property 
without  the  state 

Exercise  of  power  by  will  of  resident  under  power  given  by 
will  of  resident  held  taxable  although  the  personal  property 
transferred  by  the  donee  was  without  the  state.  Matter  of 
Hull,  186  N.  Y.  586,  supra,  page  335. 

(18)  Power  created  by  will  of  non-resident  exercised  by  will 
of  resident 

Surrogate  Fowler  in  MATTER  OF  ANNIE  FRAZIER,  N.  Y.  Law 
Journal,  March  28,  1912,  held,  that  where  a  resident  of  this 
state  is  given  a  power  of  appointment  over  property  by  the 
will  of  a  non-resident,  the  property  passing  by  virtue  of  the 
exercise  of  such  power  of  appointment  is  taxable  in  this  state. 
The  surrogate  said:  "This  appeal  is  taken  by  the  executors 
from  an  order  assessing  a  tax  upon  the  estate  of  decedent. 

"  Nalbro  Frazier,  the  father  of  decedent,  was  a  resident  of 
Pennsylvania.  He  bequeathed  certain  personal  property  to 
trustees  with  directions  that  the  income  thereof  be  applied  to 
the  use  of  decedent  during  her  life,  and  in  the  event  of  her  dying 
without  issue,  that  the  corpus  of  the  trust  fund  be  paid  to  such 
person  or  persons  as  the  decedent  by  any  instrument  of  writing 
in  the  nature  of  a  last  will  and  testament  should  direct  or  ap- 
point. The  decedent  died  on  the  1st  day  of  January,  1911,  a 
resident  of  the  County  of  New  York.  She  left  no  issue,  but 
she  made  a  will  by  which  she  exercised  the  power  of  appoint- 
ment given  to  her  in  the  will  of  her  father.  The  transfer  tax 
appraiser  reported  that  the  transfer  of  the  property  constituting 
the  trust  fund  was  taxable.  The  appellants  contend  that  such 
property  is  not  taxable  under  the  transfer  tax  laws  of  this  State; 
but  that  if  section  220  of  the  Tax  Law  be  held  to  authorize  the 
imposition  of  a  tax  upon  property  so  transferred,  then  that 
such  act  is  unconstitutional. 

(<  The  State  Comptroller  also  appeals  from  the  order  fixing  tax 
upon  the  ground  that  the  appraiser  erred  in  exempting  from 
taxation  a  bequest  of  $1,000  to  the  Bishop  of  the  Protestant 
Episcopal  Church  of  South  Dakota. 

"  The  right  of  an  individual  to  make  a  will  or  testamen- 


POWER   OF   APPOINTMENT  779 

tary  instrument  is  not  a  natural  or  inherited  right,  but  a 
privilege  which  the  State  can  grant  or  withhold  at  its  dis- 
cretion. If  granted,  it  may  impose  such  limitations  upon  the 
privilege  as  the  Legislature  sees  fit  to  prescribe  (Matter  of 
Dows,  167  N.  Y.  227).  The  transfer  tax  is  not  a  tax  on 
property,  but  on  the  privilege  granted  by  the  State  to  an  in- 
dividual to  succeed  to  the  property  of  a  deceased  person,  and 
the  power  which  confers  this  privilege  may  impose  a  tax  upon 
it.  (Magoun  v.  Illinois  Trust  Co.,  170  U.  S.  283).  As  the  de- 
cedent was  a  resident  of  this  State,  the  privilege  of  making  a 
will  by  which  she  disposed  of  the  property  constituting  the  trust 
fund'  was  one  granted  by  this  State.  That  she  might  have 
exercised  the  power  by  an  instrument  in  writing  in  the  nature 
of  a  last  will  and  testament  is  immaterial,  because  as  a  matter 
of  fact  she  did  not  attempt  to  exercise  the  power  by  any  other 
writing  than  that  propounded  in  this  State  as  her  last  will  and 
testament.  Matter  of  Hull,  111  App.  Div.  323.  The  trustees 
of  her  father's  estate  paid  to  the  executors  appointed  under 
the  decedent's  will  in  this  State  the  property  constituting  the 
trust  fund  held  by  them,  and  the  executors  distributed  this 
property  to  the  various  legatees  in  accordance  with  the  provi- 
sions of  decedent's  will.  Therefore  the  right  of  these  legatees 
to  succeed  to  the  property  was  derived  from  the  will  of  de- 
cedent, and  upon  this  privilege  the  State  of  New  York  may  im- 
pose a  tax.  Matter  of  Delano,  176  N.  Y.  486,  sustained  sub 
nom.  Chandler  v.  Kelsey,  205  U.  S.  466.  It  has  been  held  that 
where  the  donor  of  the  power  was  a  resident  of  this  State  and 
the  power  was  exercised  by  a  non-resident,  the  property  passed 
by  virtue  of  a  privilege  granted  by  the  State  where  the  party 
exercising  the  power  of  appointment  resided,  and  that  it  was 
not  taxable  here.  Matter  of  Kissell,  65  Misc.  443,  affirmed, 
without  opinion,  142  App.  Div.  934;  Matter  of  Fearing,  200 
N.  Y.  340.  In  the  Matter  of  Fearing  the  court  said:  'As  Mrs. 
Sheldon  (the  donee  of  the  power)  in  making  a  will  exercised  a 
privilege  granted  by  the  laws  of  her  own  State  and  not  by  those 
of  this  State,  the  transfers  of  property  effected  thereby  were 
beyond  the  reach  of  our  tax  laws.' l  Conversely,  as  the 

1  It  should  be  borne  in  mind  that  in  the  KISSELL  CASE,  supra,  that  the 
transfer  of  stocks  in  domestic  corporations  was  held  taxable,  and  in  the 
FEARING  CASE,  supra,  the  transfer  of  a  deposit  in  a  New  York  Trust  Com- 
pany evidenced  by  a  certificate  of  deposit  physically  located  without  the 
state  was  held  subject  to  the  tax. 


780  POWER  OF  APPOINTMENT 

property  constituting  the  trust  fund  over  which  the  decedent 
exercised  a  power  of  appointment  was  transferred  to  the  various 
legatees  mentioned  in  the  decedent's  will  by  virtue  of  a  privilege 
granted  by  this  State,  such  transfer  is  taxable. 

11  The  bequest  to  the  Bishop  of  the  Protestant  Episcopal 
Church  in  South  Dakota  is  exempt  from  taxation  (sec.  221  of 
the  Tax  Law;  Matter  of  Palmer,  33  App.  Div.  307)." 

Surrogate  Ketcham  in  MATTER  OF  HANNAH  H.  SEAMAN, 
N.  Y.  Law  Journal,  December  5,  1913,  held:  "Two  questions 
are  presented  by  the  comptroller's  appeal  from  the  assessment 
of  the  transfer  tax,  as  to  one  of  which  it  is  agreed  that  there 
must  be  a  remission  of  this  matter  to  the  appraiser.  The'other 
concerns  the  failure  to  impose  the  tax  upon  the  transfer  of  a 
certain  fund  situate  in  Pennsylvania  and  created  by  the  will  of 
a  resident  of  that  State.  The  will  of  the  Pennsylvania  resident 
conferred  upon  the  decedent  above  named  the  power  to  appoint 
by  will  the  persons  to  take  the  said  fund  in  the  event  of  her  own 
death.  Pursuant  to  such  power,  the  decedent,  a  resident  of 
this  State,  by  a  will  executed  in  this  State,  made  an  appoint- 
ment which  is  the  transfer  involved  in  this  discussion.  The 
taxability  of  that  transfer  was  determined  by  Judge  Fowler  in 
the  MATTER  OF  FRAZIER,  N.  Y.  Law  Journal,  March  28,  1912 
(in  which  case  the  learned  surrogate  reversed  the  rule  which 
had  been  previously  declared  in  his  court,  and  his  conclusion 
received  reflex  support  from  the  decision  in  Matter  of  Fearing, 
200  N.  Y.  340).  This  court  accepts  the  reasoning  as  well  as  the 
authority  of  the  case  first  cited.  The  order  appealed  from  is 
reversed  in  respect  of  both  dispositions  assigned  as  error  in  the 
notice  of  appeal,  and  the  proceeding  is  remitted  for  a  readjust- 
ment accordingly." 

Surrogate  Thomas  held  in  MATTER  OF  THOMAS,  39  Misc.  136 
(1902),  that  exercise  of  power  of  appointment  by  will  of  resident 
under  power  conferred  by  will  of  non-resident  was  not  taxable 
where  the  property  transferred  is  not  situated  within  the  state. 
This  case  was  urged  by  the  estate  in  Matter  of  Frazier,  supra, 
and  as  the  surrogate  did  not  adopt  its  reasoning  it  may  be  con- 
sidered as  being  overruled. 

(19)  Non-resident  donee 

The  exercise  by  a  non-resident  donee  of  a  power  of  appoint- 
ment derived  from  the  disposition  of  property  made  by  the  will 
of  a  resident  raises  questions  not  free  from  doubt  which  have 


POWER   OF   APPOINTMENT  781 

not  yet  been  directly  passed  upon  by  the  courts  since  the  1911 
amendment.  As  was  said  by  Justice  Earl,  "the  law  makers 
cannot  always  foresee  all  the  possible  applications  of  the  general 
language  they  use."  L.  S.  &  M.  S.  Ry.  Co.  v.  Roach,  80  N.  Y. 
339-344. 

Assume  that  A  died  August  18,  1912  leaving  a  will  by  which 
he  bequeathed  certain  stocks  and  bonds  to  a  trustee  in  trust  to 
hold  the  same  for  B  during  her  lifetime,  and  to  receive  and  pay 
over  the  dividends  and  interest  thereof  to  B;  and  upon  her  death 
to  deliver  said  stocks  and  bonds  so  held  in  trust  for  her  to  such 
person  or  persons  as  B  should  appoint  by  her  last  will  and  tes- 
tament. 

At  the  death  of  A,  a  resident  of  the  state  of  New  York,  the 
only  transfer  taxable  would  be  the  life  estate  of  B.  Matter  of 
Howe,  176  N.  Y.  570,  supra,  page  284;  Matter  of  Burgess,  204 
N.  Y.  265-270,  supra,  page  382. 

If  B  should  fail  to  exercise  the  power  of  appointment  then 
the  transfer  of  the  remainder  would  be  taxable  in  the  estate 
of  A.  People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402.  If  B 
exercised  the  power  then  the  transfer  of  the  remainder  would 
not,  as  the  law  has  so  far  been  interpreted,  be  taxable  in  the 
estate  of  A,  but  would  be  taxable,  if  at  all,  as  though  the  prop- 
erty belonged  absolutely  to  B.  Matter  of  Tucker,  27  Misc. 
616;  subd.  6  of  §  220. 

B  dies  January  2,  1914,  a  non-resident  of  the  state  at  the 
time  of  her  death.  By  her  will  B  exercises  the  power  of  ap- 
pointment derived  from  the  will  of  A.  Such  appointment  made 
by  B  is,  in  the  words  of  subdivision  6  of  §  220,  "deemed  a  trans- 
fer taxable  under  the  provisions  of  this  chapter  in  the  same 
manner  as  though  the  property  to  which  such  appointment 
relates  belonged  absolutely  to  the  donee  of  such  power  and  had 
been  bequeathed  or  devised  by  such  donee  by  will."  Matter 
of  Rogers,  172  N.  Y.  617,  supra,  page  274;  Matter  of  Seaver, 
.63  App.  Div.  283;  Matter  of  Walworth,  66  id.  171. 

The  only  transfer  made  by  the  will  of  B,  a  non-resident,  which 
is  subject  to  the  tax,  since  the  amendment  by  Laws  of  1911, 
chap.  732  of  subdivision  2,  §  220,  is  "of  tangible  property  within 
the  state."  The  1911  amendment  added  to  §  243  its  present 
second  sentence,  supra,  page  526,  which  specifically  provides 
that  stocks  and  bonds  are  not  tangible  property.  Therefore, 
the  transfer  of  the  said  stocks  and  bonds  of  which  A,  a  resident, 


782  POWER   OF   APPOINTMENT 

died  possessed  escape  taxation  except  as  to  the  tax  upon  the 
transfer  of  the  life  estate  of  B. 

As  Matter  of  Fearing,  133  App.  Div.  337,  supra,  page  373, 
was  affirmed  in  1910  by  the  Court  of  Appeals  in  200  N.  Y.  340, 
it  would  seem  that  the  legislature  intended  this  result  when  it 
enacted  the  1911  amendment.  It  is  not  plain,  however^  upon 
what  theory  it  proceeded. 

(20)  Non-resident  donee  prior  to  1911  amendment 

Exercise  of  power  of  appointment  by  non-resident  taxable 
only  as  to  taxable  assets  within  the  state,  even  though  the  donor 
of  power  was  a  resident.  Matter  of  Fearing,  138  App.  Div.  881- 
884,  supra,  page  373,  affirmed,  200  N.  Y.  340. 

IN  MATTER  OF  LOWNDES,  60  Misc.  506,  the  donee  of  a  power 
of  appointment,  a  non-resident,  exercised  a  power  of  appoint- 
ment in  connection  with  REAL  ESTATE  situated  in  New  York 
County.  Held,  that  transfer  was  taxable  and  that  Surrogates' 
Court  of  that  county  had  jurisdiction. 

IN  MATTER  OF  KISSEL,  65  Misc.  443,  affirmed,  without 
opinion,  142  App.  Div.  934,  Surrogate  Cohalan  said:  "As  the 
power  of  appointment  given  to  the  decedent  herein  was  exer- 
cised by  her  while  a  resident  of  the  State  of  New  Jersey,  and 
was  consummated  by  the  probate  of  her  will  under  the  laws  of 
the  State  of  New  Jersey,  the  general  privilege  of  permitting  all 
the  property  included  within  the  power  to  pass  to  the  benefi- 
ciaries appointed  by  the  decedent  was  a  privilege  granted  by  the 
State  of  New  Jersey  and  not  by  the  State  of  New  York.  The 
only  privilege  granted  by  the  State  of  New  York  was  to  permit 
the  transfer  of  the  property  located  in  New  York  to  pass  to  the 
appointees  in  accordance  with  the  provisions  of  the  will  pro- 
bated in  New  Jersey.  Therefore,  the  jurisdiction  of  the  State  of 
New  York  to  tax  the  transfer  of  property  passing  under  the  will 
of  the  decedent  is  limited  to  the  property  situated  in  this  State 
at  the  time  of  her  death."  The  grantor  of  the  power  died  in 
1886  a  resident  of  New  York,  and  as  he  limited  the  disposition  of 
his  estate  to  "lineals"  it  was  not  taxable  in  his  estate,  being 
taxable,  if  at  all,  in  the  estate  of  the  life  tenant  exercising  the 
power  of  appointment.  The  property  over  which  the  power 
of  appointment  was  exercised  consisted  of  stocks  of  domestic 
corporations  and  of  foreign  corporations  and  bonds  physically 
located  outside  of  the  state  at  life  tenant's  death.  The  do- 
mestic stocks  were  held  subject  to  the  tax,  and  the  remaining 


POWER   TO   INVADE    PRINCIPAL  783 

property  not.    The  donee  died  prior  to  the  1911  amendment  to 
§220. 

IN  MATTER  OF  LORD,  186  N.  Y.  549,  the  husband  of  decedent, 
a  non-resident,  exercised  a  power  of  appointment  in  favor  of 
his  wife  who  died  ten  days  after  his  death.  The  property  over 
which  he  exercised  the  power  was  situated  within  this  state. 
Held,  that  the  property  transferred  by  the  power  vested  im- 
mediately upon  the  husband's  death  and  was  taxable  in  the 
estate  of  wife  although  she  did  not  live  to  take  possession  of  the 
property.  It  will  be  noted  that  in  husband's  estate  the  transfer 
by  the  exercise  of  appointment  was  not  taxable  (page  153  of 
111  App.  Div.)  because  the  surrogate  did  not  have  jurisdiction 
as  the  law  then  stood  (January  8,  1892);  this  jurisdictional 
defect  was  remedied  by  chap.  399,  Laws  1892,  vide  Matter  of 
Fitch,  160  N.  Y.  87,  supra,  page  231,  and  Matter  of  Embury, 
154  id.  746,  supra,  page  222. 

POWER  OF  REVOCATION 

Vide  Matter  of  Brandreth,  169  N.  Y.  437-442,  supra,  page  254 ; 
etiam  cases  sub  Gift  and  sub  Trust  Deed. 

POWER  OF  STATE  TO  TAX 

Vide  Constitutionality. 

POWER  TO  INVADE  PRINCIPAL 

Where  a  life  estate  is  created  with  the  power  reserved  to 
invade  principal  before  death  of  life  tenant,  the  case  comes 
within  that  portion  of  §  222  which  provides  that  "  Taxes  upon 
the  transfer  of  any  estate,  property  or  interest  therein  limited, 
conditioned,  dependent  or  determinable  upon  the  happening  of 
any  contingency  or  future  event  by  reason  of  which  the  fair 
market  value  thereof  cannot  be  ascertained  at  the  time  of  the 
transfer  as  herein  provided,  shall  accrue  and  become  due  and 
payable  when  the  persons  or  corporations  beneficially  entitled 
thereto  shall  come  into  actual  possession  or  enjoyment  thereof." 

IN  MATTER  OF  BABCOCK,  37  Misc.  445-447,  affirmed,  81  App. 
Div.  645,  the  court  say:  "There  is  nothing  in  the  amendment 
of  §  230  by  chapter  76  of  the  Laws  of  1899,  indicating  an  inten- 
tion to  repeal  or  limit  §  222  respecting  the  appraisement  of  this 
class  of  conditional  transfers." 

IN  MATTER  OF  GRANFIELD,  79  Misc.  374  (1913),  the  will  was 
construed  to  give  to  life  tenant  a  life  estate  with  the  absolute 


784  POWER   TO   INVADE    PRINCIPAL 

beneficial  power  of  disposition  of  tlie  principal  during  her  life- 
time with  remainder  over  of  such  part  as  she  may  not  dispose 
of  to  the  persons  named  in  the  will  of  testator.  Surrogate 
Sawyer,  Westchester  County,  in  his  opinion  said:  "Should  any 
tax  be  assessed  and  collected  at  the  present  time  upon  the 
interest  given  by  this  will  to  the  remaindermen  in  view  of  the 
fact  that  the  testator  gave  to  his  daughter,  not  only  a  life  estate 
in  the  land,  but  power  of  disposition  and  the  use  of  the  proceeds. 

"The  attorney  for  the  comptroller  contends  that  the  interest 
jjivcn  by  the  will  of  the  testator  in  the  second  clause  should  be 
immediately  appraised  and  assessed  and  the  tax  paid  under  the 
following  clause  of  §  230  as  amended  by  chapter  368  of  the  Laws 
of  1905: 

"When  property  is  transferred  in  trust  or  otherwise  and  the 
rights,  interest  or  estates  of  the  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in 
part  created,  defeated,  extended  or  abridged  a  tax  shall  be 
imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would 
be  possible  under  the  provisions  of  this  article,  and  such  tax  so 
imposed  shall  be  due  and  payable  forthwith  by  the  executor  or 
trustee  out  of  the  property  transferred. ' " 

The  surrogate  then  quotes  §  222,  and  says:  "In  this  case  the 
clear  market  value  of  the  property  transferred  cannot  be  as- 
certained until  the  death  of  Olive  L.  Granfield.  To  tax  the 
estate  at  the  present  time,  in  the  event  nothing  should  ulti- 
mately pass  to  the  remaindermen,  would  be  imposing  a  tax  upon 
the  property,  and  not  upon  the  transfer,  in  direct  conflict  with 
the  whole  theory  of  the  transfer  tax." 

After  quoting  from  Babcock  case,  supra,  he  says:  "The 
question  considered  in  the  Babcock  case  was  pursuant  to 
chapter  76  of  the  Laws  of  1899.  The  portions  of  sections  230 
and  222  as  cited  above  are  exactly  the  same  as  sections  230  and 
222  as  amended  by  chapter  368  of  the  Laws  of  1905. 

"  I  have  carefully  considered  section  230  of  the  Tax  Law,  as 
amended  by  chapter  368  of  the  Laws  of  1905  which  applies  to 
the  case  at  bar,  and  I  find  nothing  which  indicates  any  intention 
to  repeal,  by  implication  or  otherwise,  section  222  of  the  Tax 
Law  respecting  the  appraisement  of  this  class  of  conditional 
transfers.  Surely  the  fair  market  value  of  the  remainder  cannot 
be  ascertained  until  the  death  of  the  life  tenant,  at  which  time 
the  remaindermen,  being  the  parties  beneficially  entitled  thereto, 


PREVENTION   OF   CRUELTY  785 

will  come  into  the  actual  possession  or  enjoyment  of  what  may 
be  left  of  the  corpus  of  the  estate.  If  section  222  means  any- 
thing, it  must  mean  that  in  a  case  of  this  kind  the  taxing  of  the 
remainder  interest  should  be  postponed  until  such  tune  as  a 
clear  market  value  can  be  established  and  determined.  The 
clear  market  value  can  only  be  established  and  determined  at 
the  death  of  the  life  tenant.  *  *  * 

"An  order  may  be  entered  vacating  and  setting  aside  the 
order  assessing  the  tax  herein  in  so  far  as  the  same  may  affect 
the  remainder  interest,  and  the  time  for  appraising  and  assessing 
the  tax  upon  the  said  interest  transferred  by  the  will  of  Horace 
Granfield  may  be  postponed  until  the  death  of  the  life  tenant 
when  the  clear  market  value  can  be  ascertained  and  de- 
termined." 

The  Granfield  case  was  not  appealed  by  state  comptroller. 

Vide  opinion  of  state  comptroller,  dated  May  19,  1913,  quoted 
sub  Remainders,  post,  page  825. 

PRACTICE 

Preliminary  to  appointment  of  appraiser,  page  54. 

Designation  of  appraiser  and  notice  of  hearing,  page  72. 

The  appraisal,  page  82. 

The  schedules  of  assets,  page  96. 

The  schedules  of  deductions,  page  124. 

Vide  various  orders  indexed  sub  Forms. 

In  non-resident  estates,  vide  page  133. 

Vide  Appeal;  Deposition;  Interest;  Payment  of  Tax;  Surro- 
gate; Testimony;  Time  of  Tax;  Title  of  Proceeding;  Vacating 
Decree. 

PREMATURE  APPRAISEMENT 

Matter  of  Mason,  120  App.  Div.  738-740,  affirmed,  without 
opinion,  sub  nom.  Matter  of  Naylor,  189  N.  Y.  556,  supra, 
page  345;  Matter  of  Stuart,  N.  Y.  Law  Journal,  May  10,  1913, 
opinion  quoted  supra,  page  772;  Matter  of  De  Sala,  id.,  July  20, 
1912,  opinion  quoted  supra,  page  860. 

PRESENTLY  TAXABLE 

Vide  Time  of  Tax. 

PREVENTION  OF  CRUELTY" 

Vide  Enforcement  Laws  Concerning  Children  or  Animal?.^ 
50 


786  PRIMARY   RATES 

PRIMARY  RATES 

Vide  §  221a;  Matter  of  Schwarz,  209  N.  Y.  mem.,  supra, 
page  399.  For  discussion  and  tables  supra,  page  44. 

For  rates  under  Laws  1910,  chap.  706,  supra,  page  520,  in 
effect  July  11,  1910,  repealed  by  Laws  1911,  chap.  732,  in  effect 
July  21,  1911,  vide  Matter  of  Jourdan,  206  N.  Y.  653,  supra, 
page  386. 

PRIOR  STATUTES 

Arranged  in  chronological  order,  supra,  pages  403  et  seq. 

PRIVATE  BUSINESS  CORPORATIONS 

"There  may  be  no  'market  value'  for  the  stock  of  private 
business  corporations."  Matter  of  Valentine,  N.  Y.  Law  Jour- 
nal, December  4,  1913;  Matter  of  Rees,  208  N.  Y.  590,  supra, 
page  392;  and  cases  cited  sub  Closely  Held  Stock. 

PROCEDURE 

The  method  of  procedure  in  inheritance  tax  proceedings  is 
governed  by  the  statute  in  force  when  the  proceedings  are  taken, 
page  55. 

Preliminary  to  appointment  of  appraiser,  page  54. 

Designation  of  appraiser  and  notice  of  hearing,  page  72. 

The  appraisal,  page  82. 

The  schedules  of  assets,  page  96. 

The  schedules  of  deductions,  page  124. 

NON-RESIDENT  estates,  page  133. 

Vide  Appeal;  Deposition;  Interest;  Payment  of  Tax;  Surro- 
gate; Testimony;  Time  of  Tax;  Title  of  Proceeding;  Vacating 
Decree. 

PROFITS 

Vide  Closely  Held  Stock;  Good  Will. 

PROMISSORY  NOTES 

Notes  due  decedent  should  be  set  forth  in  Schedule  A3. 
As  to  testator  cancelling  notes  by  will  vide  Morgan  v.  Warner, 
45  App.  Div.  424-427,  affirmed,  on  opinion  below,  162  N.  Y. 
612,  supra,  page  237;  Matter  of  Wood,  40  Misc.  155,  supra, 
page  111. 

Taxation  of  note  in  litigation  should  be  reserved  "for  future 
appraisement  in  case  the  administrators  succeeded  in  collecting 
it."  Matter  of  Westurn,  152  N.  Y.  93-103. 


PROPERTY   HELD   IN   TRUST   OR  JOINTLY  787 

Notes  against  decedent  discussed  sub  Schedule  B3  supra, 
page  131. 

In  NON-RESIDENT'S  ESTATE  notes  are  not  subject  to  tax.  As 
to  law  prior  to  1911  amendment  vide  Matter  of  Tiffany,  143 
App.  Div.  327,  affirmed,  on  opinion  below,  202  N.  Y.  550, 
supra,  page  377;  Matter  of  Gibbs,  60  Misc.  645-646. 

PROPERTY 

Property  taxable,  vide  page  2.  As  to  non-resident  estate, 
page  133. 

PROPERTY  HELD  IN  TRUST  OR  JOINTLY 

(1)  The  decisions  are  not  uniform.        (6)  Delivery  of  the  bank  book  will 

(2)  Real  estate.  not  in  itself  make  trust  irrcv- 

(3)  Bank  accounts  in  joint  names.  ocable. 

Reported  decisions.                  •  (7)  Where  moneys  forming  the  ac- 

Opinions  published  in  N.  Y.  count  do  not  belong  to  dece- 

Law  Journal.  dent. 

Matter  of  Schroeder.  (8)  Money  deposited  by  a  wife  in 
Matter  of  Wunsch.  trust  for  her  husband,  she  re- 
Mere  form  of  account  does  taining  possession  of  bank 

not  control.  book,   is   taxable   upon   her 

Matter  of  Von  Bernuth.  death. 

Presumption  that  each  joint  (9)  Bond  and  mortgage  executed  to 

depositor  owns  one-half  of  a  husband  and  wife  as  mort- 

the  deposit.  gagees. 

(4)  Bank  accounts  in  trust.  (10)  Mortgages   assigned  to  dece- 

Tentative  trust  revocable  at  dent  and  her  daughter  with 

will.  right  of  survivorship. 

Where  transfer  not  absolute.  (11)  In  absence  of  proof  there  is  a 
Absolute  and  irrevocable  presumption  of  equal  owner- 

trust,  ship. 

(5)  Delivery  of  bank  book  to  cestui  (12)  Joint   ownership  of    personal 

que  trust.  property. 

In  transfer  tax  parlance  property  held  by  the  decedent  "in 
trust  for  or  jointly  with  another"  refers  more  especially  to 
that  class  of  cases  in  which  the  decedent  has  retained  posses- 
sion of  the  property  in  part  or  in  whole,  or  has  reserved  to 
himself  the  control  of  the  property  during  his  lifetime.  As  for 
instance,  where  A  opens  a  bank  account  in  name  of  "A  in 
trust  for  B,"  Matter  of  Halligan,  82  Misc.  30,  post,  page  798; 
or  in  name  of  "  A  and  B,  either  survivor  may  draw,"  Matter  of 
Durfee,  79  Misc.  655;  or  in  name  of  "A  and  B,  either  to  draw," 
Matter  of  Wunsch,  N.  Y.  Law  Journal,  January  24,  1913,  post, 


788  PROPERTY    HELD    IN   TRUST   OR  JOINTLY 

page  790.  Or  where  the  property,  such  as  a  mortgage,  is  held 
in  the  joint  namesxof  A  and  B,  Matter  of  Spring,  75  Misc.  586, 
post,  page  792;  Matter  of  Pitou,  79  id.  384.  Vide,  however, 
Matter  of  Heiser,  N.  Y.  Law  Journal,  July  19,  1913,  pott, 
page  804. 

For  discussion  of  kindred  transfers  vide  Contemplation  of 
Death,  supra,  page  643;  Gift,  supra,  page  697;  Ownership  of 
Property,  supra,  page  748;  Trust  Deed,  post,  page  867.  Etiam 
supra,  page  35. 

(1)  The  decisions  are  not  uniform 

The  cases  of  Matter  of  Stebbins,  52  Misc.  438  (1907),  and 
Matter  of  Graves,  id.  433,  both  Monroe  County,  are  frequently 
quoted  by  attorneys,  but  these  decisions  have  not  been  followed 
in  many  of  the  later  adjudications.  Matter  of  Kline,  65  Misc. 
446;  Matter  of  Von  Berauth,  N.  Y.  Law  Journal,  March  1,  1913, 
post,  page  791. 

The  question  has  not  been  passed  upon  by  the  Court  of 
Appeals  in  a  transfer  tax.  case,  and  as  the  conclusions  of  the 
lower  courts  have  not  been  uniform  it  would  seem  that  the 
practitioner  might  best  be  aided  by  a  rather  full  citation  of  the 
cases. 

The  decisions  deal  with  different  phases  of  the  question,  the 
transfer  being  taxable,  if  at  all,  under  the  provisions  of  subdivi- 
sion 4  of  §  220.  If  the  facts  of  a  particular  case  indicate  that 
the  transfer  was  not  within  the  meaning  and  intendment  of 
subdivision  4  then  the  transfer  is  not  taxable. 

The  cases  may  be  grouped  into  those  relating  to  bank  accounts 
and  those  dealing  with  personal  property  other  than  bank 
accounts. 

(2)  Real  estate. 

As  to  real  estate  held  in  joint  tenancy  there  does  not  appear 
to  be  any  reported  decision  in  a  transfer  tax  case,  except  the 
recent  case  of  Matter  of  Heiser,  N.  Y.  Law  Journal,  July  10, 
1913,  post,  page  804.  It  is  the  practice,  however,  not  to  tax  the 
transfer  of  real  property  where  it  is  held  either  in  joint  tenancy 
or  in  tenancy  by  the  entirety. 

It  would  seem  where  real  estate  is  held  either  by  joint  tenants, 
or  by  tenants  by  the  entirety,  that  there  is  not  a  taxable  transfer 
to  the  survivor  within  the  definition  of  the  statute.  Vide  supra, 
page  34, 


PROPERTY   HELD    IN   TRUST   OR   JOINTLY  789 

In  the  case  of  "joint  ownership  of  personal  property"  (Matter 
of  Heiser,  post,  page  804),  it  is  not  altogether  clear  that  the 
interest  which  matures  to  the  survivor  upon  the  death  of  the 
co-tenant  is  a  taxable  transfer,  even  though  the  joint  tenancy 
was  not  created  upon  a  consideration.  This  theory,  however, 
is  not  supported  by  the  recent  opinions  of  the  surrogates. 
Matter  of  Kline,  65  Misc.  446;  Matter  of  Pitou,  79  id.  384; 
Matter  of  Von  Bernuth,  N.  Y.  Law  Journal,  March  1,  1913, 
opinion  quoted  post,  page  791. 

'An  examination  of  the  dicta  of  the  courts  indicates  that  this 
branch  of  the  law  has  not  yet  received  its  final  interpretation. 

(3)  Bank  accounts  in  joint  names 

THE  REPORTED  DECISIONS  on  this  subject  include  Matter  of 
Wilkens,  144  App.  Div.  803;  Matter  of  Graves,  52  Misc.  433; 
Matter  of  Stebbins,  id.  438;  Matter  of  Kline,  65  Misc.  446; 
Matter  of  Durfee,  79  id.  655.  In  addition  to  these  cases  there 
have  been  opinions  of  the  surrogates  published  in  the  New  York 
Law  Journal  which  have  not  appeared  in  the  reports. 

OPINIONS  PUBLISHED  IN  NEW  YORK  LAW  JOURNAL. 

As  the  decisions  appearing  in  the  New  York  Law  Journal  are 
not  easily  accessible  it  seems  desirable  to  set  forth  certain  of 
them,  particularly  in  view  of  the  fact  that  they  refer  to  the 
reported  cases.  It  will  be  noted  that  reference  is  frequently 
made  to  cases  concerning  accounts  in  joint  names  which  have 
not  involved  the  question  of  the  transfer  tax. 

IN  MATTER  OF  CHARLES  SCHROEDER,  N.  Y.  Law  Journal, 
March  20,  1912,  an  appeal  from  the  order  fixing  tax  was  taken 
by  the  executrix  upon  the  ground  that  the  appraiser  erred  in 
including  as  part  of  the  taxable  assets  of  decedent's  estate  the 
sum  of  $5,492.42,  which  was  deposited  in  savings  banks  in  the 
name  of  Mary  Schroeder  and  Charles  Schroeder.  Decedent 
died  prior  to  the  1910  amendment.  Mary  Schroeder  was  the 
wife  of  the  decedent.  Surrogate  Cohalan  in  sustaining  the 
appeal  said:  "The  only  evidence  before  the  appraiser  as  to  the 
ownership  of  the  funds  deposited  in  the  savings  banks  was  an 
affidavit  by  Mary  Schroeder  in  which  she  alleges  that  the 
accounts  were  opened  by  her  in  her  own  name,  and  that  the 
money  deposited  in  opening  the  accounts  was  her  own  money; 
that  she  had  her  husband's  name  placed  upon  the  books  of 
deposit  for  the  purpose  of  enabling  him  to  draw  any  part  of  the 
money  in  the  event  of  her  being  sick  or  otherwise  unable  to 


PROPERTY   HELD    IN   TRUST   OR  JOINTLY 

make  the  withdrawal  in  person.  This  evidence  is  entirely 
insufficient  to  prove  that  the  money  on  deposit  in  the  savings 
banks  belonged  to  the  decedent.  On  the  contrary,  it  shows  that 
his  name  was  placed  upon  the  books  not  to  indicate  ownership 
of  the  funds,  but  for  the  purpose  of  convenience  in  drawing 
(Matter  of  Bolin,  136  N.  Y.  177).  The  construction  most 
favorable  to  the  State  Comptroller  which  could  be  placed  upon 
the  circumstances  surrounding  the  openings  of  the  account  in 
the  savings  banks  and  the  deposit  of  money  therein  would  only 
justify  a  presumption  of  equal  ownership  in  the  fund  (Matter  of 
Wylkens,  144  App.  Div.  803).  This  construction  would  seduce 
the  amount  of  decedent's  estate  to  less  than  $10,000,  and  make 
it,  therefore,  exempt  from  taxation.  The  order  fixing  tax  will 
be  reversed  and  an  order  may  be  submitted  on  notice  exempting 
the  estate  from  taxation." 

IN  MATTER  OF  JOSEPH  WUNSCH,  N.  Y.  Law  Journal,  Jan- 
uary 24,  1913,  the  report  of  the  appraiser  was  remitted,  Surro- 
gate Fowler  saying:  "The  affidavit  submitted  to  the  appraiser 
merely  states  that  the  bank  accounts  were  held  jointly  by  the 
decedent  and  his  wife.  An  affidavit  submitted  by  the  executrix 
on  this  appeal  shows  that  the  bank  books  containing  a  record 
of  the  deposits  bore  the  following  inscriptions:  'Joseph  Wunsch 
and  wife,  or  either/  'Joseph  Wunsch  and  wife,  either  to  draw,' 
'Joseph  Wunsch.  or  Magdalena  Wunsch.'  This  affidavit  also 
shows  that  all  of  the  money  so  deposited  belonged  to  the  dece- 
dent. There  is  no  evidence  to  show  that  decedent's  wife  knew 
anything  about  the  bank  deposits  made  by  the  decedent,  nor 
is  there  anything  to  show  in  whose  possession  the  bank  books 
were  kept,  or  whether  both  parties  had  equal  access  to  them. 
Without  this  evidence  it  is  impossible  for  the  court  to  determine 
whether  the  decedent  at  the  time  of  making  the  deposits  in- 
tended to  vest  in  his  wife  equal  ownership  with  him  in  the  entire 
deposits  or  whether  he  intended  that  the  money  should  belong 
to  him  during  his  life  and  that  it  should  become  the  property  of 
his  wife  only  in  the  event  of  her  surviving  him.  The  fact  that 
either  could  draw  the  whole  amount  deposited  at  any  time  while 
they  were  both  living  would  seem  to  indicate  that  he  did  not 
intend  to  make  a  gift  inter  vivos  of  the  entire  deposits  to  her 
(Augeburg  v.  Shurtliff,  180  N.  Y.  146).  If  the  gift  was  not 
completed  during  the  life  of  her  husband,  and  took  effect  only 
upon  his  death,  it  would  be  taxable  (Matter  of  Pierce,  132  App. 
Div.  465).  As  the  evidence  before  the  appraiser  was  insufficient 


PROPERTY   HELD    IN    TRUST   OR  JOINTLY  791 

to  sustain  the  finding  that  the  money  in  the  various  savings 
banks  belonged  to  the  decedent  at  the  time  of  his  death  or  was 
transferred  to  the  widow  as  a  gift  intended  to  take  effect  at  the 
death  of  the  decedent,  the  order  fixing  tax  will  be  reversed  and 
the  appraiser's  report  remitted  to  him  for  the  purpose  of  taking 
additional  testimony  upon  the  points  above  indicated." 

"THE  MERE  FORM  OF  THE  ACCOUNT,"  said  Surrogate  Cohalan 
in  Matter  of  Myers,  129  N.  Y.  Supp.  194,  "will  not  be  regarded 
as  sufficient  to  establish  an  intent  on  the  part  of  the  person 
making  the  deposit  to  give  the  individual  whose  name  is  asso- 
ciated with  that  of  the  depositor  on  the  books  of  the  bank  or 
trust  company  a  joint  interest  in  the  deposit,  with  the  right  of 
survivorship  (Kelly  v.  Beers,  194  N.  Y.  49;  Matter  of  Bolin,  136 
N.  Y.  177;  Farrelly  v.  Emigrant  Ind.  Sav.  Bank,  92  App.  Div. 
529;  Slee  v.  Kings  Co.  Sav.  Ins.,  78  App.  Div.  534).  *  *  *" 

IN  MATTER  OF  CAROLINE  DE  FOREST  VON  BERNUTH,  N.  Y. 
Law  Journal,  March  1,  1913,  Surrogate  Fowler  discusses  the 
question  of  the  taxability  of  the  interest  of  the  survivor  in  a  joint 
account  the  surrogate  saying:  "In  June,  1912,  the  decedent  and 
her  husband  deposited  a  sum  of  money  with  the  Title  Guarantee 
&  Trust  Company,  and  at  the  time  of  making  the  deposit  they 
signed  a  statement  declaring  that  they  were  joint  owners  of  the 
money  then  deposited,  and  that  any  future  deposits  made  by 
either  of  them  should  be  their  joint  property,  'that  is,  either 
one  of  us  before  or  after  the  death  of  the  other  may  sign  drafts 
or  orders  on  said  account  and  receive  the  money  thereon  before 
or  after  the  death  of  the  other,  and  at  the  death  of  either  the 
survivor  shall  take  absolute  and  single  ownership  of  the  balance 
then  due  the  account.'  From  the  affidavits  submitted  to  the 
appraiser  it  appears  that  none  of  the  husband's  money  was 
deposited  in  this  account,  but  that  the  deposit  consisted  en- 
tirely of  decedent's  money.  About  five  days  before  the  death 
of  decedent  she  asked  her  husband  to  draw  $15,000  from  the 
account  and  to  use  this  sum  in  purchasing  for  himself  an  auto- 
mobile and  stock  securities.  The  husband  drew  the  said  amount 
of  $15,000  and  placed  it  in  his  personal  account.  At  the  time 
of  decedent's  death  there  was  a  balance  of  $2,034.58  on  deposit 
in  the  joint  account.  The  appraiser  included  this  amount, 
together  with  the  $15,000  deposited  hi  the  husband's  personal 
account,  in  the  taxable  assets  of  decedent's  estate.  The  executor 
contends  that  this  was  error;  that  neither  the  $2,034.58  nor  the 
$15,000  is  subject  to  a  transfer  tax  as  part  of  decedent's  estate. 


792  PROPERTY   HELD    IN    TRUST   OR  JOINTLY 

"  The  transfer  tax  statute  provides  that  a  tax  shall  be  imposed 
when  the  property  is  transferred  by  will,  by  the  intestate  laws, 
or  as  a  gift  given  in  contemplation  of  death  or  intended  to  take 
effect  at  or  after  death.  If  the  transfer  is  effected  in  any  other 
way  it  is  without  the  statute  and  therefore  not  subject  to  a  tax. 
The  decisions  of  the  courts  of  this  State  upon  the  question  of  the 
taxability  of  the  interest  of  the  survivor  in  a  joint  account  are 
not  uniform. 

"In  the  MATTER  OF  STEBBINS  (52  Misc.  538)  it  appeared 
that  the  money  deposited  belonged  to  the  decedent,  and  that 
the  deposit  was  made  'Julia  A.  and  H.  H.  Stebbins,  either  or 
the  survivor  of  them  may  draw.'  It  was  held  that  the  money  on 
deposit  at  the  death  of  the  decedent  was  not  subject  to  a  trans- 
fer tax.  In  the  MATTER  OF  KLINE  (65  Misc.  446)  the  money 
was  deposited  in  the  joint  names  of  decedent  and  his  wife. 
Part  of  the  money  belonged  to  each  at  the  time  the  deposit  was 
made.  The  account  was  payable  to  either  or  the  survivor.  The 
court  held  that  such  portion  of  the  money  deposited  as  did  not 
belong  to  the  survivor  at  the  time  the  deposit  was  made  was 
taxable. 

"In  the  MATTER  OF  SPRING  (75  Misc.  586)  mortgages  were 
assigned  to  the  decedent  and  her  daughter  by  instruments  which 
contained  provisions  that  the  survivor  of  the  two  assignees 
should  become  the  absolute  owner  of  the  bonds  and  mortgages 
and  that  neither  should  have  power  to  affect  the  rights  of  the 
last  survivor.  It  was  held  that  one-half  of  the  value  of  the 
bonds  and  mortgages  was  taxable  upon  the  death  of  the  dece- 
dent. To  the  same  effect  is  MATTER  OF  PITOU  (reported  in 
New  York  Law  Journal,  February  8,  1913;  79  Misc.  384). 

11  WHILE  JOINT  OWNERSHIP  OF  PERSONAL  PROPERTY  is  NOW 
RECOGNIZED  by  the  courts  (Kelly  v.  Beers,  194  N.  Y.  49)  and  by 
the  statute  law  of  the  State  (sec.  144  of  the  Banking  Law)  the 
respective  rights  and  interests  of  the  joint  owners  do  not  seem 
to  be  definitely  fixed.  As  a  matter  of  fact  the  expression  "joint 
owners"  when  applied  to  personal  property  is  not  definitely 
descriptive;  it  conveys  no  well-defined  meaning  as  to  the  re- 
spective rights  of  the  owners  of  the  property.  For  instance,  in 
the  matter  under  consideration  all  the  money  deposited  with 
the  trust  company  belonged  to  the  decedent  at  the  time  the 
deposit  was  made.  As  soon  as  the  money  was  deposited  the 
decedent  and  her  husband  became  joint  owners  of  it.  But 
immediately  thereafter,  and  while  the  so-called  joint  ownership 


PROPERTY   HELD    IN    TRUST   OR   JOINTLY  793 

continued,  the  husband  could  draw  the  entire  sum  so  deposited 
and  use  it  for  any  purpose  he  desired.  In  other  words,  as  soon 
as  he  drew  it  from  the  bank  it  became  his  individual  property. 
It  was  joint  property  while  it  was  in  the  bank;  it  became  in- 
dividual property  as  soon  as  it  was  drawn  out.  But  if  there  was 
joint  ownership  of  the  deposit  each  of  the  owners  would  have 
some  right  to  the  property,  and  this  would  be  inconsistent  with 
an  absolute  right  on  the  part  of  either  to  dispose  of  all  the 
property.  Therefore  it  would  appear  that  the  expression  is 
neither  accurate  nor  definite. 

"The  deposit  of  money  under  circumstances  similar  to  those 
in  this  matter  would  seem  to  constitute  not  a  joint  ownership 
of  the  property,  but  a  right  on  the  part  of  either  to  draw  any 
part  of  the  money  on  deposit,  with  the  absolute  right  in  the 
survivor  to  the  amount  on  deposit  at  the  death  of  the  other 
party  to  the  arrangement.  The  right  of  the  survivor  to  the 
amount  on  deposit  is  settled  by  authority  (Kelly  v.  Beers,  supra). 
As  none  of  the  property  deposited  with  the  trust  company  be- 
longed to  decedent's  husband  before  the  deposit  was  made,  his 
right  to  draw  any  part  of  it  or  to  take  possession  of  what  re- 
mained after  the  death  of  his  wife  must  have  been  derived 
either  from  a  contract  with  the  decedent  or  through  a  gift  from 
her.  There  is  no  evidence  of  any  contractual  obligation  assumed 
by  the  husband  as  a  consideration  for  obtaining  the  right  to 
draw  the  money  deposited  by  the  decedent.  This  right  must 
therefore  have  been  a  gift  from  the  decedent.  There  was  not, 
however,  a  valid  gift  inter  vivos  of  all  the  money  on  deposit, 
because  in  order  to  make  such  a  gift  it  would  be  necessary  that 
the  donor  should  divest  herself  of  dominion  over  the  subject 
of  the  gift  and  deliver  it  to  the  donee  (Gegan  v.  Union  Trust 
Co.,  129  App.  Div.  184;  aff'd  198  N.  Y.  541).  But  the  decedent 
did  not  divest  herself  of  dominion  over  the  property;  she  re- 
served the  right  to  draw  all  of  it  and  use  it  for  her  own  purposes. 
The  husband  had,  so  far  as  the  bank  was  concerned,  the  same 
right  as  the  decedent  to  draw  all  the  money  on  deposit,  and  the 
bank  could  not  refuse  payment  to  him.  Whether  the  decedent 
could  compel  him  to  repay  to  her  any  sum  withdrawn  by  him 
from  the  bank  would  depend  upon  the  terms  of  the  contract  or 
agreement  entered  into  by  the  parties  at  the  time  the  deposit 
was  made.  The  appraiser's  report  does  not  contain  any  evidence 
of  such  a  contract  or  agreement . 

"THE    DECLARATION    OF   JOINT  .OWNERSHIP    FILED    WITH    THE 


794  PROPERTY   HELD    IN    TRUST   OR  JOINTLY 

BANK  would  justify  the  bank  in  paying  the  entire  deposit  to 
either  the  decedent  or  her  husband,  but  I  am  inclined  to  think 
that  it  did  not  of  itself  divest  the  decedent  of  the  right  of  owner- 
ship in  the  fund  and  that  she  did  not  intend  by  such  declaration 
that  her  husband  could  withdraw  the  entire  amount  on  deposit 
and  use  it  for  his  own  purposes.  The  fact  that  she  did  not  make 
a  gift  of  the  entire  amount  so  deposited  to  her  husband  indicates 
that  she  did  not  desire  to  relinquish  her  rigHt  of  ownership  to 
the  property.  To  the  right  which  the  husband  had  during  the 
lifetime  of  his  wife  to  draw  any  part  of  the  money  from  the 
bank  was  added,  upon  her  death,  the  absolute  right  of  ownership 
to  the  amount  then  on  deposit.  This  latter  right  he  did  not  have 
before  and  could  not  have  until  her  death.  It  was  therefore  a 
gift  intended  to  take  effect  at  her  death  within  the  meaning  of 
the  transfer  tax  statute,  and  the  amount  on  deposit  in  the  so- 
called  joint  account  at  the  date  of  decedent's  death  is  subject 
to  a  tax. 

"That  the  deposit  was  made  in  the  particular  form  above 
described  for  purposes  of  convenience  rather  than  with  the 
intention  of  conferring  the  right  of  ownership  upon  the  husband 
is  apparent  from  the  affidavit  made  by  her  husband,  in  which 
it  is  stated  that  about  five  days  before  decedent's  death  she 
asked  him  to  draw  $15,000  from  the  bank  and  to  use  it  in  the 
purchase  of  an  automobile  and  stock  securities  for  himself.  If 
it  was  understood  between  them  that  he  had  an  equal  right  with 
her  to  the  money  on  deposit  it  would  not  be  necessary  for  her  to 
authorize  him  to  draw  $15,000  and  use  it  for  the  purchase  of 
property  that  was  to  belong  to  him.  The  $15,000  was  withdrawn 
from  the  joint  account  by  decedent's  husband  before  her  death 
and  was  deposited  by  him  in  his  personal  account.  It  was 
therefore  a  valid  gift  from  the  decedent  to  her  husband.  While 
it  appears  that  this  gift  was  made  five  days  before  decedent's 
death  it  is  alleged  that  at  the  time  of  making  the  gift  she  had  no 
reason  to  apprehend  her  early  demise,  and  as  this  allegation 
was  not  contradicted  by  the  State  Comptroller  it  cannot  be 
held  that  the  gift  was  made  in  contemplation  of  death.  It  is 
therefore  exempt  from  taxation." 

Vide  MATTER  OF  HEISER,  post,  page  804. 

IN  MATTER  OF  VIRGINIA  WALLACE,  June  21,  1913,  Surrogate 
Ketcham  held:  "By  the  order  appealed  from  a  transfer  tax  is 
imposed  upon  one-half  of  the  balance  in  certain  savings  bank 
accounts  which  were  opened  by  the  appellant  and  the  decedent 


PROPERTY    HELD    IN   TRUST   OR  JOINTLY  795 

in  the  familiar  form  in  their  joint  names.  As  to  all  of  these 
accounts  it  is  clear  that  a  part  of  the  fund  which  they  represent 
belonged  to  the  decedent  at  the  time  when  the  accounts  were 
opened,  and  that  it  is  impossible  to  distinguish  the  portion  which 
she  contributed  to  the  common  fund.  HENCE,  THE  CASE  is  CON- 
TROLLED BY  THE  PRESUMPTION  THAT  EACH  DEPOSITOR  OWNED 

ONE-HALF  OF  THE  DEPOSITS  (Wetherow  v.  Lord,  41  App.  Div. 
413;  Matter  of  Kaupper,  141  id.,  54;  Matter  of  Wilkens,  144  id., 
803;  Matter  of  Pitou,  79  Misc.  384).  The  decedent's  one- 
half,  therefore,  passed  to  the  appellant  by  a  transfer  which 
was  properly  taxable.  The  order  appealed  from  is  affirmed." 

(4)  Bank  accounts  in  trust 

The  recent  decision  in  MATTHEWS  v.  BROOKLYN  SAVINGS 
BANK,  208  N.  Y.  508,  although  not  in  a  transfer  tax  matter  still 
is  pertinent  as  laying  down  a  rule  relative  to  deposits  made  by 
decedent  "in  trust "  for  another.  Chief  Justice  Cullen  in  deliver- 
ing the  opinion  of  the  court  reversing  the  Appellate  Division,  said : 
"The  action  is  to  procure  the  adjudication  that  certain  moneys 
deposited  by  Mary  Kelly,  now  deceased,  in  The  Brooklyn 
Savings  Bank,  in  trust  for  the  respondent,  and  not  withdrawn, 
are  owned  by  the  respondent.  The  appellant  asserting  that 
they  belonged  to  Mary  Kelly  at  the  time  of  her  death  claims 
them  by  virtue  of  her  will. 

"The  following  facts  were  found  by  the  Special  Term:  On 
July  26,  1904,  Mary  Kelly  deposited  in  the  savings  bank 
$2,839.00  belonging  to  herself,  and  received  from  it  a  pass  book 
in  which  the  deposit  was  evidenced  by  the  writing:  'The  Brook- 
lyn Savings  Bank  in  account  with  Mary  Kelly  in  trust  for 
Margaret  Matthews  (cousin)/  and  the  statement  of  the  sum 
as  a  deposit.  The  respondent  accompanied  Mary  Kelly  to  the 
bank  on  that  occasion,  and  was  present  there  with  her  while 
the  deposit  was  being  made  and  the  account  entered.  Mary 
Kelly  on  that  day  delivered  the  pass  book  to  the  respondent 
for  safekeeping,  and  the  respondent  then  read  it  and  knew  that 
the  deposit  and  account  was  entered  as  therein  stated.  The 
respondent  retained  possession  of  the  pass  book  until  about 
May  2,  1905,  when  it  was  redelivered  to  Mary  Kelly,  who  there- 
after retained  possession  of  it  until  the  account  evidenced  by  it 
was  closed.  Mary  Kelly,  at  various  times  beginning  with 
August  13,  1907,  down  to  April  23,  1910,  withdrew  moneys 
from  the  account,  and  on  April  23,  1910,  withdrew  the  whole  of 


79()  PROPERTY   HELD    IN    TRUST   OR   JOINTLY 

the  balance  thereof,  to  wit,  seventeen  hundred  and  forty-four 
and  thirty  one-hundredths  dollars,  and  deposited  it  in  another 
account  which  she  had  with  the  bank,  and  this  sum  (less  a 
small  amount  withdrawn  by  consent  of  all  the  parties)  remains 
in  the  bank  and  is  the  subject  of  this  action.  The  conclusions 
of  law  were,  in  substance,  a  gift  was  not  made  to  the  respondent, 
but  a  tentative  trust  was  created,  revocable  at  the  will  of  Mary 
Kelly,  who  did  revoke  it  by  the  withdrawals  and  redeposit,  and 
the  moneys  were  a  part  of  her  estate.  The  facts  found  support 
the  conclusions  of  law  and  the  judgment  rendered  upon  them. 

"The  deposit  was  in  form  A  TENTATIVE  AND  REVOCABLE 
TRUST.  The  acts  of  the  depositor  which  are  or  can  be  invoked 
by  the  respondent  as  making  it  irrevocable  or  a  completed  gift, 
as  a  matter  of  law,  are,  stated  generally  and  yet  accurately, 
permitting  the  respondent  to  know  of  the  deposit  and  its  nature, 
and  delivering  the  pass  book  to  her  for  safekeeping.  Those 
acts  considered  separately  or  jointly  do  not  conclusively  estab- 
lish either  the  one  or  the  other.  (Hemmerich  v.  Union  Dime 
Savings  Inst.,  205  N.  Y.  366;  Matter  of  Totten,  179  N.  Y.  112). 
The  intention  of  the  depositor  and  whether  or  not  it  was  effec- 
tuated were  questions  determinable  by  the  Special  Term,  from 
those  acts  and  the  other  facts  found. 

"The  order  of  the  Appellate  Division  should  be  reversed  and 
judgment  of  the  Special  Term  reinstated,  with  costs  to  appellant 
in  both  courts." 

WHERE  TRANSFER  NOT  ABSOLUTE. 

IN  MATTER  OF  HENRY  I.  BARBEY,  114  N.  Y.  Supp.  725,  the 
money  deposited  by  the  decedent  in  savings  banks  in  form 
"in  trust"  for  his  several  children  was  his  own  property.  Sur- 
rogate Thomas  held  that  "no  contract  obligation  with  relation 
to  such  deposits  existed.  No  absolute  transfers  to  the  trust 
beneficiaries,  by  delivery  of  the  bank  books  or  otherwise  was 
shown;  and  it  is  not  claimed  that  the  fact  of  the  deposits  was 
made  known  by  the  decedent  to  the  beneficiaries,  or  any  of  them. 
Upon  these  facts  the  depositor  retained  a  power  to  revoke  the 
trusts  at  his  pleasure  by  making  withdrawals  of  money  for  his 
own  use,  and  the  rights  of  the  beneficiaries  are  restricted  to  the 
balances  remaining  at  his  death.  Matter  of  Totten,  179  N.  Y. 
112,  71  N.  E.  748,  70  L.  R.  A.  711. 

"The  depositor  is  also  presumed  to  have  intended  that  each 
trust  shall  come  to  an  end  and  that  the  fund  shall  revert  to  his 
estate  if  the  beneficiary  does  not  survive  him.  Matter  of  U.  S. 


PROPERTY   HELD    IN   TRUST   OR  JOINTLY  797 

Trust  Co.,  117  App.  Div.  178,  102  N.  Y.  Supp.  271,  affirmed, 
189  N.  Y.  500,  81  N.  E.  1177.  In  other  words  the  decedent 
reserved  to  himself  all  of  the  rights  of  ownership  in  the  deposits 
until  his  death,  and  granted  only  interests  "intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  such  death.'  Such 
interests  are  identical  with  those  passing  by  a  will.  The  trans- 
fers are  within  the  purpose  and  express  language  of  the  statute 
and  they  are  taxable.  Matter  of  Green,  153  N.  Y.  223,  47  N.  E. 
292;  Matter  of  Brandreth,  169  N.  Y.  437,  62  N.  E.  563,  58 
L.  R.  A.  148,  reversing  58  App.  Div.  575,  69  N.  Y.  Supp.  142; 
Matter  of  Cornell,  170  N.  Y.  423,  63  N.  E.  445,  modifying  66 
App.  Div.  162,  73  N.  Y.  Supp.  32;  Matter  of  Bostwick,  160  N.  Y. 
489,  55  N.  E.  208;  Matter  of  Skinner,  45  Misc.  Rep.  559,  92 
N.  Y.  Supp.  972;  Matter  of  Sharer,  36  Misc.  Rep.  502,  73  N.  Y. 
Supp.  1057." 

ABSOLUTE  AND  IRREVOCABLE  TRUST. 

Itf  MATTER  OF  PIERCE,  132  App.  Div.  465  (Fourth  Depart- 
ment), reversing  60  Misc.  25,  it  was  held  that  savings  bank 
accounts  in  name  of  decedent  as  trustee  for  a  particular  person 
named,  were  under  the  circumstances  set  forth  in  opinion  of 
court,  completed  and  irrevocable  gifts  during  lifetime  of  dece- 
dent and  therefore  not  taxable. 

(5)  Delivery  of  bank  book  to  cestui  que  trust 

IN  MATTER  OF  MATTHEW  FARRELL,  N.  Y.  Law  Journal, 
January  3,  1912,  Surrogate  Fowler  held:  "Decedent  some  years 
before  his  death  deposited  money  in  various  savings  banks  in 
trust  for  his  children.  The  deposits  for  each  child  were  made  in 
the  following  form:  ' Matthew  Farrell  in  trust  for  son  Francis 
Farrell.'  The  decedent  died  on  the  23d  day  of  February,  1910. 
On  the  15th  of  February,  1910,  he  asked  his  son  to  get  him  the 
bank  books,  in  which  were  recorded  the  various  deposits  made 
by  him  in  trust  for  his  children.  After  receiving  them  he  gave 
to  each  of  the  children  the  bank  book  containing  a  record  of  the 
deposits  made  for  his  or  her  benefit.  All  the  bunk  books  were 
then  given  to  a  son  of  decedent  for  safekeeping,  and  were  sub- 
sequently deposited  by  him  in  the  safe  deposit  box  rented  by  the 
decedent.  The  bank  books  remained  in  the  safe  deposit  box 
until  the  death  of  the  decedent. 

"The  appraiser  included  in  the  taxable  assets  of  decedent's 
estate  the  amounts  deposited  by  the  decedent  for  the  cestuis 
que  trustent,  as  shown  by  the  different  bank  books.  The  ad- 


798  PROPERTY   HELD   IN   TRUST   OR  JOINTLY 

ministrator  appeals  from  the  order  fixing  tax,  alleging  that  these 
deposits  were  not  taxable.  The  deposit  by  the  decedent  of  his 
own  money  in  trust  for  his  children  constituted  a  revocable 
trust  until  some  unequivocal  act  on  his  part  showed  that  he 
desired  the  gift  to  become  absolute.  The  unequivocal  act  was 
the  delivery  of  the  bank  books  to  the  cestuis  que  trustent 
(Matter  of  Totten,  179  N.  Y.  112).  The  delivery  of  the  bank 
books  to  the  cestuis  que  trustent  constituted  a  valid  gift  inter 
vivos  by  the  decedent  to  his  children,  and  such  a  gift  is  not 
taxable  (Matter  of  Spaulding,  49  App.  Div.  541;  aff'd  163  N.  Y. 
607;  Matter  of  Pierce,  132  App.  Div.  464),  unless  it  is  made  in 
contemplation  of  death  (subdiv.  4,  sec.  220  of  the  Transfer  Tax 
Law). 

"THE  BURDEN  OF  PROOF  was  upon  the  State  Comptroller  to 
show  that  the  gift  was  made  in  contemplation  of  death  (Matter 
of  Palmer,  117  App.  Div.  360);  and  as  the  only  evidence  ad- 
duced before  the  appraiser  showed  that  the  decedent  at  the  time 
he  consummated  the  gift  by  delivery  of  the  bank  books  was  in 
his  usual  condition  of  reasonably  good  health  and  that  nothing 
had  transpired  to  indicate  that  he  contemplated  his  dissolution 
in  the  immediate  future,  the  burden  was  not  sustained  by  the 
State  Comptroller." 

(6)  Delivery  of  the  bank  book  will  not  in  itself  make  trust 
irrevocable 

IN  MATTER  OF  HALLIGAN,  82  Misc.  30,  Surrogate  Cohalan 
held:  "The  decedent  died  on  the  9th  day  of  September,  1912,  a 
resident  of  this  State.  At  various  times  prior  to  the  date  of 
his  death  he  opened  accounts  with  savings  banks  in  this  city, 
the  caption  of  each  account  being  'James  Halligan,  in  trust  for 
Elizabeth  A.  Halligan.'  The  transfer  tax  appraiser  found  that 
the  entire  amount  remaining  on  deposit  with  these  banks  at  the 
date  of  decedent's  death  was  the  sum  of  $27,517.  He  included 
this  amount  in  the  taxable  assets  of  decedent's  estate.  From 
the  order  entered  upon  his  report  the  executrix  has  taken 
this  appeal. 

"Elizabeth  A.  Halligan,  the  executrix  herein,  was  the  wife  of 
the  decedent.  She  claims  that  the  $27,517  deposited  in  the 
name  of  the  decedent  in  trust  for  her  was  her  individual  property, 
having  been  given  to  her  by  the  decedent  as  a  gift  inter  vivos. 
The  affidavits  submitted  to  the  appraiser  on  behalf  of  the  estate 
allege  that  the  decedent  consulted  with  his  wife  before  opening 


PROPERTY   HELD   IN   TRUST   OR  JOINTLY  799 

the  accounts  in  the  various  savings  banks,  and  that  in  some  in- 
stances she  went  with  him  to  the  banks  at  the  time  the  accounts 
were  opened;  that  the  decedent  handed  over  to  her  the  savings 
bank  books  showing  the  deposits  made  in  the  banks,  and  that 
she  had  possession  of  these  books  'at  our  place  of  residence' 
at  the  time  of  decedent's  death. 

"In  order  to  constitute  a  valid  gift  inter  vivos  there  must  be  a 
delivery  to  the  donee  of  the  thing  constituting  the  gift,  coupled 
with  an  intention  on  the  part  of  the  donor  to  transfer  to  the 
donee  the  right  of  ownership  in  and  dominion  over  the  property 
(Beaver  v.  Beaver,  117  N.  Y.  421;  Gannon  v.  McGuire,  160 
N.  Y.  476;  Hemmerick  v.  Union  Dime  Sav.  Bank,  205  N.  Y. 
366). 

"It  is  conceded  that  all  the  money  deposited  by  the  decedent 
as  trustee  for  his  wife  belonged  to  him.  The  affidavits  sub- 
mitted to  the  appraiser  on  behalf  of  the  estate  do  not  allege  that 
the  decedent  told  his  wife  at  the  time  he  made  the  deposits  that 
he  was  giving  the  money  to  her,  nor  do  they  allege  that  he  said 
anything  about  a  gift  when  he  gave  her  the  bank  books.  There 
is  no  allegation  that  the  decedent  gave  the  money  deposited  in 
the  various  banks  as  a  gift  to  his  wife.  The  circumstances  sur- 
rounding the  deposit  and  the  possession  of  the  books  by  the 
decedent's  wife  are  entirely  consistent  with  the  assumption  that 
the  deposit  was  made  in  the  name  of  decedent  in  trust  for  his 
wife  as  a  matter  of  convenience,  and  that  the  books  were  given 
to  her  for  the  purpose  of  safe-keeping  (Matter  of  Bolin,  136 
N.  Y.  177;  Kelly  v.  Beers,  194  N.  Y.  49).  *  *  *  But  de- 
livery of  the  passbook  will  not  in  itself  make  the  trust  irrevo- 
cable; there  must  be  words  of  gift  or  a  declaration  that  the 
depositor  is  thereby  giving  to  the  cestui  que  trust  the  money 
to  the  credit  of  the  depositor  in  the  bank  which  issued  the  pass 
book  (Matthews  v.  Brooklyn  Savings  Bank,  208  N.  Y.  508). 
As  the  decedent  did  not  make  a  valid  gift  inter  vivos  of  the 
money  deposited  in  trust  for  his  wife,  and  the  trust  was  not 
irrevocable  until  the  death  of  the  decedent,  the  property  passed 
to  her  as  a  gift  intended  to  take  effect  at  or  after  death,  and  is 
therefore  subject  to  a  tax  ^Matter  of  Kline,  65  Misc.  446; 
Matter  of  Von  Bernuth,  N.  Y.  Law  Journal,  March  1,  1913)." 

(7)  Where  moneys  forming  the  account  do  not  belong  to 

decedent 
Bank  accounts  in  name  of  decedent  in  trust  for  one  May 


800  PROPERTY   HELD    IN   TRUST   OR  JOINTLY 

Goodrich  were  held  to  be  her  property  and  not  taxable  hi  MAT- 
TER OF  CHARLES  H.  HARRIOTT,  N.  Y.  Law  Journal,  March  1, 
1913.  Surrogate  Fowler  said:  "The  bank  books  were  at  the 
time  of  decedent's  death  in  a  safe  deposit  box  of  John  H.  Sco- 
field,  because  neither  the  decedent  nor  said  May  Goodrich  had 
a  safe  deposit  box. 

"The  testimony  of  May  Goodrich  before  the  appraiser  was 
that  she  gave  to  the  decedent  to  deposit  in  said  accounts  at 
various  times  money  received  by  her  from  different  sources 
during  the  term  of  her  employment  by  decedent,  a  period  of 
thirteen  years.  It  also  appears  that  she  exercised  some  control 
over  the  accounts,  inasmuch  as  she  drew  money  from  one  of 
them,  and  at  her  suggestion,  the  decedent  drew  money  from 
another  and  gave  it  to  her  for  her  own  use.  These  facts  are 
corroborated  hi  part  by  her  own  affidavit  made  prior  to  the 
hearing  before  the  appraiser  and  the  affidavit  of  said  John  H. 
Scofield,  who  was  the  executor  of  decedent's  will,  forming  a  part 
of  the  appraiser's  report.  There  is  no  doubt,  therefore,  that 
said  May  Goodrich  proved  that  the  money  making  up  the  ac- 
counts belonged  to  her,  and  that  the  accounts  were  opened  by 
the  decedent  with  her  knowledge  and  approval. 

"In  the  Matter  of  Totten,  179  N.  Y.  112,  the  rule  governing 
title  to  trust  accounts  in  savings  bank  was  laid  down  as  follows: 
'  A  deposit  by  one  person  in  his  own  name,  as  trustee  for  another, 
standing  alone  does  not  establish  an  irrevocable  trust  during 
the  lifetime  of  the  testator.  It  is  a  tentative  trust  merely, 
revocable  at  will,  until  the  depositor  dies  or  completes  the  gift 
in  his  lifetime  by  some  equivalent  act  or  declaration,  such  as 
the  delivery  of  the  pass  book  or  notice  to  the  beneficiary.  In 
case  the  depositor  dies  before  the  beneficiary,  without  revoca- 
tion or  some  decisive  act  or  declaration  of  disaffirmance,  the 
presumption  arises  that  an  absolute  trust  was  created  as  to  the 
balance  on  hand  at  the  death  of  the  testator.' 

"Applying  this  rule  to  the  case  under  consideration  we  find 
that  the  decedent  opened  the  accounts  with  the  full  knowledge 
and  approval  of  the  claimant;  that  the  bank  books  were  in  the 
possession  of  a  mutual  friend,  and  that  the  moneys  forming  the 
accounts  belonged  to  the  claimant  and  to  no  other  person. 
Taking  all  these  circumstances  into  consideration,  the  conclu- 
sion is  the  money  represented  by  these  three  bank  accounts  did 
not  form  a  part  of  the  estate  of  decedent,  but  belonged  ab- 
solutely to  May  Goodrich." 


PROPERTY   HELD    IN   TRUST   OR  JOINTLY  801 

(8)  Money  deposited  by  wife  in  trust  for  her  husband,  she  re- 
taining possession  of  bank  book,  is  taxable  upon  her  death 

IN  MATTER  OF  ANNA  QUINN,  N.  Y.  Law  Journal,  Novem- 
ber 25,  1911,  Surrogate  Fowler  held:  "This  appeal  is  taken  by 
the  administrator  from  an  order  assessing  a  tax  upon  the  estate 
of  decedent.  At  the  time  of  decedent's  death  she  had  in  her 
possession  two  bonds  and  mortgages  which  were  executed  by 
the  mortgagors  to  James  and  Anna  Quinn,  as~  mortgagees. 
James  Quinn  was  the  husband  of  decedent.  She  had  also  cer- 
tain savings  bank  books  which  bore  on  their  respective  title 
pages  the  following:  'Anna  Quinn,  for  her  husband,  James,' 
'Anna  Quinn,  in  trust  for  James  Quinn,'  and  'Anna  Quinn,  in 
trust  for  James  Quinn,  her  husband.'  Besides  these  the  de- 
cedent had  certain  bank  books  which  contained  a  record  of  de- 
posits made  by  her  in  her  own  name  and  for  her  own  account. 

"The  appraiser  included  in  the  taxable  assets  of  decedent's 
estate  one-half  of  the  value  of  the  bonds  and  mortgages  of  which 
the  decedent  and  her  husband  were  the  mortgagees.  He  also 
included  the  amount  of  money  which  was  deposited  hi  the 
different  savings  banks  in  the  name  of  the  decedent  individually, 
as  well  as  the  amounts  in  the  various  banks  in  the  name  of  de- 
cedent in  trust  for  her  husband.  THE  ADMINISTRATOR  CONTENDS 
that  the  decedent  and  her  husband  had  an  estate  by  the  en- 
tirety in  the  bonds  and  mortgages,  and  that  therefore  they 
passed  to  the  survivor.  He  also  contends  that  the  deposits  in 
the  savings  banks  in  the  name  of  Anna  Quinn,  individually, 
were  made  by  her  as  agent  of  her  husband;  that  the  money 
was  his  property  and  that  it  should  not  be  included  as  part  of 
decedent's  estate.  He  also  contends  that  the  deposits  hi  sav- 
ings banks  which  were  made  by  the  decedent  in  trust  for  her 
husband  consisted  of  moneys  belonging  to  her  husband,  and 
that  the  appraiser  erred  in  including  them  as  part  of  the  assets 
of  decedent's  estate.  The  decedent  was  survived  by  her  hus- 
band. He  died  before  proceedings  were  brought  to  determine 
the  value  of  the  taxable  assets  of  decedent's  estate,  and  it  was 
therefore  impossible  to  obtain  that  direct  evidence  as  to  the 
ownership  of  the  funds  invested  in  the  bonds  and  mortgages, 
as  well  as  of  the  money  deposited  in  the  savings  banks  in  the 
name  of  the  decedent  in  trust  for  her  husband,  which  is  so 
necessary  to  a  proper  adjudication  of  the  question  in  dispute. 
The  testimony  taken  before  the  appraiser  shows  that  decedent's 
husband  was  illiterate  and  unable  to  sign  his  name;  that  he  and 
51 


802  PROPERTY    HELD    IN    TRUST   OR   JOINTLY1 

his  wife  were  very  poor  before  he  started  in  business  as  a  con- 
tractor; that  his  wife  took  an  active  interest  in  the  conduct 
of  the  business,  made  up  his  accounts  and  did  all  his  bookkeep- 
ing. 

"The  deposit  of  money  in  the  different  savings  banks  in  the 
name  of  the  decedent  raises  a  presumption  that  the  money  so 
deposited  belonged  to  her,  and  this  presumption  is  not  rebutted 
or  overcome  by  the  testimony  taken  before  the  appraiser. 
While  the  decedent  was  not  entitled  as  a  matter  of  law  to  any 
compensation  for  services  rendered  by  her  to  her  husband  in 
the  conduct  of  his  business  (Matter  of  Callister,  153  N.  Y. 
294),  it  is  not  at  all  improbable  that  he,  in  consideration  of  the 
active  interest  which  she  took  in  the  management  of  his  business 
and  the  material  assistance  which  she  rendered  him,  gave  her 
from  time  to  time  a  part  of  the  profits  accruing  from  the 
successful  enterprises  in  which  he  was  engaged,  and  that  she  de- 
posited such  money  in  her  own  name  in  the  savings  bank.  How- 
ever she  may  have  obtained  the  money,  the  fact  that  she  de- 
posited it  in  the  various  savings  banks  in  her  own  name  would 
indicate  that  she  was  the  owner  of  it,  and  the  appraiser  was 
therefore  correct  in  including  in  the  taxable  assets  of  decedent's 
estate  all  the  money  deposited  in  savings  banks  in  her  name. 
As  she  had  individual  property  or  money  which  she  could  de- 
posit in  her  own  name  in  a  savings  bank,  it  follows  that  she 
could  also  invest  this  money  in  any  form  of  investment,  such 
as  bonds  and  mortgages,  with  her  husband. 

(9)  Bond  and  mortgage  executed  to  a  husband  and  wife  as 
mortgagees 

"The  absence  of  any  evidence  as  to  the  ownership  of  the 
money  invested  in  the  purchase  of  the  bonds  and  mortgages, 
and  the  further  absence  of  any  evidence  as  to  the  custody  of  the 
instruments  themselves  during  the  life  of  the  decedent,  leaves 
the  determination  of  the  question  of  decedent's  interest  hi  the 
bonds  and  mortgages  to  the  presumptions  which  may  reasonably 
be  indulged  in  as  to  the  intent  of  the  parties  when  purchasing 
the  bonds  and  mortgages.  Assuming  from  the  savings  bank 
deposits  made  by  the  decedent  in  her  individual  name  that  she 
was  possessed  of  considerable  money,  the  court  will,  in  the  ab- 
sence of  proof  that  the  money  invested  in  the  bonds  and  mort- 
gages was  owned  exclusively  by  the  husband,  presume  that  the 
investment  was  made  with  money  contributed  by  the  decedent 


PROPERTY    HELD    IN    TRUST    OR   JOINTLY  803 

and  her  husband,  and  that  they  were  tenants  in  common  of  the 
securities  purchased  with  the  funds  so  contributed  by  each  of 
them.  Wethrow  v.  Lord,  41  App.  Div.  413;  Matter  of  Al- 
brecht,  136  N.  Y.  91;  Matter  of  Baum,  121  App.  Div.  496. 

"There  is  no  evidence  as  to  the  ownership  of  the  money  de- 
posited in  the  savings  banks  in  the  name  of  decedent  in  trust 
for  her  husband,  and  in  the  absence  of  such  evidence  the  pre- 
sumption is  that  the  money  belonged  to  her.  It  appears,  how- 
ever, that  the  bank  books  were  kept  by  the  decedent,  and  that 
possession  of  them  was  not  surrendered  to  her  husband  during 
her  life.  This  constituted  a  tentative  trust  which  remained 
revocable  during  the  life  of  the  decedent  and  became  absolute 
only  upon  her  death.  Matter  of  Totten,  179  N-  Y.  112.  The 
money  therefore  passed  to  her  husband  upon  the  death  of  the 
decedent  as  a  gift  intended  to  take  effect  at  or  after  death  under 
subdivision  4,  section  220,  of  the  Transfer  Tax  Law.  Order 
fixing  tax  affirmed." 

(10)  Mortgages  assigned  to  decedent  and  her  daughter  with 
right  of  survivorship 

IN  MATTER  OF  SPRING,  75  Misc.  586  (1912),  the  appraiser 
held  that  a  half  interest  in  certain  mortgages  was  subject  to 
the  transfer  tax.  Surrogate  Ketcham  in  sustaining  the  ap- 
praiser said:  "These  mortgages  were  assigned  to  the  decedent 
and  her  daughter,  by  instruments  which  contained  provisions, 
in  some  instances,  that  the  survivor  of  the  two  assignees  should 
become  the  absolute  owner  of  the  bond  and  mortgage  and  that 
neither  should  have  the  power  to  affect  the  rights  of  the  last 
survivor,  and,  in  other  instances,  that  the  securities  assigned 
would  be  held  by  the  parties  of  the  second  part  and  the  survivor 
of  them. 

"The  executrix  claims  that  the  transfer  to  these  two  persons 
jointly,  with  right  of  survivorship,  vested  the  tiMe  in  the  sur- 
vivor and  that,  on  the  death  of  one,  the  title  of  the  survivor 
related  back  to  the  date  of  the  original  transfer. 

"It  is  of  no  importance  to  consider  whether  or  not  these 
transfers  bestowed  title  or  ownership  at  the  time  when  the 
mortgages  were  assigned. 

"If  the  claim  of  the  executrix  in  this  respect  were  conceded 
the  transfers  would,  nevertheless,  be  taxable  under  the  ex- 
pressions of  the  statute. 

"  It  is  apparent  that  the  decedent,  under  the  several  assign- 


804  PROPERTY    HELD   IN   TRUST   OR  JOINTLY 

ments,  received  a  right,  at  least  equal  to  that  of  her  associate 
assignee,  to  collect  interest  upon  the  mortgages.  While  it  does 
not  affirmatively  appear,  the  presumption  must  be  that  each 
of  the  assignees  reserved  the  right  to  interest  on  one-half  of  the 
investment.  Hence,  as  to  the  one-half  of  the  securities  in- 
volved in  this  discussion,  the  decedent  held  an  interest  which 
can  be  likened  to  an  intermediate  estate  for  her  own  life;  and 
the  daughter  (the  other  assignee)  took  a  remainder  which, 
under  the  language  of  the  Tax  Law,  was  a  transfer  'intended 
to  take  effect  in  possession  or  enjoyment'  upon  the  death  of 
the  decedent.  Matter  of  Green,  153  N.  Y.  223;  Matter  of 
Brandreth,  169  id.  437;  Matter  of  Cornell,  170  id.  423;  Matter 
of  Keeney,  194  id.  281." 

(11)  In   absence   of  proof    there   is   presumption   of   equal 
ownership 

IN  MATTER  or  PITOU,  79  Misc.  384  (1913),  Surrogate  Ket- 
cham  discusses  the  question,  and  cites  with  approval  Matter  of 
Kline,  65  Misc.  446. 

(12)  Joint  ownership  of  personal  property 

IN  MATTER  OF  SARAH  HEISER,  N.  Y.  Law  Journal,  July  19, 
1913,  Surrogate  Fowler  held:  "This  appeal  is  taken  by  the 
State  Comptroller  from  an  order  assessing  a  tax  upon  the  estate 
of  the  decedent.  The  appraiser  reported  that  real  estate  of  the 
value  of  $45,800  and  personal  property  consisting  of  bonds  and 
mortgages  of  the  value  of  $156,166.69  were  held  by  the  de- 
cedent and  her  sister,  Maria  S.  Heiser,  as  joint  tenants,  and 
that  the  decedent's  interest  in  the  property  was  exempt  from 
taxation. 

"The  State  Comptroller  contends  that  the  decedent's  in- 
terest in  this  property  passed  to  the  executrix,  who  was  her 
joint  tenant,  as  a  gift  intended  to  take  effect  at  or  after  death 
and  that  it  is  therefore  subject  to  a  transfer  tax. 

"  The  decedent  and  her  sister,  Maria  S.  Heiser,  were  originally 
tenants  in  common  of  the  real  estate.  They  conveyed  it  to  a 
third  person,  and  in  the  deed  by  which  it  was  reconveyed  to 
them  it  was  expressly  declared  that  the  conveyance  was  made 
to  them  as  joint  tenants  and  not  as  tenants  in  common.  The 
bonds  and  mortgages  were  originally  held  by  the  decedent  ;»n<l 
her  sister,  Maria  S.  Heiser,  as  tenants  in  common,  but  by  sepa- 
rate instruments  they  were  assigned  to  a  third  person,  and  then 


PROPERTY   HELD    IN   TRUST   OR  JOINTLY  805 

assigned  and  transferred  by  such  third  person  to  the  decedent 
and  her  sister  as  joint  tenants. 

"  JOINT  OWNERSHIP  OF  PERSONAL  PROPERTY  is  recognized 
by  the  law  of  this  State.  Matter  of  Kaupper,  141  App.  Div. 
54;  Kelly  v.  Beers,  194  N.  Y.  49.  The  right  of  the  survivor  to 
the  entire  property  held  by  them  as  joint  tenants  is  the  distin- 
guishing characteristic  of  this  species  of  ownership,  and  if  all 
the  property  held  jointly  belonged  originally  to  one  of  the  par- 
ties and  the  rights  of  a  joint  owner  were  conferred  by  the  orig- 
inal owner  upon  his  joint  tenant  as  a  gift  intended  to  take 
effect  at  or  after  death,  the  value  of  the  interest  passing  to  the 
survivor  would  be  subject  to  the  provisions  of  the  Transfer 
Tax  Law. 

"But  if  the  joint  tenants  have  contributed  out  of  their  in- 
dividual funds  to  the  purchase  of  the  property  held  by  them 
as  joint  tenants,  the  right  of  the  survivor  to  take  the  entire 
property  is  not  a  gift  from  the  other  joint  tenant,  but  a  right 
derived  from  the  contract  entered  into  between  them  at  the 
time  the  instrument  creating  the  joint  tenancy  was  executed. 
A  contract  by  which  each  of  two  persons  holding  property  as 
tenants  in  common  transfers  his  interest  therein  to  the  other 
if  he  survives  is  supported  by  a  good  consideration  and  is  not 
subject  to  revocation.  Augsbury  v.  Shurtleff,  180  N.  Y.,  p.  147. 

"When  the  decedent  and  her  sister  as  tenants  in  common  of 
the  bonds  and  mortgages  mentioned  in  the  appraiser's  report 
agreed  with  each  other  to  transform  the  nature  of  their  tenancy 
in  the  property  from  tenants  in  common  to  joint  tenants,  each 
of  them  surrendered  rights  over  the  property  in  consideration 
of  the  right  of  survivorship  conferred  by  the  instrument  creat- 
ing the  joint  tenancy.  Instead  of  each  owning  an  undivided 
one-half  of  the  property,  subject  to  sale,  assignment  or  to  trans- 
fer by  will,  each  took  under  the  instrument  creating  the  joint 
tenancy  an  undivided  half  which  was  not  subject  to  sale,  as- 
signment or  to  transfer  by  will.  Each,  therefore,  parted  with  a 
valuable  consideration  for  the  right  to  take  the  entire  property 
as  survivor. 

"  IN  THE  TESTIMONY  GIVEN  BEFORE  THE  APPRAISER  by  Maria 

S.  Heiser,  the  surviving  joint  tenant,  she  testified  that  the 
execution  of  the  instrument,  by  virtue  of  which  they  held  the 
property  as  joint  tenants,  was  'for  the  purpose  of  facilitating 
the  administration  of  the  estate  when  one  should  die,  so  that 
the  survivor  would  take  what  was  left  as  a  gift.'  As  there  is 


806  PROPERTY   HELD   IN   TRUST  OR  JOINTLY 

no  ambiguity  in  the  instrument  creating  the  joint  tenancy 
this  testimony  as  to  its  effect  was  incompetent. 

"  IN  THE  ABSENCE  OF  AN  ALLEGATION  OF  FRAUD,  it  is  imma- 
terial what  purpose  the  parties  to  the  instrument  may  have 
intended  to  accomplish  by  its  execution,  because  the  instru- 
ment itself  expressly  declares  that  the  assignment  of  the  bonds 
and  mortgages  was  made  to  them  as  joint  tenants.  The  right 
of  the  survivor  to  take  the  entire  property  may  accord  with  the 
witness'  conception  of  a  gift,  but  it  was  not  a  gift  within  the 
legal  signification  of  that  word.  It  was  not  a  gift  inter  vivos  be- 
cause there  was  no  delivery  by  the  donor  of  the  thing  constitut- 
ing the  gift,  coupled  with  an  intention  to  transfer  the  immediate 
right  of  ownership  in  and  dominion  over  the  property  to  the 
donee.  Matter  of  Bolin,  136  N.  Y.  177;  Beaver  v.  Beaver,  117 
N.  Y.  421.  It  was  not  a  gift  causa  mortis,  because  real  property 
cannot  be  the  subject  of  such  a  gift,  and  it  does  not  appear 
that  either  of  the  parties  to  the  instrument  creating  the  joint 
tenancy  was  in  extremis  or  dangerously  ill  or  in  immediate 
peril  of  losing  her  life.  Neither  was  it  a  gift  made  hi  contem- 
plation of  death  within  the  meaning  of  that  phrase  in  the  trans- 
fer tax  statute,  because  it  was  made  for  a  valuable  consideration 
and  was  contingent  in  each  case  upon  either  one  of  the  joint 
tenants  surviving  the  other. 

"  It  was  also  suggested  before  the  transfer  tax  appraiser  that 
the  joint  tenancy  was  created  for  the  purpose  of  avoiding  taxa- 
tion under  the  Transfer  Tax  Law.  IT  is  IMMATERIAL  FOR  WHAT 
PURPOSE  THE  JOINT  TENANCY  WAS  CREATED,  as  property  may 
be  transferred  by  gift  inter  vivos  or  for  a  valuable  consideration 
and  not  be  subject  to  the  provisions  of  the  Transfer  Tax  Law. 
It  is  only  when  it  is  transferred  in  the  particular  manner  pre- 
scribed by  the  transfer  tax  statute  that  it  is  subject  to  the  tax. 
A  transfer  effected  in  any  other  form,  irrespective  of  the  motive 
which  prompted  it,  is  not  subject  to  the  tax. 

"As  the  TRANSFER  TAX  STATUTE  DOES  NOT  IMPOSE  A  TAX 
UPON  A  TRANSFER  OF  PROPERTY  WHICH  IS  MADE  FOR  A  VALUABLE 

CONSIDERATION,  and  as  it  appears  that  the  transfer  of  the  in- 
terest of  the  decedent  in  the  bonds  and  mortgages  as  well  as 
the  real  estate  above  mentioned  was  for  a  valuable  considera- 
tion, the  interest  accruing  to  the  survivor  upon  the  death  of 
the  decedent  is  not  subject  to  the  provisions  of  the  Transfer 
Tax  Law.  The  order  fixing  tax  will  therefore  be  af- 
firmed." 


QUESTIONS   OF   FACT  807 

Vide  Matter  of  Von  Bernuth,  supra,  page  791,  and  cases 
therein  cited. 

PRO  RATA 

As  to  pro  rata  distribution  in  non-resident  estates  under 
subdivision  3  of  §  220  vide  supra,  page  150. 

For  deductions  of  debts  and  expenses  in  non-resident  estate 
vide  supra,  page  157. 

The  exemption  to  beneficiary  under  §  221a  is  prorated  where 
the  beneficiary  is  entitled  to  both  a  legacy  presently  payable 
and  a  remainder  interest  in  a  trust  fund.  Matter  of  Title 
Guarantee  &  Trust  Co.,  81  Misc.  106. 

PUBLIC  ADMINISTRATOR 

Where  public  administrator  has  obtained  letters  of  adminis- 
tration and  there  is  uncertainty  as  to  whether  the  deceased 
left  next  of  kin,  the  tax  is  imposed  at  highest  rate.  Matter 
of  Lind,  132  App.  Div.  321,  affirmed,  without  opinion,  196 
N.  Y.  570,  supra,  page  369. 

PUNISHMENT  FOR  CONTEMPT 

Vide  Contempt. 

QUARANTINE,  WIDOW'S 

Vide  Matter  of  Stiles,  64  Misc.  558-662,  and  §  204,  Real  Prop- 
erty Law,  quoted  sub  Wife  supra,  page  888. 

QUASI  JUDICIAL  OFFICER 

"  The  powers  and  duties  of  the  tax  appraisers  are  of  a  quasi 
judicial  character."  People  ex  rel.  McKnight  v.  Glynn,  56 
Misc.  35-39;  Matter  of  Ullmann,  137  N.  Y.  403-407,  and  cases 
cited  sub  Appraiser. 

QUESTIONS  OF  FACT 

Appeal  to  Court  of  Appeals  limited  to  a  review  of  questions 
of  law,  vide  Appeal. 

Valuation  of  stock  is  a  question  of  fact.  Matter  of  Thayer, 
193  N.  Y.  430-433. 


808  RATES   OF   TAX 

RATES  OF  TAX 

(1)  Rates  under  present  statute.         (3)  Transfers    under    subdivision    4 

(2)  Rates  under  previous  statutes.  of  §  220. 

(4)  Remainders. 

(1)  Rates  under  present  statute 

The  rates  of  tax  under  the  present  statute  have  remained  un- 
changed since  the  amendment  by  LAWS  OF  1911,  CHAP.  732, 
supra,  page  526,  in  effect  July  21,  1911.  For  tables  and  discus- 
sion vide  page  43. 

As  to  taxation  at  HIGHEST  RATE  under  sixth  paragraph  of 
§  230  vide  footnote  to  Matter  of  Brez,  supra,  page  273,  and  cases 
cited  sub  REMAINDERS;  etiam  Matter  of  Eaton,  55  Misc.  472. 

The  decisions  under  the  Laws  of  1911,  chap.  732  include 
Matter  of  Schwarz,  209  N.  Y.  mem.,  supra,  page  399,  overruling 
Matter  of  Elletson,  75  Misc.  582;  Matter  of  Kip,  N.  Y.  Law 
Journal,  March  28,  1912,  opinion  quoted  supra,  page  400; 
Matter  of  Eaton,  79  Misc.  69;  Matter  of  Title  Guarantee  & 
Trust  Co.,  81  Misc.  106-112. 

(2)  Rates  under  previous  statutes 

The  amount  of  the  tax  is  controlled  by  the  statute  in  existence 
at  the  time  of  the  transfer.  Matter  of  Abraham,  151  App.  Div. 
441-442  and  cases  cited  supra,  page  51. 

LAWS  1910,  CHAP.  706:  vide  supra,  page  43  and  page  520; 
Matter  of  Jourdan,  206  N.  Y.  653,  supra,  page  386;  Matter  of 
Scott,  208  N."  Y.  602,  supra,  page  396;  Matter  of  Hogg,  156 
App.  Div.  301. 

IN  MATTER  OF  ANNA  C.  HOLT,  N.  Y.  Law  Journal,  March  16, 
1912,  Surrogate  Fowler  held:  "Chapter  732  of  the  Laws  of  1911, 
which  went  into  effect  July  21,  1911,  is  not  retroactive  (Matter 
of  Niles,  N.  Y.  Law  Jour.,  Jan.  5,  1912).  As  the  decedent  died 
in  June,  1911,  the  taxation  of  the  transfer  of  property  effected 
by  her  will  is  governed  by  chapter  706  of  the  Laws  of  1910 
(Matter  of  Sloan,  154  N.  Y.  109) i  This  law  provided  that  $500 
of  the  amount  transferred  to  an  adult  child  of  decedent  should 
be  exempt  from  taxation;  therefore  the  appraiser  was  correct 
in  deducting  this  sum  from  the  net  amount  of  each  legatee's 
share." 

Vide  Matter  of  Mason,  69  Misc.  280,  and  opinion  of  state 
comptroller,  January  27,  1913,  1  State  Department  Reports, 
559. 


RATES   OF  TAX  809 

THE  HOUR  OF  THE  DAY  upon  which  chapter  706  of  the  Laws 
af  1910  took  effect  was  involved  in  Matter  of  Lane,  157  App. 
Div.  694.  The  court  held,  page  697,  that  the  amendment  "did 
not  take  effect  until  after  the  death  of  the  testatrix,  which  hap- 
pened on  the  same  day  upon  which  the  statute  was  passed  and 
took  effect."  An  examination  of  the  printed  papers  on  appeal 
shows  at  folio  127  thereof  that  the  attorney  for  the  state  comp- 
troller and  the  attorneys  for  the  executor  entered  into  a  stipu- 
lation "for  the  purpose  of  this  proceeding"  to  the  effect  that 
chapter  706  of  the  Laws  of  1910  "  was  approved  by  the  Governor 
of  the  State  of  New  York,  between  the  hours  of  five  o'clock  and 
forty  minutes  and  six  o'clock  in  the  afternoon  of  the  llth  day 
of  July  1910." 

As  to  fractions  of  days  vide  Matter  of  Dreyfous,  18  N.  Y. 
Supp.  767;  Ottman  v.  Hoffman,  7  Misc.  714;  Town  of  Louisville 
v.  Portsmouth  Savings  Bank,  104  U.  S.  469;  Matter  of  Richard- 
son, 2  Story  571;  Burges  v.  Salmon,  97  U.  S.  381;  Taylor  v. 
Brown,  147  id.  640-645;  Croveno  v.  Atlantic  Avenue  R.  R. 
Co.,  150  N.  Y.  225-229. 

LAWS  1909,  CHAP.  62,  supra,  page  500. 

LAWS  1905,  CHAP.  368,  supra,  page  474. 

LAWS  1903,  CHAP.  41.  Matter  of  Fisher,  96  App.  Drv.  133; 
Matter  of  Hallock,  42  Misc.  473. 

LAWS  1897,  CHAP.  284,  supra,  page  450.  Matter  of  Seaver, 
63  App.  Div.  283. 

LAWS  1896,  CHAP.  908,  supra,  page  437.  Matter  of  Cor- 
bett,  171  N.  Y.  516,  supra,  page  264;  Matter  of  Garland,  88 
App.  Div.  380;  Matter  of  DeGraaf,  24  Misc.  147. 

LAWS  1892,  CHAP.  399,  supra,  page  424.  Matter  of  Hoffman, 
143  N.  Y.  327,  supra,  page  189;  Matter  of  Costello,  189  id.  288, 
supra,  page  344;  Matter  of  Hall,  88  Hun,  68;  Matter  of  Mc- 
Murray,  96  App.  Div.  128. 

LAWS  1887,  CHAP.  713,  supra,  page  413.  Matter  of  Sher- 
well,  125  N.  Y.  376,  supra,  page  168. 

LAWS  1885,  CHAP.  483,  supra,  page  404.  Matter  of  Cager, 
111  N.  Y.  344;  Matter  of  Howe,  112  N.  Y.  100. 

(3)  Transfers  under  subd.  4  of  §  220 

IN  MATTER  OF  WEBBER,  151  App.  Div.  539,  held,  that  where 
donor  made  and  delivered  a  trust  deed  by  which  she  reserved 
the  income  to  herself,  with  no  power  of  revocation,  that  upon 
her  death  the  property  was  taxable  at  the  rate  of  tax  under  the 


810  REAL   ESTATE 

law  in  effect  at  the  time  of  the  making  and  delivery  of  the  trust 
deed  and  not  the  rate  in  effect  at  the  date  of  her  death. 

IN  MATTER  OF  ATTERBURY,  N.  Y.  Law  Journal,  March  25, 
1913,  Surrogate  Cohalan  held  that  the  law  in  existence  at  the 
time  of  the  transfer  of  the  property  by  deed  of  trust  is  the  law 
which  governs  the  rate  of  tax  and  not  the  law  in  existence  at 
the  time  of  the  death  of  the  decedent.  Opinion  quoted  sub 
Trust  Deed,  post,  page  871. 

IN  MATTER  OF  LOEWI,  75  Misc.  57,  Surrogate  Fowler  said 
at  page  62:  "  *  *  *  It  is,  therefore,  unnecessary  in  this 
proceeding  to  determine  whether  the  decedent  constituted  his 
son,  Joseph  Loewi,  a  trustee  of  the  bonds  which  were  in  the  safe 
deposit  vault,  to  pay  the  income  to  him  during  his  life  and  upon 
his  death  to  distribute  the  corpus  among  his  children,  as,  whether 
the  property  passed  to  the  beneficiaries  by  virtue  of  such  a  gift 
intended  to  take  effect  at  or  after  decedent's  death,  or  whether 
it  passed  by  virtue  of  decedent's  will,  so  long  as  the  property 
did  not  pass  as  a  valid  gift  inter  vivos,  its  transfer  is  taxable  at 
its  full  value  at  the  date  of  decedent's  death.  Matter  of  Cornell, 
170  N.  Y.  423;  Matter  of  Green,  153  id.  223,  and  at  the  rate 
prescribed  by  the  statute  in  existence  at  the  date  of  decedent 
death.  Matter  of  Davis,  149  N.  Y.  539." 

Vide  MATTER  OF  AGNEW,  N.  Y.  Law  Journal,  December  13, 
1913,  supra,  page  53,  as  to  transfers  by  both  deed  of  trust  and 
by  will  to  same  beneficiaries. 

(4)  Remainders 

Where  tax  on  remainder  is  imposed  on  death  of  life  tenant, 
the  provisions  of  law  in  effect  at  death  of  testator  and  not  those 
in  effect  at  death  of  life  tenant  "must  control  as  to  the  subject 
and  rate  of  taxation."  Matter  of  Davis,  149  N.  Y.  539-545. 

For  discussion  of  tax  upon  remainders  vide,  post,  page  817. 

REAL  ESTATE 

Should  be  set  forth  in  Schedule  A1  supra,  page  97. 

APPRAISAL  by  expert,  page  98. 

ASSESSED  VALUE  of  real  estate,  page  100. 

BLANKET  MORTGAGES,  page  659. 

CERTIFICATE  under  §  236,  page  97. 

CONTRACT  OF  SALE  of  foreign  real  estate,  page  97. 

DECEDENT  ESTATE  LAW,  §  122,  page  113. 


REAL  ESTATE  811 

DEVOLUTION  of  title,  page  102. 

DOWER,  pages  102  and  671. 

FOREIGN  REAL  ESTATE  not  taxable,  page  97. 

JOINT  TENANCY,  page  788. 

MORTGAGES  on  decedent's  real  estate  should  be  set  forth  in 
Schedule  A1,  page  101.  Mortgages  held  by  decedent  in  Sched- 
ule A3,  page  109. 

RENT  reserved  to  deceased  and  accrued  and  unpaid  at  time 
of  his  death  should  be  set  forth  in  Schedule  A1,  page  98.  Rent 
on  unexpired  lease,  vide  Schedule  B3,  page  132. 

TAXES,  page  101. 

Vide  Leasehold;  Lien  of  Tax;  Tenants  by  the  Entirety. 

In  resident  estates  transfers  of  New  York  real  estate  to 
"collaterals  "  have  been  taxable  since  the  first  act  of  June  30, 
1885,  but  it  was  not  until  March  16,  1903,  that  transfers  of 
New  York  real  estate  to  "lineals"  were  made  taxable  by 
chap.  41,  Laws  1903.  Matter  of  Fisher,  96  App.  Div.  133-135. 
The  same  condition  exists  in  non-resident  estates  except  that 
non-resident  estates  were  not  subject  to  tax  until  June  25,  1887, 
chap.  713,  Laws  1887.  Matter  of  Enston,  113  N.  Y.  174; 
Matter  of  Romaine,  127  id.  80.  Quite  naturally  in  the  earlier 
cases  it  became  important  to  determine  whether  mortgages 
upon  real  property  should  be  deducted  from  the  personal  estate 
of  the  decedent.  It  was  held  not.  Vide  Matter  of  Livingston, 
1  App.  Div.  568,  and  other  cases  cited  under  Deductions, 
supra,  page  659;  etiam  Equitable  Conversion,  supra,  page  682. 
As  to  partnership  real  estate  vide  Partnership,  supra,  page 
752. 

"  In  practice  if  a  person  who  is  a  resident  of  this  state  dies 
seized  of  real  estate  the  appraiser  does  not  personally  appraise 
the  property,  but  accepts  the  evidence  of  some  one  qualified  to 
appraise  real  estate."  MATTER  OF  CORA  F.  BARNES,  N.  Y. 
Law  Journal,  December  17,  1913. 

An  administrator  paid  from  the  personal  estate  the  transfer 
tax  upon  the  real  estate  of  which  decedent  died  seized.  There 
were  unpaid  creditors  who  had  a  right  to  payment  of  their 
claims  from  the  personal  estate,  and  therefore  the  money 
paid  from  the  personal  estate  for  the  transfer  tax  upon  the  real 
property  rightfully  belonged  to  the  creditors.  When  the  real 
estate  came  to  be  sold  in  a  partition  suit  the  court  directed  that 
there  be  set  aside  from  the  proceeds  of  the  sale  a  sum  equal  to 
the  amount  of  the  transfer  tax  so  paid,  and  that  this  sum  be 


812  REAL   ESTATE 

paid  by  the  administrator  to  the  creditors.  Hughes  v.  Golden, 
44  Misc.  128. 

SALE  PRIOR  TO  APPRAISAL  overcomes  testimony  of  expert 
"where  the  evidence  is  that  diligent  efforts  had  been  made  to 
sell  the  property  and  the  price  at  which  it  was  sold  was  the  best 
that  could  be  obtained."  Matter  of  Arnold,  114  App.  Div. 
244-246. 

SURROGATE'S  DECREE  FIXING  VALUE  OF  REAL  PROPERTY 
WILL  NOT  BE  MODIFIED  because  the  real  property  sells  for  a 
less  sum.  "A  practice  which  would  permit  judgments  fixing 
values  to  be  opened  from  time  to  time  in  cases  where  a  subse- 
quent sale  of  the  appraised  property  tended  to  show  that  the 
figure  fixed  by  the  judgment  was  too  large  or  too  small,  would 
lead  to  intolerable  uncertainty  and  confusion."  Matter  of 
Lowry,  89  App.  Div.  226-229. 

In  Matter  of  Mary  R.  Meyer,  N.  Y.  Law  Journal,  January  28, 
1913,  affirmed,  209  N.  Y.  386,  supra,  page  397,  Surrogate 
Cohalan  held,  that  "The  value  of  decedent's  interest  in  real 
estate  having  been  fixed  by  the  transfer  tax  appraiser  in  accord- 
ance with  the  evidence  submitted  in  1909  by  the  executor  of 
the  estate,  the  fact  that  the  property  was  sold  in  1912  for  less 
than  the  amount  of  such  appraisal  does  not  justify  the  surrogate 
in  modifying  the  order  assessing  a  tax  upon  the  basis  of  the 
original  appraisal  (Matter  of  Lowry,  89  App.  Div.  226;  Matter 
of  Barnum,  129  App.  Div.  418)." 

In  NON-RESIDENT  estates  the  disposition  of  New  York  real 
estate  is  regulated  by  the  laws  of  this  state.  Decedent  Estate 
Law,  §  47,  supra,  page  547;  Matter  of  Turner,  82  Misc.  25-28. 

EXECUTOR  AUTHORIZED  TO  SELL  REAL  ESTATE  TO  PAY  TAX. 
In  reply  to  an  enquiry  of  the  surrogate  of  Chemung  County  the 
comptroller  gave  the  following  opinion,  dated  April  16,  1913, 
2  State  Department  Reports,  498:  "The  Tax  Law  provides  for 
the  appraisal  of  both  real  and  personal  property  in  the  one 
proceeding  and  the  amount  of  the  tax  is  to  be  fixed  and  deter- 
mined by  the  one  taxing  order  of  the  surrogate.  Therefore  it 
is  the  duty  of  the  executor  to  see  that  property  specifically 
bequeathed  or  devised  is  appraised,  as  well  as  the  general  assets 
of  the  estate. 

"  Section  224  of  the  Tax  Law  refers  particularly  to  the  lien  of 
the  tax  and  the  collection  thereof  by  executors,  administrators 
and  trustees.  A  part  of  this  section  reads  as  follows: 

"     *     *     *     '  If  such  legacy  or  property  be  not  in  money,  he 


REAL    PROPERTY    LAW  813 

(referring  to  the  executor,  administrator  or  trustee)  shall  collect 
the  tax  thereon  upon  the  appraised  value  thereof  from  the  person 
entitled  thereto.' 

"It  would  seem  from  this  provision  that  when  a  will  devises 
real  estate  direct  to  a  son  the  executor's  duty  to  the  state  is  to 
collect  the  tax  from  the  son.  It  is  true  the  statute  does  not 
prescribe  the  manner  in  which  the  executor  is  to  proceed  to 
collect  the  tax  where  the  property  transferred  is  not  in  cash 
and  the  legatee  or  devisee  refuses  to  pay  the  tax,  unless  such 
direction  may  possibly  be  contained  in  another  paragraph  of 
this  section  of  the  Tax  Law,  which  reads  as  follows: 

«*  *  *  'Every  executor,  administrator  or  trustee  shall 
have  full  power  to  sell  so  much  of  the  property  of  the  decedent 
as  will  enable  him  to  pay  such  tax  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of 
the  testator  or  intestate.' 

"This  provision  would  seem  broad  enough  to  authorize  the 
executor  to  institute  proceedings  to  sell  the  real  estate  upon 
which  the  tax  was  a  lien,  in  the  same  manner  as  he  would  to  pay 
the  debts  of  the  decedent  where  the  personal  property  of  the 
decedent  was  insufficient  for  that  purpose. 

"The  fact  that  the  statute  intended  the  executor  to  collect 
all  the  tax  as  assessed  upon  the  various  transfers  is  further 
evidenced  by  the  provision  in  section  236  of  the  Tax  Law, 
stating: 

c  *  *  *  .  tj-^t  no  executor,  administrator  or  trustee  shall 
be  entitled  to  a  final  accounting  of  an  estate  in  settlement  of 
which  a  tax  is  due  under  the  provisions  of  this  article  unless  he 
shall  produce  a  receipt  so  sealed  and  countersigned,  or  a  certified 
copy  thereof.' " 

REAL  ESTATE  CORPORATION 

Vide  Schedule  A4  at  page  117. 

REAL  PROPERTY  LAW 

Section  250  of  Real  Property  Law,  it  seems,  is  not,  so  far  as 
direction  to  pay  mortgages  out  of  personal  estate  is  concerned, 
to  be  read  with  Transfer  Tax  Law.  Matter  of  Berry,  23  Misc. 
230;  vide  etiam  cases  cited  Deductions,  page  659. 

Section  151  of  Real  Property  Law  applied  in  Matter  of  Lynn, 
34  Misc.  681. 

In  estate  where  widow  is  not  entitled  to  both  dower  and  the 


814  REAPPRAISAL 

provisions  made  for  her  benefit  in  the  will  it  is  error  for  the 
appraiser  to  allow  deduction  for  dower  unless  widow  has  elected 
to  take  her  dower  under  §  201  of  the  Real  Property  Law. 
Matter  of  Stuyvesant,  72  Misc.  295,  and  cases  cited  sub  Dower. 
Section  204  relating  to  widow's  quarantine,  vide  Wife,  supra, 
page  888. 

REAPPRAISAL 

"Within  two  years  after  the  entry  of  an  order  or  decree  of  a 
surrogate  determining  the  value  of  an  estate  and  assessing  the 
tax  thereon,  the  state  comptroller  may,  if  he  believes  that  such 
appraisal,  assessment  or  determination  has  been  fraudulently, 
collusively  or  erroneously  made,  make  application  to  a  justice 
of  the  supreme  court  of  the  judicial  district  embracing  the  surro- 
gate's court  in  which  the  order  or  decree  has  been  filed,  for  a 
reappraisal  thereof."  Section  232. 

NOTICE  is  not  required  to  be  given  upon  an  application  for 
order  of  reappraisal.  Matter  of  Elizabeth  H.  Smith,  40  App. 
Div.  480-482;  vide  same  estate  reported  in  71  App.  Div.  602. 
It  was  also  held  that  the  Supreme  Court  had  no  authority  to 
vacate  an  order  for  reappraisal  granted  under  §  232.  Matter 
of  Smith,  40  App.  Div.  480. 

Reappraisal  is  not  the  only  method  of  review;  appeal  may  be 
taken  under  §  2570  of  Code  of  Civil  Procedure.  Morgan  v. 
Warner,  45  App.  Div.  424-426,  affirmed,  on  opinion  below,  162 
N.  Y.  612,  supra,  page  237.  Vide  Vacating  Decree. 

Application  to  Supreme  Court  under  §  232  for  reappraisal 
denied  because  only  errors  of  fact  were  intended  to  be  embraced 
by  the  reappraisal  provisions  of  §  232,  and  the  application  for 
reappraisal  was  "based  upon  what  was  emphatically  an  error 
of  law."  Matter  of  Niven,  29  Misc.  550. 

Where  property  of  decedent  brought  to  the  attention  of 
appraiser,  and  he  has  held  that  it  was  not  subject  to  the  tax, 
surrogate  cannot  several  years  after  an  order  confirming  report 
of  appraiser  make  an  order  directing  an  appraisal  of  assets 
which  were  held  not  taxable  under  original  order.  Matter  of 
Crerar,  56  App.  Div.  479. 

Where  an  appraiser  is  appointed  to  appraise  property  not 
included  in  a  former  appraisal,  he  is  limited  to  the  newly  dis- 
covered property,  and  cannot  reappraise  the  estate  included 
in  former  report  and  order.  Matter  of  Rice,  56  App.  Div.  253. 

THE  REPORT  OF  APPRAISER  is  REMITTED,  quite  frequently, 


REFUND  815 

for  additional  information  or  reappraisal.  Vide  Matter  of 
Caroline  VV.  Astor,  137  App.  Div.  922,  opinion  of  Surrogate 
quoted  supra,  page  107. 

RECALCITRANT  WITNESS 

Vide  Contempt. 

RECEIPTS  FOR  TAX 

Receipts  issued  as  provided  by  the  last  sentence  of  §  222 
and  the  first  paragraph  of  §  236.  Vide  Payment  of  Tax. 

As  to  production  of  receipt  on  final  accounting  in  pursuance- 
of  the  provisions  of  the  second  sentence  of  §  236,  vide  Matter  of 
Meyer,  209  N.  Y.  386,  supra,  page  397. 

For  recent  discussion  as  to  who  is  the  proper  official  to  issue 
receipts  vide  People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74, 
affirmed,  without  opinion,  209  N.  Y.  mem. 

REDUCTION  OF  PENALTY 

Vide  Interest 

REFEREE 

Surrogate  may  appoint  a  referee  under  §  2546  of  Code  of 
Civil  Procedure.  Matter  of  Bishop,  111  App.  Div.  545-547, 
appeal  dismissed,  188  N.  Y.  635,  supra,  page  343;  Matter  of 
Cora  F.  Barnes,  N.  Y.  Law  Journal,  December  17,  1913. 

REFUND 

"!F  THE  REMAINDER  ULTIMATELY  VESTS  IN  PERSONS  TAX- 
ABLE AT  A  LOWER  RATE  or  a  person  or  corporation  exempt  from 
taxation  by  the  provisions  of  this  article,  the  state  comptroller 
or  the  county  treasurer  shall  refund  any  excess  of  tax  so  held 
by  him  to  the  executor  or  trustee  of  the  estate,  to  be  disposed  of 
by  said  executor  or  trustee  as  provided  by  the  decedent's  will." 
Second  paragraph  of  §  241.  Vide  opinion  of  state  comptroller 
cited  sub  Interest. 

UNDER  §  225  ERRONEOUSLY  PAID  TAX  will  be  refunded  if  the 
order  be  modified  or  reversed  within  the  time  specified  in  said 
section.  Vide  cases  cited  sub  Vacating  Decree.  It  is  not  nec- 
essary to  obtain  order  to  refund.  Matter  of  Cameron,  97  App. 
Div.  436-438,  affirmed,  without  opinion,  181  N.  Y.  560,  supra, 
page  305. 


816  REFUSAL 

Recovery  of  refund  under  §  225  barred  by  lapse  of  time. 
Matter  of  Hoople,  179  N.  Y.  308;  Matter  of  Buckingham,  106 
App.  Div.  13-17;  Matter  of  Von  Post,  35  Misc.  367. 

MANDAMUS  issued  compelling  state  comptroller  to  refund 
tax  collected  under  order  made  without  jurisdiction.  Matter 
of  Coogan,  27  Misc.  563,  affirmed,  without  opinion,  162  N.  Y. 
613. 

TEMPORARY  PAYMENT  to  state  comptroller  or  County  treas- 
urer (§  222)  "is  not  the  concern  of  appraiser  or  the  surrogate. 
It  is  deductible  from  the  amount  finally  found  due.  If  nothing 
be  due,  then  it  must  be  refunded."  Matter  of  Skinner,  106  App. 
Div.  217-218.  Vide  Payment  of  Tax. 

INTEREST  on  refund  under  §  241  is  paid.  Vide  Interest. 
Refund  under  §  225  does  not  carry  interest.  Prior  to  amend- 
ment of  §  225  by  Laws  1907,  chap.  323,  in  effect  May  9,  1907,  it 
was  held  that  a  refund  under  §  225  should  be  restored  with 
interest.  Matter  of  O'Berry,  179  N.  Y.  285-293. 

Vide  fourth  paragraph  of  §  230,  supra,  page  17. 

REFUSAL 

Refusal  to  accept  legacy  or  devise,  vide  Election. 

Refusal  to  furnish  information  at  hearing,  vide  Contempt. 

REGISTER 

Vide  last  sentence  of  §  236,  supra,  page  25,  and  last  sentence 
of  §  239,  supra,  page  27. 

REGISTRAR  OF  STOCK 

Vide  Transfer  of  Securities. 

REHEARING 

Surrogate  may  remit  report  to  appraiser.  Matter  of  Kelly, 
29  Misc.  169-170;  Matter  of  Caroline  W.  Astor,  137  App.  Div. 
922,  opinion  of  Surrogate  quoted  supra,  page  107.  Vide  etiam 
Appeal;  Reappraisal;  Vacating  Decree. 

RELATIONSHIP 

RELATIONSHIP  TO  DECEDENT  determines  amount  of  exemp- 
tion and  rates  of  tax;  supra,  page  43. 

RELATIVES  OF  THE  HALF  BLOOD  discussed  supra,  page  46. 
Decedent's  Estate  Law,  supra,  page  548. 


REMAINDERS  817 

RELEASE  OF  BEQUEST  OR  DEVISE 

Vide  Election. 

RELIGIOUS 

RELIGIOUS  CORPORATION  exempt  under  the  first  sentence  of 
§  221.    Vide  cases  cited  sub  Exemptions. 

Chap.  600,  Laws  of  1910,  in  effect  June  23,  1910,  added  to 
what  now  is  the  first  sentence  of  §  221  the  words,  "for  RELIGIOUS 
CEREMONIES,  observances  or  commemorative  services  of  or  for/ 
the  deceased  donor."  Before  this  amendment  it  was  held  in 
the  McAvoy  case,  112  App.  Div.  377  (1906),  that  a  legacy  for 
masses  to  pastor  of  a  church  was  not  exempt.  In  a  subsequent 
case,  Matter  of  Didion,  54  Misc.  201  (1907)  the  surrogate  held 
that  a  legacy  "directly  to  religious  bodies"  was  exempt,  "the 
provision  for  masses  being  merely  collateral  and  incidental." 

REMAINDERS 

(1)  Remainder  taxed  under  statute     (6)  Taxation  suspended  in  certain 

in  force  at  death  of  testator.  cases. 

(2)  Remainders     created     prior     to     (7)  Tax  payable  from  principal. 

statute.  (8)  Hardship  to  life  tenant. 

(3)  Contingent     or     defeasible     re-     (9)  Temporary  order  under  §  230. 

mainders  created   subsequent  ( 10)  When  temporary  order  should 
to  statute  and  prior  to  1899  not  be  entered, 

amendment.  (11)  Deposit   of    securities    under 

(4)  When  remainder  taxable  at  full  §  241. 

value.  (12)  1910  amendment  to  §  243. 

(5)  1899  amendment. 

(1)  Remainder  taxed  under  statute  in  force  at  death  of  testator 
It  is  the  statute  in  force  at  the  death  of  the  testator,  and  not 
the  statute  in  effect  at  the  death  of  the  life  tenant,  which  gov- 
erns the  taxation  of  the  remainder.  Matter  of  Roosevelt,  143 
N.  Y.  120-122,  supra,  page  188;  Matter  of  Davis,  149  id.  539, 
supra,  page  201;  Matter  of  Sloane,  154  id.  109-113,  supra, 
page  218;  Matter  of  Meyer,  83  App.  Div.  381 ;  Matter  of  Mason, 
120  App.  Div.  738,  supra,  page  345,  affirmed,  without  opinion 
in  189  N.  Y.  556,  sub  nom.  Matter  of  Naylor. 

"The  decedent  having  died  in  1896  the  taxation  of  his  estate 
was  governed  by  the  statute  in  existence  at  that  time.  Matter 
of  Davis,  149  N.  Y.  539.  The  statute  of  1897  authorizing  the 
taxation  of  remainders  at  their  full  undiminished  value  was  not 
retroactive.  Matter  of  Meyer,  83  App.  Div.  381.  The  State 
Superintendent  of  Insurance  having  ascertained  the  value  of 
52 


818  REMAINDERS 

the  remainder  interest  which  vested  upon  the  death  of  Florence 
R.  Wright  to  be  $3,753,  an  order  may  be  submitted  upon  notice 
assessing  the  tax  upon  this  amount."  Matter  of  Buckham, 
N.  Y.  Law  Journal,  January  10,  1912. 

As  to  remainder  passing  under  exercise  of  power  of  appoint- 
ment vide  cases  cited  sub  Power  of  Appointment,  supra, 
page  768. 

(2)  Remainders  created  prior  to  statute 

MATTER  OF  PELL,  171  N.  Y.  48,  supra,  page  261,  held  that 
a  remainder  vested  prior  to  the  statute  was  not  subject  to  the 
tax,  and  that  the  last  sentence  of  the  then  §  230,  added  by  the 
Laws  of  1899,  chap.  76,  supra,  page  457,  was  unconstitutional. 
Vide  etiam  Matter  of  O'Berry,  179  N.  Y.  285,  supra,  page  289; 
Matter  of  Haight,  152  App.  Div.  228;  Matter  of  Seamen,  147 
N.  Y.  69,  supra,  page  196;  Matter  of  Gibson,  157  N.  Y.  680, 
supra,  page  226;  Matter  of  Hitchins,  181  N.  Y.  553,  supra, 
page  304. 

CONTINGENT  remainders  created  prior  to  the  statute  were 
held  not  subject  to  the  tax  in  Matter  of  Smith,  150  App.  Div. 
805.  Vide  etiam  Matter  of  Lansing,  182  N.  Y.  238-248,  supra, 
page  308;  Matter  of  Craig,  97  App.  Div.  289-291,  supra, 
page  303,  affirmed,  on  opinion  below,  181  N.  Y.  551. 

As  to  subdivision  5  of  §  220  vide  Matter  of  Seamen,  147  N.  Y. 
69-77,  supra,  page  198;  Matter  of  Spaulding,  49  App.  Div. 
541-549,  affirmed,  without  opinion,  163  N.  Y.  607;  Matter 
of  Dows,  167  N.  Y.  227-233;  Matter  of  Craig,  97  App.  Div. 
289,  affirmed,  on  opinion  below,  181  N.  Y.  551;  Matter  of 
Abraham,  151  App.  Div.  441-443. 

As  to  POWER  OF  APPOINTMENT  vide  subdivision  6  of  §  220; 
Matter  of  Delano,  176  N.  Y.  486,  supra,  page  280. 

(3)  Contingent  or  defeasible  remainders  created  subsequent 
to  statute  and  prior  to  1899  amendment 

Such  remainders  are  taxable  when  they  vest  in  possession. 

IN  MATTER  OF  RICHARD  S.  ELY,  157  App.  Div.  658,  the  de- 
cedent died  a  resident  March  7,  1894.  An  appraiser  was  there- 
upon appointed  who  made  his  report  and  an  order  of  the  sur- 
rogate was  entered  April  29,  1895,  confirming  the  report. 

Section  3  of  chapter  399  of  the  Laws  of  1892,  supra,  page  426, 
which  was  the  statute  in  force  at  the  time  of  decedent's  death, 
provided  that  the  transfer  of  these  interests,  the  value  of  which 


REMAINDERS  819 

was  not  ascertainable  at  the  date  of  the  appraisal,  was  not  tax- 
able until  such  interests  vested  in  possession.  Therefore  the 
appraiser  in  the  original  proceeding  brought  to  assess  a  tax  upon 
the  estate  of  the  decedent  could  not  report  the  value  of  such 
interests  as  subject  to  taxation. 

The  state  comptroller  applied  in  March  1913  for  the  ap- 
pointment of  an  appraiser  to  appraise  the  value  of  the  remainder 
interests  which  had  not  been  taxed  in  the  1895  appraisal.  This 
application  was  opposed  by  the  estate  on  the  ground  that  no- 
where in  the  1895  report  of  the  appraiser  or  in  the  "order  con- 
firming the  same,  is  there  any  statement  or  intimation  direct 
or  indirect  that  the  taxation  of  any  part  of  the  decedent's  estate 
which  was  before  the  appraiser  for  appraisal  was  suspended." 
Folio  75  of  printed  papers  on  appeal. 

Surrogate  Fowler  in  granting  the  application  of  the  state 
comptroller  held  that  as  it  was  "clear  from  the  language  of  the 
will  that  such  values  were  not  ascertainable  at  the  time  of  the 
appraisal,  it  will  not  be  presumed,  in  the  absence  of  an  express 
finding,  that  the  appraiser  considered  that  such  values  were 
ascertainable  and  that  his  failure  to  report  them  as  subject  to 
taxation  is  equivalent  to  a  finding  that  they  were  exempt  from 
taxation." 

The  Appellate  Division  affirmed  the  surrogate. 

Vide  etiam  Matter  of  Irwin,  36  Misc.  277. 

INTEREST  should  be  charged  not  from  the  death  of  testator 
creating  estate  but  "only  from  the  time  of  the  death  of  the 
life  tenant."  Matter  of  Davis,  149  N.  Y.  539-549,  supra, 
page  202. 

PRIOR  TO  THE  1897  AMENDMENT  it  was  held  in  Matter  of 
Sloane,  154  N.  Y.  109,  supra,  page  218,  that  where  a  remainder 
falls  in  upon  determination  of  prior  estate  by  remarriage  the 
value  of  the  particular  estate  of  the  widow  during  term  of  her 
widowhood  should  be  deducted. 

(4)  When  remainder  taxable  at  full  value 

The  seventh  paragraph  of  §  230  provides:  "Estates  in  expect- 
ancy which  are  contingent  or  defeasible  and  in  which  proceed- 
ings for  the  determination  of  the  tax  have  not  been  taken  or 
where  the  taxation  thereof  has  been  held  in  abeyance,  shall  be 
appraised  at  their  FULL,  UNDIMINISHED  VALUE  when  the  persons 
entitled  thereto  shall  come  into  the  beneficial  enjoyment  or 
possession  thereof,  without  diminution  for  or  on  account  of 


820  REMAINDERS 

any  valuation  theretofore  made  of  the  particular  csLat  s  ,"  r 
purposes  of  taxation,  upon  which  said  estates  in  expectancy 
may  have  been  limited." 

The  wording  of  this  paragraph  of  §  230  has  remained  un- 
changed since  Laws  1901,  chap.  173.  A  similar  provision  first 
appeared  in  the  statute  by  the  amendment  of  Laws  of  1897, 
chap.  284,  it  being  inserted  as  the  third  sentence  of  the  then 
§  230,  supra,  page  453.  The  provision  was  dropped  from  the 
statute  at  the  time  of  the  amendment  of  §  230  by  the  Laws  of 
1899,  chap.  76,  supra,  page  456,  but  was  restored  by  said  1901 
amendment.  Matter  of  Hosack,  39  Misc.  130-132;  Matter  of 
Connoly,  38  id.  533. 

For  discussion  as  to  meaning  and  intendment  of  provision 
vide  Matter  of  Kennedy,  93  App.  Div.  27-30;  etiam  Matter 
of  Meyer,  83  id.  381;  Matter  of  Mason,  120  id.  738,  supra, 
page  346,  affirmed,  without  opinion,  in  189  N.  Y.  556,  sub 
nom.  Matter  of  Nay  lor. 

IN  MATTER  OF  AMOS  R.  ENO,  N.  Y.  Law  Journal,  April  24, 
1913,  Surrogate  Cohalan  held:  "Florence  C.  Eno  Graves  and 
Mary  P.  Eno,  two  of  the  legatees  mentioned  in  the  will  of  the 
decedent,  have  appealed  from  the  order  assessing  a  tax  upon  the 
transfer  of  their  interests  in  the  decedent's  estate.  THE  DECE- 
DENT DIED  ON  THE  21st  DAY  OF  FEBRUARY,  1898.  He  gave  to 

trustees  the  sum  of  $500,000  and  directed  that  they  pay  the 
income  therefrom  to  his  granddaughter,  Florence  C.  Eno  Graves, 
until  she  arrived  at  the  age  of  27  years,  when  she  was  to  receive 
the  principal.  The  will  contained  a  similar  provision  for  the 
benefit  of  his  granddaughter,  Mary  P.  Eno.  If,  however,  either 
of  them  died  before  reaching  the  age  of  25  the  principal  was  to 
be  paid  to  her  issue,  and  in  the  event  of  both  of  them  dying 
without  issue  the  principal  was  to  be  paid  to  the  issue  of  the 
testator. 

"  The  transfer  tax  appraiser  designated  to  appraise  the  estate 
of  Amos  R.  Eno  ascertained  the  value  of  the  respective  tem- 
porary life  estates  of  Florence  C.  Eno  Graves  and  Mary  P.  Eno 
until  they  arrived  at  the  age  of  25,  and  the  order  entered  upon 
his  report  assessed  a  tax  upon  the  value  of  this  interest.  WHEN 

THE  TWO  LIFE  TENANTS  ARRIVED  AT  THE  AGE  OF  25  the  State 

Comptroller  made  an  application  to  have  the  tax  assessed  upon 
the  $500,000  which  each  of  them  then  received  under  the  will 
of  the  decedent,  and  an  order  was  entered  to  this  effect.  From 
that  order  this  appeal  is  taken. 


REMAINDERS  821 

"  SECTION  230  OF  CHAPTER  284  OF  THE  LAWS  OF  1897  provides: 
'  Estates  in  expectancy  which  are  contingent  or  defeasible  shall 
be  appraised  at  their  full  undiminished  value  when  the  persons 
entitled  thereto  shall  come  into  the  beneficial  enjoyment  or 
possession  thereof,  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  pur- 
poses of  taxation.'  As  this  was  the  statute  in  force  at  the  time 
of  decedent's  death,  the  transfer  of  the  legacies  to  Florence  C. 
Eno  Graves  and  Mary  P.  Eno  is  governed  by  it.  The  legacy 
in  the  principal  sum  of  $500,000,  being  contingent  upon  the 
legatee  arriving  at  the  age  of  25,  was  defeasible  by  her  death 
before  that  time,  and  was  therefore  within  the  provision  of  the 
statute  providing  for  the  taxation  of  such  estates  at  their  FULL 
UNDIMINISHED  VALUE  when  they  vested  in  possession.  The 
value  of  her  temporary  life  estate  was  taxed  and  when  she  re- 
ceived the  principal  sum  of  $500,000  it  was  taxed.  . 

"The  language  of  the  statute  is  so  clear  and  unambiguous 
that  there  can  be  no  question  as  to  the  intent  of  the  Legislature. 
Its  manifest  intention  was  that  a  tax  should  be  assessed  upon 
the  transfer  of  the  value  of  the  life  interest,  and  a  subsequent 
tax  imposed  upon  the  transfer  of  the  corpus  of  the  trust  fund. 
This  was  the  procedure  adopted  in  the  taxation  of  the  interests 
of  the  legatees  who  have  taken  this  appeal.  The  amendment 
effected  by  chapter  76  of  the  Laws  of  1899,  which  eliminated 
the  provision  above  quoted,  was  not  retroactive  and  did  not 
affect  or  impair  any  rights  accrued  or  liability  incurred  prior 
to  the  time  when  such  amendment  took  effect  (sec.  93,  General 
Construction  Law;  Matter  of  Milner,  76  Hun,  328). 

"The  attorney  for  the  legatees  contends  that  the  Act  of  1897 
was  unconstitutional.  This  being  a  court  of  first  instance  it 
will  assume  the  constitutionality  of  the  act.  If,  however, 
authority  were  needed  to  show  that  the  Legislature  may  provide 
for  the  imposition  of  a  tax  upon  the  transfer  of  a  life  interest  and 
subsequently  upon  the  transfer  of  the  principal  when  it  vests 
in  possession,  it  would  be  supplied  by  the  following  cases: 
Campbell  v.  California  (200  U.  S.  87),  Beers  v.  Glynn  (211  U.  S. 
477)  and  Keeney  v.  New  York  (222  U.  S.  525).  Order  fixing 
tax  affirmed."  VIDE  ETIAM,  Matter  of  Naylor,  189  N.  Y. 
556,  supra,  page  345. 

(5)  1899  amendment 
The  earlier  cases  held  where  it  was  impossible  to  determine 


822  REMAINDERS 

what  interest,  if  any,  would  go  to  a  remainderman  that  the  time 
of  taxation  of  such  remainder  should  be  postponed  until  the 
death  of  the  life  tenant.  Matter  of  Curtis,  142 'N.  Y.  219, 
supra,  page  185,  and  Matter  of  Roosevelt,  143  N.  Y.  120,  supra, 
page  188,  are  leading  cases.  As  was  said  by  Justice  Finch  in 
Matter  of  Curtis,  supra,  there  should  not  be  a  tax  "upon  what 
is  in  form  but  a  theory  and  in  fact  only  an  illusion." 

Where,  however,  a  remainder  was  vested  and  indefeasible 
it  was  taxed  at  the  time  of  the  death  of  the  creator  of  the  re- 
mainder, the  taxation  not  being  postponed  until  the  remainder 
fell  into  possession  by  reason  of  the  termination  of  the  previous 
estate.  Matter  of  Dows,  167  N.  Y.  227-233  supra,  page  250, 
sustained  in  183  U.  S.  278,  sub  nom.  Orr  v.  Oilman;  Matter  of 
Runcie,  36  Misc.  607. 

This  continued  to  be  the  law  until  the  amendment  to  section 
230  by  chapter  76  of  the  Laws  of  1899,  supra,  page  456,  in  effect 
March  14,  1899.  Matter  of  Vanderbilc,  172  N.  Y.  69,  supra, 
page  268;  Matter  of  Brez,  id.  609,  supra,  page  271;  Matter  of 
Tracy,  179  N.  Y.  501,  supra,  page  292;  Matter  of  Guggenheim, 
189  N.  Y.  561,  supra,  page  347;  Matter  of  Burgess,  204  N.  Y. 
265-269,  supra,  page  382;  Matter  of  Huber,  86  App.  Div. 
458-461. 

These  cases  held  that  the  legislature  intended  to  and  did 
change  the  law  so  that  remainders,  even  though  contingent  and 
defeasible,  were  taxable  at  the  death  of  the  testator  creating 
the  remainder.  As  was  said  by  the  court  in  Matter  of  Vander- 
bilt,  supra,  "The  tax  is  not  required  to  be  paid  by  the  condi- 
tional transferee,  for,  by  the  provisions  of  the  statute,  it  is  to 
be  paid  'out  of  the  property  transferred.'  So  that  whoever 
may  ultimately  take  the  property  takes  that  which  remains 
after  the  payment  of  the  tax." 

It  was  also  held  that  the  tax  on  the  remainder  "shall  be  im- 
posed at  the  HIGHEST  RATE  for  any  possible  succession  that  may 
occur  in  any  contingency."  Matter  of  Brez,  172  N.  Y.  609-611, 
supra,  page  271 .  Vide  dissenting  opinion  in  the  Brez  case  written 
by  Justice  Edward  T.  Bartlett,  and  concurred  in  by  Justices 
O'Brien  and  Vann. 

Since  the  Vanderbilt  and  Brez  cases,  supra,  it  has  been  the 
practice  to  tax  remainders  upon  the  death  of  the  testator 
creating  the  remainders,  with  the  exception  of  the  instances 
hereinafter  noted.  Vide  post,  page  829  as  to  1910  amendment 
to  first  sentence  of  §  243. 


REMAINDERS  823 

(6)  Taxation  suspended  in  certain  cases 

IN  MATTER  OF  HOWE,  86  App.  Div.  286,  affirmed,  without 
opinion,  176  N.  Y.  570,  supra,  page  284,  it  was  held,  where  the 
testator  created  a  life  estate  and  gave  a  POWER  OF  APPOINTMENT 
over  the  remainder,  that  the  taxation  of  said  remainder  should 
be  postponed  until  the  death  of  the  life  tenant.  In  the  later 
case  of  MATTER  OF  BURGESS,  204  N.  Y.  265,  supra,  page  380, 
the  court  laid  down  the  rule  that  the  taxation  of  the  remainder 
should  not  be  suspended  unless  the  power  of  appointment  was 
an  absolute  one.  The  reasoning  in  the  Howe  case,  supra,  was 
that  the  said  1899  amendment  did  not  repeal  or  render  nugatory 
that  portion  of  section  220  now  embodied  in  subdivision  6  of 
the  present  section  220.  As  to  taxation  of  remainder  where 
there  is  a  gift  of  a  power  of  appointment  vide  cases  cited  sub 
Power  of  Appointment  supra,  page  768. 

It  was  also  held  that  there  was  another  exception  to  the 
Vanderbilt  and  Brez  rule  where  the  life  estate  created  had 
accompanying  it  a  POWER  TO  INVADE  the  principal.  This  was 
determined  in  MATTER  OF  BABCOCK,  37  Misc.  445,  affirmed, 
without  opinion,  81  App.  Div.  645.  The  state  comptroller 
did  not  appeal,  and  it  has  been  the  practice  not  to  tax  presently 
a  remainder  where  there  is  a  power  to  invade  the  principal. 
Matter  of  Granfield,  79  Misc.  374-381,  supra,  page  783. 

The  Babcock  decision  was  based  on  the  theory  that  the  1899 
amendment  did  not  repeal  or  limit  that  portion  of  the  statute 
which  now  forms  the  second  sentence  of  section  222. 

The  seventh  paragraph  of,  §  230  providing  that,  "estates  in 
expectancy  which  are  contingent  or  defeasible  and  in  which 
proceedings  for  the  determination  of  the  tax  have  not  been 
taken  or  where  the  taxation  thereof  has  been  held  in  abeyance, 
shall  be  appraised  at  their  full,  undiminished  value  when  the 
persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment 
thereof,"  is  not  intended  to  limit  the  rule  that  taxation  of  re- 
mainders, though  contingent,  are  taxable  forthwith.  Matter 
of  Kennedy,  93  App.  Div.  27.  Vide  etiam  supra,  page  830. 

(7)  Tax  payable  from  principal 

Prior  to  amendment  by  chap.  76,  Laws  of  1899,  in  effect 
March  14,  1899,  "some  of  the  courts  had  decided  that  the 
transfer  tax  on  life  estates  was  payable  out  of  income  and  no 
tax  could  be  imposed  on  contingent  remainders,"  but  after  the 
1899  amendment,  vide  sixth  paragraph  of  the  present  §  230, 


824  REMAINDERS 

transfer  taxes  imposed  upon  estates  for  life  and  in  remainder 
are  payable  out  of  the  corpus  and  not  out  of  the  income.  Mat- 
ter of  Tracy,  179  N.  Y.  501-508-510,  supra,  page  292;  Matter 
of  Hoyt,  44  Misc.  76;  Matter  of  Bushnell,  73  App.  Div.  325- 
328,  supra,  page  275,  affirmed,  without  opinion,  172  N.  Y.  649. 
In  an  estate  where  testator  died  in  1890  the  surrogate  held 
that  the  life  tenant  "was  not  liable  to  pay  the  tax  upon  the 
remainders,  but  that  the  same  should  be  borne  by  the  bene- 
ficiaries." Matter  of  McMahon,  28  Misc.  697. 

(8)  Hardship  to  life  tenant 

IN  MATTER  OF  BREZ,  172  N.  Y.  609  (1902),  supra,  page  271, 
was  pointed  out  and  deplored  "the  hardship  to  the  life  bene- 
ficiary which  is  involved  if  the  remaindermen  are  taxable  at 
5  per  cent,  while  the  life  interest  is  only  taxable  at  1  per  cent." 
Matter  of  Hoyt,  44  Misc.  76-78. 

This  "inequality  caused  by  the  statute"  was  in  part  remedied 
by  the  amendment  to  §§  230  and  241  by  the  Laws  of  1911, 
chap.  800,  in  effect  July  28,  1911. 

(9)  Temporary  order  under  §  230 

Said  chapter  800,  Laws  of  1911,  supra,  page  531,  amended 
the  sixth  paragraph  of  §  230  by  inserting  the  new  provision 
that  "the  surrogate  shall  enter  a  TEMPORARY  ORDER"  as 
therein  provided. 

IN  MATTER  OF  HENRY  W.  EVERETT,  New  York  County, 
the  state  comptroller  in  an  opinion,  dated  June  5,  1913,  3  State 
Department  Reports,  450,  said:  "The  department  is  of  the 
opinion  that  the  order  of  April  4,  1913,  is  not  in  proper  form  to 
enable  the  comptroller  to  comply  with  the  provisions  of  the 
amendment  to  section  241  of  the  Tax  Law.  *  *  *  To 
comply  with  this  provision  the  taxing  order  should  first  extend 
the  tax  on  the  remainders  as  they  would  be  taxable  if  they  had 
actually  vested  in  possession  on  the  day  of  the  appraisal,  and 
this  statement  should  be  followed  by  the  extension  of  the  tax 
at  the  highest  rate  on  which  there  is  any  possibility  of  the  re- 
mainders ultimately  vesting;  and  the  difference  between  the 
tax  at  the  highest  rate  and  the  other  tax  as  shown  to  be  due  in 
the  event  of  the  remainders  having  vested  at  the  date  of  the 
appraisal  v/ould  be  the  amount  the  comptroller  should  retain 
and  pay  the  income  thereon  to  the  executors  of  the  estate  until 
the  remainders  ultimately  vested. 


REMAINDERS  825 

"The  order  as  entered,  however,  will  apparently  protect  the 
rights  of  all  interested  persons,  as  it  contains  the  following  pro- 
vision : 

"'Said  report  and  this  order  are  made  on  the  distinct  under- 
standing and  agreement  by  and  between  the  parties  hereto 
that  in  the  event  of  the  death  of  any  of  the  parties  in  interest, 
so  that  under  the  provisions  of  the  will  this  estate  will  vest  dif- 
ferently than  as  provided  for  herein,  said  report  will  be  remitted 
for  reappraisal  in  accordance  therewith.' 

"This  provision  does  not,  however,  permit  me  to  hold  any 
part  of  the  tax  as  assessed  and  pay  the  income  therefrom  to 
the  executors." 

Vide  etiam  MATTER  OF  BILLINGSLEY,  1  State  Department 
Reports,  569,  opinion  quoted  sub  Interest,  supra,  page  725. 

(10)  When  temporary  order  should  not  be  entered 

The  state  comptroller  in  an  opinion,  dated  May  19,  1913, 
2  State  Department  Reports,  503,  states:  "In  the  appraisal 
of  estates  where  the  widow  is  given  a  life  estate  in  certain  prop- 
erty, with  power  to  use  a  part  or  all  of  the  corpus  of  the  fund  for 
her  support  and  maintenance,  with  remainder  to  the  decedent's 
son,  your  practice  in  appraising  the  value  of  the  interest  of  the 
widow  as  though  it  was  a  life  estate  only  and  holding  the  taxa- 
tion of  the  remainder  in  abeyance  until  the  death  of  the  life 
tenant,  is  correct,  and  I  do  not  believe  the  amendment  to  sec- 
tion 230  of  the  Tax  Law,  by  chapter  800  of  the  Laws  of  1911, 
providing  for  the  entry  of  a  '  temporary '  order  affects  the  prac- 
tice in  this  respect. 

"Chapter  800  of  the  Laws  of  1911  (in  effect  July  twenty- 
eighth  of  that  year),  amended  sections  230  and  241  of  the  Tax 
Law.  The  6th  paragraph  of  section  230  was  amended  in  refer- 
ence to  taxing  contingent  remainders,  by  providing  that, 

"'When  property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interest  or  estates  of  the  transferees  are  dependent 
upon  contingencies  or  conditions  whereby  they  may  be  wholly 
or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall 
be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would 
be  possible  under  the  provisions  of  this  article,  and  such  tax 
so  imposed  shall  be  due  and  payable  forthwith  by  the  executors 
or  trustees  out  of  the  property  transferred,  and  the  surrogate 
shall  enter  a  temporary  order  determining  the  amount  of  said  tax 


826  REMAINDERS 

in  accordance  with  this  provision;  *  *  *  and  the  executor  or 
trustee  of  each  estate,  or  the  legal  representative  having  charge  of 
the  trust  fund,  shall  immediately  upon  the  happening  of  said  con- 
tingencies or  conditions  apply  to  the  surrogate  of  the  proper  county, 
upon  a  verified  petition  setting  forth  all  the  facts,  and  giving  at 
least  ten  days'  notice  by  mail  to  all  interested  persons  or  corpora- 
tions, for  an  order  modifying  the  temporary  taxing  order  of  said 
surrogate  so  as  to  provide  for  the  final  assessment  and  determina- 
tion of  the  tax  in  accordance  with  the  ultimate  transfer  or  devolu- 
tion of  said  property.' 

"A  part,  of  the  amendment  to  section  241  by  chapter  800  of 
the  Laws  of  1911,  refers  particularly  to  the  payment  of  tax  on 
contingent  remainders,  as  follows: 

"'Whenever  the  tax  on  a  contingent  remainder  has  been 
determined  at  the  highest  rate  which  on  the  happening  of  any 
of  said  contingencies  or  conditions  would  be  possible  under  the 
provisions  of  this  article,  the  state  comptroller,  in  the  counties 
wherein  this  tax  is  payable  direct  to  him,  and  in  all  other  coun- 
ties the  treasurer  of  said  counties,  respectively,  when  such  tax 
is  paid  shall  retain  and  hold  to  the  credit  of  said  estate  so  much 
of  the  tax  assessed  upon  such  contingent  remainders  as  repre- 
sents the  difference  between  the  tax  at  the  highest  rate  and  the 
tax  upon  such  remainders  which  would  be  due  if  the  contin- 
gencies or  conditions  had  happened  at  the  date  of  the  appraisal 
of  said  estate,  and  the  state  comptroller  or  the  county  treasurer 
shall  deposit  the  amount  of  tax  so  retained  in  some  solvent  trust 
company  or  trust  companies  or  savings  banks  in  this  state,  to 
the  credit  of  such  estate,  paying  the  interest  thereon  when  col- 
lected by  him  to  the  executor  or  trustee  of  said  estate,  to  be 
applied  by  said  executor  or  trustee  as  provided  by  the  decedent's 
will.' 

"These  amendments  suggest  the  practice  that  a  temporary 
order  must  first  determine  the  tax  as  it  would  be  if  the  remain- 
ders had  vested  in  possession  and  enjoyment  on  the  date  of  the 
appraisal,  and  by  the  same  order  determine  the  tax  on  the  prop- 
erty as  it  might  ultimately  vest  upon  the  happening  of  the  con- 
tingencies expressed  in  the  will,  whereby  the  remainder  would 
vest  in  persons  taxable  at  the  highest  rate. 

"  It  is  therefore  apparent  that  the  entry  of  a  temporary  order 
was  only  to  apply  to  cases  where  the  remainders  were  con- 
tingent, as  such  orders  must  necessarily  be  of  a  temporary 
nature  until  the  ultimate  vesting  of  the  property. 


fcEMAINDERS  827 

"In  the  case  you  have  under  consideration  the  son  takes  a 
vested  remainder,  subject  to  the  widow's  life  estate  and  also 
subject  to  be  divested  to  the  extent  the  widow  may  avail  herself 
of  the  right  to  invade  the  property.  And  the  right  to  invade  the 
property  does  not  make  the  son's  estate  contingent  as  to  its 
vesting,  but  only  contingent  as  to  the  amount  he  may  ultimately 
receive." 

Vide  Matter  of  Babcock,  37  Misc.  445,  affirmed,  without 
opinion,  81  App.  Div.  645,  and  Matter  of  Granfield,  79  Misc. 
374,  opinion  quoted,  sub  Power  to  Invade  Principal,  supra, 
page  783. 

(11)  Deposit  of  securities  under  §  241 

The  last  two  paragraphs  of  §  241,  added  by  chap.  800  of  the 
Laws  of  1911,  provide,  inter  alia,  for  the  deposit  of  securities 
by  the  executors  or  trustees  of  an  estate  (supra,  page  532).  A 
ruling,  dated  February  10,  1913,  of  the  state  comptroller,  1 
State  Department  Reports,  566,  states:  "If  the  decedent  to 
whose  estate  you  refer  died  subsequent  to  July  28,  1911,  the 
date  when  the  amendment  to  section  241,  by  chapter  800  of  the 
Laws  of  1911,  went  into  effect,  and  the  tax  on  contingent  re- 
mainders has  been  assessed  as  the  highest  rate  which  on  the 
happening  of  any  of  said  contingencies  or  conditions  will  be 
possible,  the  representatives  of  the  estate  may  pay  a  sum  in  cash 
equal  to  the  amount  of  tax  which  would  be  due  if  the  remainders 
had  actually  vested  in  possession  and  enjoyment  at  the  date  of 
the  appraisal  of  the  estate,  and  may  deposit  with  the  comp- 
troller bonds  or  other  securities  approved  by  him  to  the  amount 
of  the  balance  of  tax  as  determined  contingently  by  the  tem- 
porary taxing  order,  the  income  therefrom  to  be  paid  by  the 
comptroller  to  the  executors  or  trustees  of  the  estate,  until  the 
termination  of  the  widow's  life  estate. 

"This  amendment  requires  the  comptroller  to  pay  into  the 
state  treasury  the  tax  which  would  be  due  if  the  remainder 
had  vested  at  the  time  of  the  appraisal  of  the  estate.  There- 
fore, a  sum  representing  this  part  of  the  tax  must  be  paid  in  cash 
or  by  check;  but  the  residue  of  the  tax  as  assessed  can  be  paid  by 
depositing  either  bonds  or  cash,  at  the  option  of  the  executors 
or  trustees. 

"As  to  your  second  inquiry,  the  department  is  of  the  opinion 
that  in  the  event  of  a  deposit  of  bonds  having  been  made  as 
aforesaid,  if  an  appeal  should  be  taken,  resulting  in  the  deter- 


828  REMAINDERS 

mination  that  the  taxation  of  the  remainders  contingently  was 
improper  or  that  the  temporary  taxing  order  for  any  other 
reason  was  irregular,  the  comptroller  would  be  justified,  as 
soon  as  a  modifying  order  had  been  entered,  in  immediately 
returning  the  excess  of  the  deposit  of  either  bonds  or  cash,  re- 
taining only  the  amount  necessary  to  enable  the  executors  or 
trustees  to  comply  with  the  provisions  of  the  taxing  order  as 
modified;  or  if  the  modified  order  found  no  tax  presently  due, 
the  whole  amount  so  deposited  would  be  returned  forth- 
with." 

IN  MATTER  OF  LEUFF,  1  State  Department  Reports,  567, 
the  comptroller  handed  down  an  opinion,  dated  February  11, 
1913,  as  follows: 

"  (1)  New  York  city  registered  bonds  will  be  accepted  by  the 
comptroller  to  an  amount  representing  a  sum  sufficient  to  pay 
the  difference  between  the  transfer  tax  assessed  at  the  highest 
rate  which,  on  the  happening  of  any  of  the  contingencies  or 
conditions,  will  be  possible,  and  the  tax  which  would  be  due  if 
the  remainders  had  actually  vested  in  possession  and  enjoyment 
at  the  date  of  the  appraisal  of  the  estate. 

"(2)  As  THE  REPRESENTATIVES  OF  BUT  FEW  ESTATES  HAVE 
AVAILED  THEMSELVES  OF  THE  PROVISIONS  OF  THIS  AMENDMENT, 
THE  DEPARTMENT  HAS  NOT  ISSUED  ANY  RULES  OR  REGULATIONS 

as  to  the  deposit  of  bonds  or  securities,  nor  has  it  been  deemed 
necessary  to  require  a  margin  over  the  par  or  market  value  of 
the  securities,  for  the  reason  that  the  amendment  by  section  241 
requires  the  executors  or  trustees  to  make  up  any  deficiency 
in  tax  if  it  appears  that  they  have  deposited  securities  of  less 
value  than  the  tax  ultimately  found  due. 

"(3)  If  after  the  entry  of  the  temporary  taxing  order  and 
the  deposit  of  cash  or  securities  in  pursuance  thereof,  litigation 
should  arise,  resulting  in  modifying  the  temporary  taxing  order 
so  as  to  reduce  the  tax,  the  department  would  be  justified  in 
immediately  returning  to  the  representatives  of  the  estate  so 
much  of  the  cash  or  securities,  or  both,  as  represents  the  excess 
payment  as  shown  by  the  amending  order,  retaining  only  the 
amount  necessary  to  enable  the  executors  or  trustees  to  comply 
with  the  provisions  of  the  taxing  order  as  modified. 

"IF  NO  TEMPORARY  TAXING  ORDER  HAS  BEEN  ENTERED  by 

the  surrogate  the  department  would  not  feel  justified  in  accept- 
ing bonds  or  other  securities  in  the  same  manner  as  cash  or 
checks  are  now  accepted  in  anticipation  of  tax,  hi  order  to  allow 


REMAINDERS  829 

discount  or  to  prevent  penalty  from  attaching  for  nonpayment 
within  eighteen  months  from  the  accrual  of  the  tax." 

(12)  1910  amendment  to  §  243 

IN  MATTER  OF  J.  EDWARD  SIMMONS,  N.  Y.  Law  Journal, 
June  14,  1912,  Surrogate  Fowler  held:  "As  section  230  of  the 
Tax  Law  was  not  changed  by  the  amendment  of  1910,  it  must 
be  presumed  that  the  Legislature  intended  that  the  provisions 
of  that  section  should  apply  to  the  assessment  of  tax  under  the 
new  rates.  Where,  therefore,  a  remainder  is  contingent,  but  is 
limited  to  beneficiaries  of  the  one  per  cent,  primary  rates,  it 
must  be  taxed  as  if  it  passed  to  a  single  individual  of  that  class; 
if  it  may  pass  to  beneficiaries  in  the  classification  of  the  five 
per  cent,  primary  rate,  it  must  be  assessed  as  if  it  passed  to  a 
single  individual  in  that  class. 

"The  remainder  after  the  life  estate  of  decedent's  widow 
should  be  taxed  as  follows:  Mabel  S.  Tilden,  daughter,  surviv- 
ing life  estate  in  the  sum  of  $250,000;  remainder  after  said  life 
estate  to  be  assessed  against  the  trustees  and  taxed  at  the  five 
per  cent.  rate.  All  the  rest  and  residue  of  the  remainder  should 
be  assessed  against  the  trustees  for  Joseph  F.  Simmons,  son, 
at  the  rate  of  one  per  cent.  The  order  submitted  upon  the 
appraiser's  report  may  contain  a  provision  that,  upon  the  vest- 
ing in  possession  of  any  of  the  remainders,  or  the  exercise  of 
any  of  the  powers  of  appointment  given  by  decedent's  will,  an 
application  may  be  made  to  modify  the  order  fixing  tax  in  ac- 
cordance with  the  actual  devolution  of  the  property."  Vide 
etiam  Matter  of  Hogg,  156  App.  Div.  301  (Second  Depart- 
ment), reversing  78  Misc.  703. 

The  surrogate  calls  attention  to  §  230,  but  the  same  observa- 
tion may  be  made  regarding  §  222.  The  legislature,  however, 
did  amend  the  first  sentence  of  section  243  to  read:  "The  words 
'estate'  and  'property,'  as  used  in  this  article,  shall  be  taken  to 
mean  the  property  or  interest  therein  passing  or  transferred  to 
individual  or  corporate  legatees,  devisees,  heirs,  next  of  kin, 
grantees,  donees  or  vendees,  and  not  as  the  property  or  interest 
therein  of  the  decedent,  grantor,  donor  or  vendor  and  shall  in- 
clude all  property  or  interest  therein,  whether  situated  within  or 
without  this  state."  This  1910  amendment  changed  the  prin- 
ciple of  the  law  as  it  had  existed  since  1892.  Matter  of  Hoffman, 
143  N.  Y.  327;  Matter  of  Corbett,  171  N.  Y.  516,  supra,  page 
264;  Matter  of  Costello,  189  N.  Y.  288,  supra,  page  344. 


830  REMISSION    OF    PENALTY 

The  question  naturally  arises  whether  with  the  introduction  of 
the  new  principle  of  individual  exemptions  and  graded  rates  and 
the  change  of  section  243  by  the  same  amendment,  chapter  706, 
Laws  of  1910,  supra,  page  524,  the  legislature  in  its  wisdom  did 
not  intend  that,  in  the  words  of  the  second  sentence  of  sec- 
tion 222,  "taxes  upon  the  transfer  of  any  estate,  property  or  in- 
terest therein  limited,  conditioned,  dependent  or  determinable 
upon  the  happening  of  any  contingency  or  future  event  by 
reason  of  which  the  fair  market  value  thereof  can  not  be  ascer- 
tained at  the  time  of  the  transfer  as  herein  provided,  shall  accrue 
and  become  due  and  payable  when  the  persons  or  corporations 
beneficially  entitled  thereto  shall  come  into  actual  possession  or 
enjoyment  thereof." 

As  the  question  is  of  such  practical  importance  it  is  to  be 
hoped  there  will  be  a  judicial  explanation  of  "the  intention  of 
the  legislature"  as  now  expressed  in  §  22 la,  the  second  sentence 
of  §  222,  the  sixth  paragraph  of  §  230,  the  seventh  paragraph  of 
§  230,  the  last  two  paragraphs  of  §  241,  and  the  first  sentence  of 
§243. 

REMISSION  OF  PENALTY 

Vide  Interest. 

REMITTING  REPORT 

Report  of  appraiser  may  be  remitted  by  surrogate.  Matter 
of  Kelly,  29  Misc.  169-170;  Matter  of  Caroline  W.  Astor,  137 
App.  Div.  922,  opinion  of  surrogate  quoted  supra,  page  107. 

RENT 

"Rent  reserved  to  the  deceased  which  had  accrued  at  the 
time  of  his  death"  is  an  asset  of  the  estate.  Subdivision  7  of 
§  2712  of  Code  of  Civil  Procedure;  Jay  v.  Kirkpatrick,  26  Misc. 
550.  As  to  apportionment  of  rents  vide  §  2720. 

RENUNCIATION 

Vide  Election. 

REORGANIZATION  CERTIFICATES 

In  RESIDENT  estate  are  subject  to  tax. 

In  NON-RESIDENT  are  not  subject  to  tax.  Prior  to  1911  amend- 
ment if  they  related  to  New  York  corporation  they  were  sub- 
ject to  tax.  If  to  a  foreign  corporation  they  were  not,  even 


RES    ADJUDICATA  831 

though  the  reorganization  certificates  were  issued  by  a  New 
York  trust  company.    Matter  of  Rhoads,  190  N.  Y.  525. 

REPEAL 

While  chap.  399,  Laws  of  1892,  repealed  the  original  act  of 
1885  without  any  saving  clause  in  the  repealing  act  itself,  still 
the  Transfer  Tax  Law  has  been  continuously  in  force  because  of 
the  Statutory  Construction  Law,  chap.  677,  Laws  1892,  §  32. 
Matter  of  Jones,  54  Misc.  202-205.  Vide  etiam  §  93  of  General 
Construction  Law. 

As  to  effect  of  repeal  of  a  portion  of  statute  vide  cases  cited 
sub  Legislative  Declaration. 

REPORT 

The  report  of  appraiser  is  made  in  duplicate,  vide  last  sen- 
tence of  §  230,  supra,  page  19. 

Report  of  appraiser  in  resident  estate,  page  50.  In  non- 
resident estate,  page  155. 

Vide  cases  cited  sub  Appraiser,  page  599,  and  Interlocutory 
Order,  page  727. 

RES  ADJUDICATA 

Decree  of  surrogate  in  transfer  tax  proceedings  binding  on 
questions  of  taxation  only.  Matter  of  Ullmann,  137  N.  Y. 
403-407;  Amherst  College  v.  Ritch,  151  id.  282-343. 

Unless  appeal  taken  the  Surrogate's  decree  is  final.  Matter 
of  Wolfe,  137  N.  Y.  205-214;  Matter  of  Davis,  149  N.  Y.  539- 
548.  See,  however,  cases  cited  sub  Appeal,  and  also  sub  Va- 
cating Decree. 

Only  on  material,  relevant  and  necessary  facts  decided  is 
order  binding.  Matter  of  Mason,  120  App.  Div.  738-740,  af- 
firmed, without  opinion,  sub  nom.  Matter  of  Naylor,  189  N.  Y. 
556. 

As  to  claim  of  res  adjudicata  in  an  estate  where  taxation  of 
trust  interest  has  been  suspended,  vide  Matter  of  Irwin,  36 
Misc.  277,  and  Matter  of  Ely,  157  App.  Div.  658,  supra,  page 
818. 

Power  of  appointment  was  exercised  by  donee  over  a  portion 
of  the  property  covered  by  power  of  appointment.  Held,  that 
the  property  transferred  by  the  power  of  appointment  was 
taxable  in  donee's  estate  although  it  had,  by  error,  been  taxed 
in  donor's  estate  at  the  time  of  donor's  death  in  1893.  Matter  of 


832  RESERVATION 

Stuart,  N.  Y.  Law  Journal,  May  10,  1913,  opinion  quoted 
supra,  page  772. 

In  an  estate  where  the  decedent  died  prior  to  chap.  76,  Laws 
1899,  the  appraiser  reported  that  the  value  of  the  interests 
of  the  life  beneficiaries  could  not  then  be  ascertained,  and  that 
the  remaindermen  were  indefinite  and  uncertain  and  that  the 
tax  could  not  then  be  determined.  The  appraiser's  report  was 
confirmed  by  order  of  the  surrogate.  After  the  time  to  appeal 
had  expired  another  appraiser  was  appointed,  and  he  proceeded 
to  fix  the  tax  upon  the  income  which  had  been  paid  to  life 
beneficiaries.  Held,  that  as  the  situation  was  precisely  the 
same  as  it  was  when  the  original  order  was  made,  except  as  to 
the  income  paid,  that  the  original  order  was  absolutely  binding 
upon  Comptroller,  and  that  the  second  report  was  improper. 
Matter  of  Lawrence,  96  App.  Div.  29. 

Code  of  Civil  Procedure,  §  2476,  subdivision  1,  gives  exclusive 
jurisdiction  to  surrogate  of  county  in  which  resident  decedent 
resides,  and  under  §  228  of  Tax  Law  decree  of  such  surrogate 
is  res  adjudicata  against  comptroller  in  proceedings  brought 
in  another  county.  Matter  of  Seaver,  63  App.  Div.  283. 

COMPTROLLER  SHOULD  BE  MADE  PARTY  to  agreement  re- 
garding assets  of  estate  if  he  is  to  be  bound  thereby,  vide  Com- 
promise of  Claim. 

As  to  effect  of  judgment  in  action  to  construe  will  in  which 
comptroller  was  not  a  party  vide  Matter  of  Willets,  119  App. 
Div.  119-126,  affirmed,  without  opinion,  190  N.  Y.  527;  Matter 
of  Edson,  38  App.  Div.  19-21,  affirmed,  on  opinion  below, 
159  N.  Y.  568. 

As  to  action  for  specific  performance  of  an  ante-nuptial  con- 
tract vide  Matter  of  Kidd,  115  App.  Div.  205-210,  reversed  on 
other  points,  188  N.  Y.  274. 

RESERVATION 

As  to  reservation  of  INCOME  vide  Matter  of  Keeney,  194  N.  Y. 
281-286,  supra,  page  362,  and  cases  cited  sub  Gift  and  sub 
Trust  Deed. 

RESETTLEMENT  OF  ORDER 

Vide  Matter  of  Francis,  N.  Y.  Law  Journal,  November  26, 
1913,  post,  page  886. 
"The  surrogate's  order  denying  the  motion  to  resettle  his 


RESIDENCE  833 

first  order  is  not  appealable."    Matter  of  Sondheim,  69  App. 
Div.  5. 

RESIDENCE 

Under  the  second  paragraph  of  §230  the  appraiser  "is 
authorized  to  issue  subpoenas  and  to  compel  the  attendance  of 
witnesses  before  him,"  and  practice  has  been,  in  cases  of  dis- 
puted residence,  for  the  appraiser  to  take  testimony  and  to 
report  his  findings  to  the  surrogate.  In  view  of  the  amend- 
ment by  chap.  732,  Laws  1911,  in  effect  July  21,  1911  (vide 
page  134)  the  question  of  residence  of  decedent  is  being  exam- 
ined into  with  even  closer  scrutiny  than  formerly. 

In  Matter  of  FREDERICK  DENT  GRANT,  N.  Y.  Law  Journal, 
November  14,  1913,  Surrogate  Fowler  held:  "This  appeal  is 
taken  by  the  state  comptroller  from  the  order  entered  upon  the 
appraiser's  report  exempting  the  estate  from  taxation.  In  one 
of  the  affidavits  submitted  to  the  appraiser  by  the  executor  of 
the  estate  it  was  alleged  that  the  decedent  was  a  resident  of 
New  York.  In  another  it  was  alleged  that  the  decedent  was  an 
officer  in  the  United  States  Army  and  that  his  domicile  was  in 
Washington.  His  will  was  probated  here  ar  a  resident  of  New 
York.  The  appraiser  found  that  the  decedent  was  a  non-resident 
of  this  State. 

"THE  APPRAISER  HAD  NO  POWER  TO  DETERMINE  THE  DOMICILE 

OF  THE  DECEDENT.  When  it  appeared  from  the  papers  sub- 
mitted to  him  that  there  were  conflicting  allegations  as  to  the 
domicile  of  the  decedent  the  appraiser  should  have  reported  this 
fact  to  the  surrogate  and  suspended  appraisal  of  the  estate  until 
the  surrogate  had  determined  the  question  of  domicile.  Matter 
of  Bishop,  82  App.  Div.  112.  While  the  appraiser  had  no  juris- 
diction to  pass  upon  the  disputed  question  of  decedent's  domi- 
cile, the  affidavits  upon  this  point  were  submitted  to  him  with- 
out objection;  and  for  the  purpose  of  facilitating  the  disposition 
of  this  appeal  and  saving  the  executrix  the  inconvenience  of 
further  examination  I  will  determine  the  question  of  domicile 
from  the  evidence  submitted  to  the  appraiser,  provided  the  at- 
torneys for  the  parties  to  the  proceeding  file  a  consent  to  this 
effect.  If  such  consent  is  not  filed  before  the  17th  inst.  I  will 
place  the  matter  upon  my  issue  of  fact  calendar  for  the  purpose 
of  taking  testimony  upon  the  question  of  decedent's  domicile." 
Subsequently  on  December  8,  1913,  the  surrogate  handed 
down  an  opinion  in  which  was  exhaustively  reviewed  the  prin- 
53 


834  RESIDENCE 

ciple  of  domicile  and  residence.  The  decedent  was  held  to  be  a 
non-resident,  the  facts  of  the  case  being  "enough  to  make  out 
his  actual  residence  in  Federal  territory." 

Whether  the  GRANT  decision,  will  be  interpreted  to  mean  that 
in  the  future  all  questions  of  disputed  residence  will  be  sub- 
mitted in  the  first  instance  to  the  surrogate  for  his  decision  is 
not  clear. 

It  would  seem  that  the  reasoning  of  the  surrogate  in  MATTER 
OF  BARNES,  N.  Y.  Law  Journal,  December  17,  1913,  supra, 
page  597,  might  be  applied  with  equal  force  to  questions  of 
residence.  As  was  said  by  Surrogate  Fowler  in  the  Barnes  case, 
supra:  "Unless  the  appraiser  may  in  the  first  instance  take 
testimony  on  disputed  questions  of  ownership  and  pass  upon 
questions  of  law  arising  in  the  proceeding  and  necessarily  incident 
to  the  determination  of  the  taxability  of  the  estate,  the  appraiser's 
title  would  seem  to  be  a  misnomer  and  his  duties  in  connection 
with  the  appraisal  of  the  estate  would  be  merely  clerical  and 
perfunctory  and  those  of  an  assessor." 

STATEMENT  IN  WILL.  In  Matter  of  Frederic  Schumacher, 
N.  Y.  Law  Journal,  July  22,  1913,  an  application  was  made  to 
declare  an  estate  exempt.  Surrogate  Cohalan  in  denying  the 
application  said:  "The  decedent  herein  died  April  3,  1912. 
In  his  will,  executed  January  1,  1912,  he  describes  himself  as 
'Frederic  Schumacher,  of  the  City  of  New  York.'  This  clear 
statement  of  the  decedent's  domicile,  made  by  him  a  few  days 
in  excess  of  three  months  before  his  death,  seems  to  fix  his 
domicile  in  the  State  of  New  York.  This  statement  is  not 
explained  by  any  allegation  in  the  moving  papers.  As,  however, 
it  may  be  possible  for  the  executors  to  produce  proof  contro- 
verting or  explaining  this  statement,  an  order  should  be  entered 
appointing  an  appraiser  to  take  proof  on  the  question  of  dece- 
ent's  domicile  with  the  further  proviso  that  if  said  appraiser 
concludes  that  the  decedent  was  a  resident  of  the  State  of  New 
York,  that  he  appraise  the  property  of  said  decedent  ac- 
cordingly." 

Testator  was  born  in  New  Jersey,  living  there  many  years. 
He  died  in  New  Jersey.  About  fifteen  years  before  his  death 
in  1904  he  broke  up  housekeeping  in  New  Jersey,  spent  his 
winters  in  New  York  and  his  summers  in  New  Jersey.  He  lived 
in  either  boarding  house  or  hotel  in  New  York,  and  in  1900  and 
1901  voted  in  New  York,  and  paid  personal  taxes  in  New  York 
several  years  prior  to  his  death  as  a  resident  of  New  York,  and 


RESIDUARY   ESTATE  835 

had  described  himself  in  some  instruments  he  had  executed  as  a 
resident  of  New  York.  The  spring  of  the  year  he  died  he  re- 
turned to  Newton,  N.  J.,  the  place  where  he  was  born,  stating 
that  he  did  not  intend  to  return  to  New  York,  but  did  intend  to 
remain  permanently  in  Newton.  The  surrogate  decided  that 
decedent  was  a  resident,  and  the  Appellate  Division  reversed 
surrogate  and  dismissed  the  transfer  tax  proceeding.  Matter  of 
Nathaniel  W.  White,  116  App.  Div.  183. 

Representative  of  an  estate  claiming  that  decedent  was  a  non- 
resident cannot  be  compelled  to  furnish  information  regarding 
that  portion  of  the  estate  which  would  not  be  subject  to  tax 
were  decedent  a  non-resident.  The  question  of  residence 
should  first  be  determined.  Matter  of  Bishop,  82  App.  Div. 
112. 

Surrogate  may  refer  question  of  residence  to  referee  under 
§  2546  of  Code  of  Civil  Procedure.  Matter  of  Bishop,  111 
App.  Div.  545,  appeal  dismissed,  188  N.  Y.  635. 

FULL  FAITH  AND  CREDIT  due  to  proceedings  of  court  of 
another  state  do  not  require  New  York  courts  shall  be  bound  by 
its  adjudication  on  the  question  of  residence.  Matter  of  Tilt, 
182  N.  Y.  557,  reversed  in  207  U.  S.  43,  sub  nom.  Tilt  v.  Kelsey, 
supra,  page  311;  Matter  of  Cummhigs,  142  App.  Div.  377- 
387. 

BENEFICIARIES'  RESIDENCE  immaterial.  Matter  of  Green, 
153  N.  Y.  223;  Matter  of  Dingman,  66  App.  Div.  228. 

RESIDUARY  ESTATE 

Vide  Legacy. 

TAX  to  be  paid  from  residuary  estate  if  will  so  directs.  Isham 
v.  N.  Y.  Assn.  for  the  Poor,  177  N.  Y.  218;  Matter  of  Smith, 
80  Misc.  140-143;  Matter  of  Samuel  Myers,  N.  Y.  Law  Journal, 
November  22,  1913,  opinion  quoted,  supra,  page  759. 

A  direction  to  pay  legacies  "without  any  rebate  or  reduction 
whatever"  held  not  to  mean  that  the  tax  was  to  be  paid  out  of 
residuary  estate.  Jackson  v.  Tailer,  41  Misc.  36,  affirmed, 
without  opinion,  184  N.  Y.  603. 

Interest  of  a  decedent  in  the  residuary  estate  of  another 
decedent  is  subject  to  tax,  but  the  tax  cannot  be  "imposed  on 
the  legacy  of  a  residuary  estate  until  the  amount  of  that  estate 
is  ascertained."  Matter  of  Clinch,  180  N.  Y.  300-303;  vide 
etiam  second  sentence  of  §  222;  and  Matter  of  Cans,  N.  Y. 
Law  Journal,  April  13,  1912,  opinion  quoted  post,  page  862. 


836  RESULTING   TRUST 

ANNUITIES  directed  to  be  purchased  outright  for  designated 
beneficiaries  are  to  be  deducted  from  residuary  estate  at  their 
actual  cost  value,  and  not  at  the  value  calculated  by  Superin- 
tendent of  Insurance  under  §  230.  Matter  of  Hutchinson,  105 
App.  Div.  487.  Vide  cases  cited  sub  Annuities. 

EFFECT  OF  DEATH  OF  RESIDUARY  LEGATEES  discussed  hi 
Matter  of  Hoffman,  201  N.  Y.  247. 

RESULTING  TRUST 

Where  life  tenant  took  the  property  in  which  she  had  life 
interest  and  invested  it  in  her  own  name,  there  is  a  resulting 
trust  for  the  benefit  of  the  remaindermen,  and  the  property  is 
not  taxable  in  life  tenant's  estate.  Matter  of  Elizabeth  W. 
Wheeler,  115  App.  Div.  616. 

RETROACTIVE 

Laws  1911,  chap.  732,  which  changed  the  rates  of  tax  is  not 
retroactive.  Matter  of  Abraham,  151  App.  Div.  441-442; 
Matter  of  Niles,  N.  Y.  Law  Journal,  January  5,  1912;  Matter  of 
Bolton,  157  App.  Div.  935,  appeal  pending. 

Amendment  to  statute  not  retroactive  unless  act  so  declares. 
Matter  of  Miller,  110  N.  Y.  216-223;  Matter  of  Howe,  112  id. 
100;  Matter  of  Enston,  113  id.  174-183;  Matter  of  Van  Kleeck, 
121  id.  701-703;  Matter  of  Prime,  136  id.  347;  Matter  of  Fayer- 
weather,  143  id.  114;  Matter  of  Seaman,  147  N.  Y.  69;  Matter  of 
Davis,  149  id.  539-545;  Matter  of  Sloane,  154  id.  109-113; 
Matter  of  Pettit,  65  App.  Div.  30,  affirmed,  on  opinion  below, 
171  N.  Y.  654. 

Amendment  by  Laws  1897,  chap.  284,  now  subdivision  6, 
§  220,  retroactive  in  so  far  as  it  taxes  the  exercise  of  a  power  of 
appointment  derived  from  a  disposition  of  property  made  prior 
to  the  amendment.  Held  to  be  constitutional  in  Matter  of 
Vanderbilt,  163  N.  Y.  597,  supra,  page  240. 

Legislature  may  release  from  the  provisions  of  the  statute 
property  transferred  prior  to  the  passage  of  the  releasing  act. 
Church  of  the  Transfiguration  v.  Niles,  86  Hun,  221-223. 

In  so  far  as  chap.  76,  Laws  1899,  attempted  to  tax  remainders 
and  reversions  which  had  vested  prior  to  June  30,  1885,  it  is 
unconstitutional.  Matter  of  Pell,  171  N.  Y.  48.  For  recent 
discussion  of  cases,  vide  Matter  of  Smith,  150  App.  Div.  805. 

Section  244  added  by  chap.  382,  Laws  1900,  is  not  retroactive. 
Matter  of  Graves,  171  N.  Y.  40. 


SAFE   DEPOSIT   BOX  837 

Section  245  is  retroactive  and  constitutional.  The  provisions 
of  this  section  were  first  added  to  the  Tax  Law  by  Laws  1899, 
chap.  737,  in  effect  May  26,  1899,  as  §  282.  By  Laws  of  1909, 
chap.  62,  it  was  transferred  to  the  transfer  tax  portion  of  the 
Tax  Law  as  §  245.  Matter  of  Strong,  117  App.  Div.  796-799; 
Matter  of  Moench,  39  Misc.  480. 

Vide  cases  cited  sub  Doubt  and  sub  Legislative  Declaration. 

REVALUATION 

Vide  Appeal;  Reappraisal;  Vacating  Decree. 

REVERSAL 

If  order  of  reversal  is  silent  as  to  grounds  on  which  it  is  made 
it  will  be  assumed  that  the  reversal  was  solely  on  law.  Matter 
of  Brandreth,  169  N.  Y.  437-440;  Matter  of  Davis,  184  id.  299; 
§  1338  of  Code  of  Civil  Procedure. 

REVOCATION,  POWER  OF 

Vide  Gift;  Trust  Deed. 

SAFE  DEPOSIT  BOX 

As  to  property  not  belonging  to  decedent  contained  in  dece- 
ent's  safe  deposit  box  vide  supra,  page  68. 

Order  permitting  search  of  safe  deposit  for  will,  page  59. 

Practice  on  taking  of  inventory  of  contents  of  safe  deposit 
box,  page  64. 

Partnership  safe  deposit  box,  page  753. 

Petition  to  surrogate  for  order  permitting  opening  of  safe 
deposit  box,  page  57. 

Waiver  from  comptroller  re  search  of  safe  deposit  box  for 
will,  page  60. 

Waiver  re  release  of  safe  deposit  box,  page  67. 

The  recent  decision  of  the  Appellate  Division,  First  Depart- 
ment (November  7,  1913),  in  the  case  of  PEOPLE  v.  MERCAN- 
TILE SAFE  DEPOSIT  COMPANY  is  of  such  importance  that  it  seems 
advisable  to  quote  the  opinion  in  full.  The  practice  as  has 
existed  for  many  years  and  still  prevails  is  set  forth  supra, 
pages  64  et  seq.  The  opinion  reads: 

"The  action  was  brought  to  recover  a  penalty  under  Section  227  of 
the  Tax  Law  as  it  stood  on  July  22,  1906,  (Laws  1905,  Chapter  368). 

"The  defendant,  The  Mercantile  Safe  Deposit  Company,  was  or- 
ganized tinder  Chapter  613,  Laws  1875  (since  incorporated  into  Sec- 


838  SAFE    DEPOSIT   BOX 

tion  300  of  the  Banking  Law),  authorizing  it  to  act  as  bailee  for  the 
.storage  and  safekeeping  of  jewelry,  plate  and  other  valuables,  and  to 
guarantee  their  safety;  also  to  let  vaults,  safes  and  other  receptacles 
for  the  use  of  its  customers,  and  the  safe-keeping  of  their  possession. 
Under  this  charter,  the  defendant  has  conducted  what  are  practically 
two  distinct  classes  of  business:  a  storage  business  and  a  safe  and  box 
renting  business.  In  the  course  of  the  former,  the  defendant  receives 
articles  to  be  stored,  issues  a  receipt  therefor,  and  takes  manual  pos- 
session thereof,  the  articles  being  placed  in  vaults  to  which  representa- 
tives of  the  Company  alone  have  access.  On  the  surrender  of  the 
receipt,  the  articles  covered  thereby  are  delivered  to  the  owner.  In 
the  business  of  renting,  the  defendant  rents  to  its  customer,  vaults, 
safes  and  boxes,  all  of  which  are  contained  in  a  larger  vault  or  room  to 
which  access  is  had  through  a  gate  guarded  by  one  of  the  defendant's 
employees.  The  customer  receives  the  key  or  fixes  the  combination  of 
the  lock  to  his  particular  vault,  safe  or  box,  and  during  the  period  of  the 
letting,  has  sole  control  of  the  only  means  of  access  thereto,  and  uses 
the  same  as  a  place  of  safe-keeping  for  whatever  valuables  he  chooses  to 
place  therein,  such  valuables  never  coming  into  the  manual  custody  of 
the  Company,  and  the  company  having  no  control  over  the  same  what- 
soever, except  such  as  is  involved  in  guarding  the  premises  and  the 
means  of  access  to  the  general  vault. 

"Through  the  agency  of  one  Osborne,  in  April,  1897,  the  defendant 
rented  a  safe,  which  was  recorded  on  defendant's  books  in  the  name  of 
'RUSSELL  SAGE  OR  CHARLES  W.  OSBORNE,'  who  were  severally  to  have 
access  to  the  same,  Osborne's  right  of  access  to  be  uninterrupted  in  the 
event  of  Sage's  death.  Sage  never  visited  the  safe,  but  Osborne  used 
it  constantly  putting  in  and  taking  out  securities.  On  July  22,  1906, 
Sage  died,  a  fact  which  was  almost  immediately  brought  to  the  knowl- 
edge of  defendant's  officers.  Thereafter  Osborne's  use  of  the  safe  con- 
tinued as  theretofore  and  defendant  did  nothing  to  interfere  with  his 
removing  any  of  the  valuables  contained  therein,  and  gave  no  notice  of 
any  kind  to  the  State  Comptroller.  Although  defendant  had  no  knowl- 
edge whatsoever,  at  any  time,  of  the  contents  of  the  safe,  in  fact,  at 
the  time  of  Sage's  death,  there  was  contained  therein,  securities  be- 
longing to  Sage  individually,  securities  belonging  to  Osborne  individ- 
ually, and  securities  belonging  to  persons  who  had  pledged  the  same  to 
Sage  as  collateral  for  loans  made  by  him,  but  under  circumstances 
which  gave  Osborne,  in  the  event  of  Sage's  death,  the  right  to  receive 
payment  of  the  debt  and  surrender  the  collateral.  These  various  se- 
curities were  contained  in  one  or  more  tin  boxes. 

"After  Sage's  death,  Osborne,  who  became  one  of  his  executors, 
continued  to  look  after  his  loans  and  from  time  to  tune,  as  required, 
took  away  securities  which  had  been  pledged  to  Sage,  but  none  of  the 
securities  belonging  to  Sage  personally  were  removed,  save  as  some  of 
them  may  have  been  contained  in  a  tin  box  in  which  some  of  Osborne's 


SAFE   DEPOSIT   BOX  839 

securities  or  some  of  the  pledged  securities  were  kept,  which  tin  box 
was  taken  by  Osborne  to  his  office  for  use  in  the  business  of  the  day, 
and  was  returned  at  the  end  of  the  day  with  Sage's  individual  securities 
intact. 

"At  a  date  suiting  his  earliest  convenience,  a  representative  of  the 
State  Comptroller  visited  the  safe  in  company  with  a  representative 
of  the  Sage  Estate,  and  inspected  all  of  the  contents  belonging  to  Sage. 
Proceedings  to  fix  the  transfer  tax  on  the  Sage  Estate  were  duly  begun 
and  concluded,  and  the  tax  was  duly  paid  in  full. 

"Section  227  of  the  Tax  Law  contains  the  following: 

"'No  safe  deposit  company  *  *  *  having  in  possession  or  under 
control,  securities,  deposits,  or  other  assets  belonging  to  or  standing  in 
the  name  of  a  decedent  *  *  *  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in  the  safe  deposit  company  *  *  * 
making  the  delivery  or  transfer  herein  provided,  shall  deliver  or  trans- 
fer the  same  to  the  executors,  administrators  or  legal  representatives 
of  said  decedent,  or  to  the  survivor  or  survivors,  when  held  in  the  joint 
names  of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or 
request,  unless  notice  of  the  time  and  place  of  such  intended  delivery 
shall  personally  be  served  upon  the  state  comptroller  at  least  ten  days 
prior  to  said  delivery  or  transfer;  nor  shall  any  such  safe  deposit  com- 
pany *  deliver  or  transfer  any  securities,  deposits  or  other 
assets  belonging  to  or  standing  in  the  name  of  a  decedent  *  *  * 
without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax 
and  interest  which  may  be  assessed  on  account  of  the  delivery  or 
transfer  of  such  securities,  deposits  or  other  assets.  *  *  *  And  it 
shall  be  lawful  for  the  said  state  comptroller,  personally  or  by  rep- 
resentative, to  examine  said  securities,  deposits  or  assets  at  the  time 
of  such  delivery  or  transfer.'  For  a  failure  to  serve  notice  or  to  allow 
the  examination  provided  for,  and  for  a  failure  to  retain  sufficient  of 
the  securities  or  assets  to  pay  the  tax,  the  offender  is  made  liable 
for  the  full  amount  of  the  tax  with  interest,  'and  in  addition  thereto, 
a  penalty  of  not  less  than  five  or  more  than  twenty-five  thousand 
dollars.' 

"There  are  several  grounds  upon  which  we  might  affirm  the  j udgment 
appealed  from,  but  WE  PREFER  TO  PUT  OUR  DECISION  ON  THE  BROAD 

GROUND  THAT  THE  STATUTE  DOES  NOT  COVER  ANY  SUCH  SITUATION  AS 

THE  EVIDENCE  DISCLOSES  IN  THIS  CASE.  It  is  not  necessary  for  us  to 
resort  to  the  rule  of  strict  construction,  applicable  to  statutes  under 
which  penalties  are  sought  to  be  enforced,  for  in  no  legal  sense  can  the 
defendant  be  said  to  have  had  'possession'  or  'control'  of  any  of  Sage's 
securities.  In  a  limited  sense,  it  had  the  custody  of  such  securities  be- 
cause of  the  relation  which  it  occupied  to  the  safe  in  which  they  were 
contained.  Having  neither  'possession'  nor  'control'  of  the  securities, 
the  statute  imposed  no  duty  whatsoever  upon  the  defendant,  nor  could 
it  have  obeyed  the  statute  without  invading  the  legal  rights  of  its 


840  SCHEDULES 

customer.  The  relation  between  the  defendant  and  its  customer, 
whether  in  this  case  he  be  regarded  as  Osborne  and  Sage  jointly 
or  severally,  may  have  some  elements  comparable  to  those  in  a  case 
of  bailment,  but,  the  legal  status  of  the  parties  seem  to  me,  to  bear  a 
closer  analogy  to  that  arising  from  the  relation  which  exists  between 
tenants  of  a  general  office  building  and  the  landlord  thereof,  who  keeps 
within  his  control  and  under  his  care  and  protection,  the  common 
means  of  access  to  the  building  and  to  the  suites  of  offices  therein,  but 
as  to  which,  subject  to  any  regulations  that  may  have  been  established 
by  the  landlord,  the  rights  of  the  tenants  are  exclusive. 

"So  far  as  I  can  see,  the  defendant  in  this  case  had  no  more  'posses- 
sion '  of  or  '  control '  over  the  securities  contained  in  the  box  in  question, 
than  such  landlord  has  over  securities  contained  in  a  safe  belonging  to 
one  of  his  tenants  and  contained  in  the  private  office  of  the  latter. 

"The  situation  of  the  defendant  with  respect  to  securities  contained 
in  safes  or  other  receptacles  of  deposit  rented  to  its  customers,  was 
manifestly  different  from  the  relation  which  it  occupied  toward  those 
who  made  physical  deposit  of  valuables  with  defendant  for  which  a 
receipt  was  issued.  In  every  such  case  the  defendant  was  clearly  a 
bailee,  having  physical  custody  of  the  articles  with  power  to  control 
the  delivery  thereof. 

"The  judgment  and  order  should  be  affirmed  with  costs." 

SCHEDULES 

Schedules  of  Assets,  page  96. 
Schedule  A1  page    97. 

A2      "    102. 

A3      "    105. 

A4      "    112. 

A5      "    117. 

A6      "    121. 

Schedules  of  Deductions,  page  124. 
B1  page  124. 
B2      "  125. 
B3      "  129. 
B4      "  132. 

Schedule  C — power  of  appointment,  page  122. 
Schedule  D — beneficiaries  and  their  interests,  page  94. 
Schedule  E — property  held  jointly  or  in  trust,  page  123. 

SCIENTIFIC  CORPORATION  OR  ASSOCIATION 

Entitled  to  exemptions  of  second  sentence  of  §  221,  supra, 
page  41. 


SPECIAL   GUARDIAN  841 

SEAT  IN  STOCK  EXCHANGE 

Taxable  in  estate  of  resident.  Matter  of  Hellman,  174  N.  Y. 
254;  Matter  of  Curtis,  31  Misc.  83. 

Not  taxable  in  non-resident  estate  since  amendment  of  sub- 
division 2  of  §  220  by  Laws  1911,  chap.  732,  in  effect  July  21, 
1911,  but  prior  to  amendment  it  was  taxable.  Matter  of 
Glendinning,  68  App.  Div.  125,  affirmed,  without  opinion, 
171  N.  Y.  684. 

SECOND  APPRAISAL 

Vide  Vacating  Decree;  Reappraisal.  Report  of  appraiser 
may  be  remitted  by  surrogate.  Matter  of  Kelly,  29  Misc.  169- 
170;  Matter  of  Caroline  W.  Astor,  137  App.  Div.  922,  opinion 
of  surrogate  quoted  supra,  page  107. 

SECRET  RECIPES 

In  Matter  of  Brandreth,  28  Misc.  468-473,  supra,  page  255, 
affirmed,  169  N.  Y.  437,  the  valuation  of  the  stock  of  the  Porous 
Plaster  Company  was  under  consideration.  It  was  held  that 
the  appraiser  "properly  considered  these  secret  recipes  of  value 
in  ascertaining  the  value  of  the  corporate  shares." 

SETTLEMENT 

Vide  Composition  of  Tax;  Compromise  of  Claim. 

SILVERWARE 

Should  be  itemized  and  set  forth  in  Schedule  A3,  and  ap- 
praisal by  expert  furnished,  vide  supra,  page  108. 

SISTER 

Entitled  to  five  thousand  dollars  exemption  and  the  minimum 
rates  of  subdivision  1  of  §  221a;  supra,  page  45. 

SITUS 

Vide  MoUlia  Sequunter  Personam. 

SPECIAL  GUARDIAN 

Section  231  provides  that  the  surrogate  may  at  any  stage  of 
the  proceedings  appoint  a  special  guardian.  It  was  formerly  the 
practice  to  appoint  special  guardians  but  this  practice  is  now 
discouraged  by  the  courts.  Matter  of  Kemp,  7  App.  Div. 


842  SPECIAL  POWER   IN  TRUST 

609,  affirmed  on  opinion  below,   151   N.  Y.  619;  Matter  of 
Post,  5  App.  Div.  113. 

Surrogate  Sexton  of  Oneida  County  in  Matter  of  Jones,  54 
Misc.  202,  where  the  transfers  of  two  infants  were  taxed, 
said  at  page  206:  "The  remaining  point  to  be  considered  is 
whether  a  special  guardian  should  have  been  appointed  by  the 
surrogate  for  the  infant  legatees,  pending  the  appraisal,  in  order 
to  acquire  jurisdiction  to  tax  their  legacies.  I  hold  upon  the 
facts  and  record  in  this  particular  case  that  such  an  omission 
was  not  destructive  of  jurisdiction." 

SPECIAL  POWER  IN  TRUST 

Vide  Matter  of  Cooksey,  182  N.  Y.  92-97. 

SPECIAL  PROCEEDING 

A  transfer  tax  proceeding  is  a  special  proceeding.  Amherst 
College  v.  Ritch,  151  N.  Y.  282-342;  Morgan  v.  Warner,  45  App. 
Div.  424-426,  affirmed,  on  opinion  below,  162  N.  Y.  612;  Code  of 
Civil  Procedure,  §  3334. 

SPECIAL  TAX 

"  It  is  not  a  general  but  a  special  tax  reaching  only  to  special 
cases  and  affecting  only  a  special  class  of  persons."  Matter  of 
Mergentime,  129  App.  Div.  367-374,  affirmed,  on  opinion  below, 
195  N.  Y.572. 

SPECIFIC  BEQUEST  OR  DEVISE 

Subdivision  3  of  §  220.    Vide  supra,  page  155. 

As  to  contract  liability  for  improvements  to  be  made  upon 
property  specifically  devised  vide  Matter  of  Amsinck,  N.  Y. 
Law  Journal,  February  21, 1913,  opinion  quoted  supra,  page  657. 

STAMPS 

Vide  Stock  Transfer  Tax. 

STATE  COMPTROLLER 

Vide  Comptroller. 

STATUARY 

Vide  §  2216  supra,  page  43  as  to  when  exempt. 

Statuary  should  be  set  forth  in  Schedule  A3,  with  title  and 
name  of  sculptor,  and  appraisal  by  expert  should  be  furnished, 
vide  supra,  page  108. 


STEPCHILD  843 

STATUTE  OF  LIMITATIONS 

"The  provisions  of  the  Code  of  Civil  Procedure  relative  to 
the  limitation  of  time  of  enforcing  a  civil  remedy  shall  not 
apply  to  any  proceeding  or  action  taken  to  levy,  appraise, 
assess,  determine  or  enforce  the  collection  of  any  tax  or  penalty 
prescribed  by  this  article,  and  this  section  shall  be  construed  as 
having  been  in  effect  as  of  date  of  the  original  enactment  of  the 
inheritance  tax  law,  provided,  however,  that  as  to  real  estate 
in  the  hands  of  bona  fide  purchasers,  the  transfer  tax  shall  be 
presumed  to  be  paid  and  cease  to  be  a  lien  as  against  such  pur- 
chasers after  the  expiration  of  six  years  from  the  date  of  ac- 
crual." Section  245,  Matter  of  Strang,  117  App.  Div.  796; 
Matter  of  Moench,  39  Misc.  480;  Matter  of  McGee,  N.  Y. 
Law  Journal,  February  7,  1913,  opinion  quoted  sub  Payment 
of  Tax. 

As  to  BONA  FIDE  PURCHASES  OF  REAL  ESTATE  vide  cases 
cited  sub  Lien  of  Tax. 

Decedent  died  1888  and  transfer  tax  proceedings  not  insti- 
tuted until  1898.  Motion  to  vacate  order  assessing  tax  denied. 
Matter  of  Jones,  54  Misc.  202. 

CLAIMS  AGAINST  ESTATE  discussed,  supra,  page  131. 

REFUND  UNDER  §  225  discussed  in  Matter  of  Hoople,  179 
N.  Y.  308;  vide  etiam  Matter  of  Buckingham,  106  App.  Div. 
13-17;  Matter  of  Von  Post,  35  Misc.  367. 

STATUTES 

Present  statute,  supra,  page  3. 

Prior  statutes  arranged  in  chronological  order  supra,  page  403. 

Decedent  Estate  Law,  supra,  page  535. 

Tax  on  transfers  of  stock,  supra,  page  564. 

STEPCHILD 

No  mention  of  stepchild  is  made  in  the  present  statute. 

Under  Laws  1905,  chap.  368,  in  effect  June  1,  1905,  step- 
child was  not  in  1%  class.  Matter  of  Elizabeth  W.  Wheeler, 
115  App.  Div.  616;  Matter  of  Hardner,  124  App.  Div.  77; 
Matter  of  Stebbins,  52  Misc.  438. 

By  Laws  1907,  chap.  204,  in  effect  April  25,  1907,  stepchild 
was  put  in  1%  class,  but  by  Laws  1908,  chap.  310,  in  effect 
May  18,  1908,  stepchild  was  not  in  1%  class  unless  coming 
within  the  definition  of  mutually  acknowledged  relation  of 
parent  and  child. 


844  STOCK 

The  amendment  by  Laws  1911,  chap.  732,  in  effect  July  21, 
1911,  omits  any  reference  to  stepchild,  so  that  a  stepchild  now 
comes  within  subdivision  2  of  §  221a  unless  by  reason  of  mutu- 
ally acknowledged  relationship  of  parent  and  child  it  brings  it- 
self within  the  provisions  of  subdivision  1  of  §  221a. 

Where  will  gave  all  decedent's  property  "to  those  persons, 
relatives  of  my  full  blood  only,  who  would  be  entitled  to  receive 
my  personal  estate  incase  of  my  death  unmarried  and  intestate," 
a  nephew  of  testator,  who  was  also  a  stepson,  was  taxed  as  a 
nephew  and  not  as  a  stepson.  Matter  of  Linkletter,  134  App. 
Div.  309. 

STOCK 

(1)  Resident  estate.  (4)  Decisions  in  non-resident  es- 

(2)  Non-resident.  tates  prior  to  1911  amend- 

(3)  Non-resident  prior  to  1911.  ment. 

(1)  Resident  estate 

In  resident  estate  the  transfer  of  stock  in  either  domestic  or 
foreign  corporations  is  subject  to  tax.  Matter  of  Merriam, 
141  N.  Y.  479-485,  sustained  in  163  U.  S.  625,  sub  nom.  United 
States  v.  Perkins;  subdivision  1  of  §  220  and  third  sentence  of 
§243. 

The  stock  is  subject  to  tax  even  though  the  certificate  be 
without  the  state.  Matter  of  Bushnell,  73  App.  Div.  325-327, 
affirmed,  without  opinion,  172  N.  Y.  649. 

As  to  LARGE  BLOCKS  OF  STOCK,  vide  page  115. 

THE  VALUATION  OF  STOCK  is  a  question  of  fact.  Matter  of 
Thayer,  193  N.  Y.  430-433. 

Stock  should  be  set  forth  in  Schedule  A4,  supra,  page  112. 
For  discussion  as  to  stock  customarily  bought  and  sold  on  the 
market  vide  pages  113  et  seq. 

UNLISTED  STOCK  discussed  sub  Closely  Held  Stock. 

(2)  Non-resident 

In  non-resident  estates  the  transfer  of  stock  is  not  taxable, 
even  though  it  be  of  a  New  York  corporation  and  the  certificate 
of  stock  be  physically  located  within  the  state  at  the  time  of 
decedent's  death.  Vide  page  133. 

(3)  Non-resident  prior  to  1911  amendment 

From  the  amendment  by  Laws  of  1887,  chap.  713,  Matter  of 


STOCK   TRANSFER   TAX  845 

Romaine,  127  N.  Y.  80-84,  supra,  page  171,  to  the  amendment 
by  Laws  1911,  chap.  732,  supra,  page  134,  in  effect  July  21, 
1911,  the  transfer  of  stock  in  New  York  corporation  has  been 
taxable  in  non-resident  estate.  A  transfer  of  stock  in  non- 
resident estate  made  since  the  1911  amendment  is  not  subject 
to  the  tax. 

(4)  Decisions  in  non-resident  estates  prior  to  1911  amendment 

CERTIFICATES  NOT  WITHIN  STATE  subject  to  tax.  Matter  of 
Bushnell,  supra. 

FOREIGN  CORPORATIONS,  stock  in,  not  subject  to  tax  although 
certificates  within  state.  Matter  of  James,  144  N.  Y.  6 ;  Matter 
of  Bishop,  82  App.  Div.  112-115. 

JOINT-STOCK  ASSOCIATION  stock  held  by  a  non-resident  de- 
cedent in  American  News  Company  taxable  only  on  proportion 
of  assets  located  in  New  York.  Matter  of  Willmer,  153  App. 
Div.  804. 

NATIONAL  BANK  located  in  New  York  a  domestic  corporation 
under  provisions  of  subdivision  18  of  §  3343,  Code  of  Civil 
Procedure,  and,  prior  to  said  1911  amendment  transfer  of 
stock  in  non-resident's  estate  subject  to  tax.  Matter  of  Gush- 
ing, 40  Misc.  505. 

REORGANIZATION  CERTIFICATES  issued  by  a  New  York  Trust 
Company  re  stock  in  foreign  corporations  not  taxable.  Matter 
of  Rhoads,  190  N.  Y.  525. 

STOCK  HELD  IN  ANOTHER'S  NAME  subject  to  tax.  Matter  of 
Newcomb,  172  N.  Y.  608. 

Stock  in  New  York  corporation  taxed  on  basis  of  market 
value  and  not  on  proportion  of  assets  in  New  York.  Matter  of 
Palmer,  183  N.  Y.  238. 

Stock  in  corporation  organized  under  the  laws  of  New  York 
and  other  states  should  be  appraised  upon  the  basis  of  an 
apportionment  of  the  property.  Matter  of  Cooley,  180  N.  Y. 
220;  Matter  of  Thayer,  193  N.  Y.  430. 

STOCK  TRANSFER  TAX 

The  statute  relative  to  tax  on  transfers  of  stock  is  Article  12 
of  the  Tax  Law.  It  is  set  forth  supra,  page  564. 

A  transfer  of  stock  from  the  name  of  the  decedent  to  the 
executor,  administrator  or  trustee  of  the  estate  does  not  re- 
quire stock  transfer  stamps.  U.  S.  Radiator  Co.  v.  New  York, 


846  STORAGE    BILLS 

208  N.  Y.  144-152.    A  transfer  from  the  executor,  administrator 
or  trustee  does  require  stock  transfer  stamps. 

Decedent  made  a  gift  of  stock  to  his  sister  a  day  or  two 
previous  to  his  death,  being  stricken  with  a  fatal  illness  at  the 
time.  The  Surrogate  was  about  to  enter  a  decree  adjudging  the 
sister  and  not  the  administratrix  to  be  the  owner  of  the  stock, 
when  it  transpired  that  transfer  stamps  had  not  been  affixed 
as  required  by  §  270  of  the  Tax  Law.  The  attorney  for  the 
sister  thereupon  claimed  the  right  to  and  offered  to  affix 
stamp.  Surrogate  Heaton  of  Rensselaer,  Matter  of  Raleigh, 
75  Misc.  55,  in  disposing  of  the  matter  said:  "Thus  was  raised 
the  question  whether  the  donee  of  corporate  stock,  claiming  the 
title  by  gift  causa  mortis  or  inter  vivos,  can  prove  such  gift  in  a 
case  where  the  donor  did  not  affix  the  proper  stamps  to  the 
certificates  at  the  time  of  the  gift  and  delivery  thereof.  *  *  * 
It  must  be  held  that  no  evidence  of  a  gift  or  sale  of  stock,  where 
the  delivery  of  the  certificate  was  made  without  the  affixing 
of  the  required  stamps  at  the  time  of  the  delivery,  can  be  re- 
ceived. This  results  in  making  such  a  sale  or  gift  impossible, 
whenever  the  defense  that  no  stamp  was  affixed  at  the  time  of 
delivery  of  the  certificate  of  stock  is  properly  pleaded,"  citing 
Blau  v.  Flint,  138  App.  Div.  846;  Mutual  Life  Insurance  Co. 
v.  Nicholas,  144  id.  95,  and  Sheridan  v.  Tucker,  145  id.  145. 

STORAGE  BILLS 

Vide  Schedule  B3,  page  132. 

STRICTLY  CONSTRUED 

Vide  Doubt. 

SUBMISSION  OF  CONTROVERSY 

Vide  Controversy. 

SUBPCENA 

The  "appraiser  is  authorized  to  issue  subpoenas  and  to  compel 
the  attendance  of  witnesses  before  him  and  to  take  the  evidence 
of  such  witnesses  under  oath."  Second  paragraph  of  §  230. 
Vide  cases  cited  sub  Contempt. 

SUFFICIENCY  OF  EVIDENCE 

Vide  Burden  of  Proof;  Laws  of  Another  State;  Testimony. 


SUPREME    COURT  847 

SUPERINTENDENT  OF  INSURANCE 

"  The  value  of  every  future  or  limited  estate,  income,  interest 
or  annuity  dependent  upon  any  life  or  lives  in  being,  shall  be 
determined  by  the  rule,  method  and  standard  of  mortality  and 
value  employed  by  the  superintendent  of  insurance  in  ascer- 
taining the  value  of  policies  of  life  insurance  and  annuities  for 
the  determination  of  liabilities  of  life  insurance  companies, 
except  that  the  rate  of  interest  for  making  such  computation 
shall  be  five  per  centum  per  annum."  Third  paragraph  of  §  230. 

The  calculation  is  made  by  the  superintendent  of  insurance 
under  authority  of  the  second  paragraph  of  §  231.  The  repre- 
sentatives of  the  estate  do  not  make  the  application;  it  is  made 
by  the  surrogate  or  by  the  appraiser  acting  on  behalf  of  the 
surrogate. 

The  computation  is  to  be  made  on  a  5%  basis  as  provided  by 
§  230,  and  not  upon  the  interest  actually  to  be  received  by  the 
beneficiary.  Matter  of  Potter,  199  N.  Y.  561,  supra,  page  371. 
Vide  cases  cited  sub  Annuities  and  Life  Estates. 

SUPREME  COURT 

REAPPRAISAL  may  be  ordered  by  justice  of  supreme  court 
under  the  provisions  of  the  second  paragraph  of  §  232.  Vide 
Reappraisal. 

APPEAL  from  order  made  by  surrogate  on  hearing  of  appeal 
under  the  provisions  of  the  first  sentence  of  §  232  should  be 
taken  to  Appellate  Division  of  Supreme  Court.  Morgan  v. 
Warner,  45  App.  Div.  424-426,  affirmed,  on  opinion  below, 
162  N.  Y.  612;  etiam  cases  cited  sub  Appeal. 

SUBMISSION  OF  A  CONTROVERSY  under  §  1279  of  Code  of  Civil 
Procedure,  may  be  made.  Catlin  v.  Trustees  of  Trinity  College, 
113  N.  Y.  133;  Isham  v.  N.  Y.  Assn.  for  Poor,  177  id.  218. 
Vide  Weston  v.  Goodrich,  86  Hun,  194. 

CONSTRUCTION  OF  WILL  by  Supreme  Court  involved  question 
of  whether  inheritance  tax  should  be  paid  by  legatee  or  whether 
it  should  be  paid  out  of  residuary  estate.  The  Court  at  Special 
Term  discussed  question  and  decided  that  the  words  "without 
any  rebate  or  deduction  whatever,"  did  not  refer  to  inheritance 
tax  and  that  the  tax  should  be  paid  by  legatee  and  not  out  of 
residuary  estate.  Jackson  v.  Tailer,  41  Misc.  36,  affirmed, 
without  opinion,  184  N.  Y.  603. 

As  to  construction  of  will  by  Supreme  Court  vide  etiam. 
Matter  of  Edson,  38  App.  Div.  19,  affirmed,  on  opinion  below, 


848  SURROGATE 

159  N.  Y.  568;  Matter  of  Willets,  119  App.  Div.   119-126, 
affirmed,  on  opinion  of  surrogate,  190  N.  Y.  527. 
Vide  Mandamus. 

SURROGATE 

THE  SURROGATE  ACTS  IN  A  DUAL  CAPACITY.  By  the  first 
sentence  of  §  231  the  surrogate  is  a  taxing  officer  or  appraiser. 
When  a  person  is  dissatisfied  and  seeks  to  review  upon  appeal 
the  surrogate's  order  fixing  the  tax  the  appeal  is  not  taken  to  an 
appellate  court  but  is,  under  the  first  sentence  of  §  232,  taken 
to  the  surrogate  himself,  who  thereupon,  "acting  judicially," 
hears  the  appeal  from  his  own  order.  Matter  of  Costello,  189 
N.  Y.  288-291;  Matter  of  Cora  F.  Barnes,  N.  Y.  Law  Journal, 
December  17,  1913. 

It  is  not  plain  what  this  roundabout  method  accomplishes. 
Its  inconvenience  is  manifest,  and  it  cannot  be  defended  upon 
logic.  Where  the  surrogate  determines  the  "cash  value"  of  an 
estate  and  the  amount  of  tax  to  which  the  same  is  liable  (§231) 
he  affixes  his  signature  to  an  order.  If  the  order  is  not  a  proper 
one  then  the  surrogate  should  not  sign  it.  If  he  believes  it  to 
be  an  order  in  compliance  with  the  law,  there  does  not  seem  to 
be  any  good  reason  why  he  should  be  called  upon  to  make  a 
second  order  adjudging  that  his  first  order  was  correct.  The 
responsibility  of  the  first  order  is  his  (Matter  of  Fuller,  62 
App.  Div.  428-431),  and  as  was  said  by  Surrogate  Varnum  in 
Matter  of  Kelly,  29  Misc.  169-170,  "it  has  been  by  no  means 
unusual  in  this  court  to  remit  a  proceeding  to  the  appraiser  " 
when  the  surrogate  has  not  before  him  sufficient  evidence  upon 
which  to  make  his  order.  The  remitting  of  an  appraiser's  re- 
port by  the  surrogate  has  been  held  not  to  be  appealable  (Matter 
of  Astor,  137  App.  Div.  922),  and  therefore  it  is  manifest  that 
the  surrogate  is,  by  the  present  statute,  put  in  the  rather  gro- 
tesque position  of  being  asked  by  an  appeal  under  §  232  if  he 
really  meant  his  decision  to  be  final  when  he  signed  his  name  to 
the  order  appealed  from. 

JURISDICTION  OF,  IN  RESIDENT  estates,  page  56.  In  NON- 
RESIDENT estates,  page  137. 

DECREE  "binding  upon  the  question  of  taxation  only." 
Amherst  College  v.  Ritch,  151  N.  Y.  282-343. 

CONSTRUCTION  OF  WILLS  necessary.  Matter  of  Peters,  69 
App.  Div.  465;  Matter  of  Turner,  82  Misc.  25. 

On  His  OWN  MOTION  may  order  appraisal,  page  72. 


SURROGATE  849 

PETITION  TO  SURROGATE  to  appoint  appraiser,  page  74. 

May  act  as  appraiser,  page  83. 

May  declare  estate  EXEMPT,  page  84. 

NOTICE  of  motion  must  be  given,  page  83. 

ISSUANCE  OF  LETTERS  NOT  CONDITION  PRECEDENT.  Matter 
of  Edgerton,  35  App.  Div.  125-126,  affirmed,  without  opinion, 
158  N.  Y.  671;  Matter  of  Fitch,  160  N.  Y.  87-91;  Matter  of 
Pullman,  46  App.  Div.  574;  Matter  of  Hubbard,  21  Misc. 
566. 

As  to  cases  arising  prior  to  amendment  by  chap.  399,  Laws 
1892  (now  §  228)  vide  Matter  of  Embury,  154  N.  Y.  746. 

"The  Court  of  Appeals,  in  Matter  of  Fitch,  160  N.  Y.  87-91, 
held  that  where  neither  letters  testamentary  nor  ancillary  letters 
were  applied  for  that  fact  is  unnecessary  to  confer  jurisdiction 
upon  the  surrogate  to  impose  a  tax  upon  the  transfer  of  the 
property  of  a  non-resident  decedent.  It  must  follow,  therefore, 
that  the  issuing  of  letters  testamentary  or  of  administration 
upon  the  estate  of  a  resident  decedent  is  not  necessary  to  give 
the  surrogate  jurisdiction."  Opinion,  dated  April  16,  1913,  of 
state  comptroller,  2  State  Department  Reports,  497-500. 

RESIDENT  DONEE  OF  POWER  OF  APPOINTMENT.  The  surro- 
gate of  the  county  in  which  donee  resided  has  exclusive  juris- 
diction. Matter  of  Seaver,  63  App.  Div.  283. 

May  appoint  an  appraiser  to  ascertain  whether  estate  taxable. 
Matter  of  O'Donohue,  44  App.  Div.  186. 

Under  §  231  the  surrogate  from  the  appraiser's  report  "and 
other  proof"  shall  "determine  the  cash  value  of  all  estates  and 
the  amount  of  tax  to  which  the  same  are  liable."  Matter  of 
Fuller,  62  App.  Div.  428. 

The  words  "Or  COURSE"  in  §  231  construed  to  mean  "that 
the  surrogate  is  to  proceed  without  intervention  of  any  one  when 
he  has  such  report  before  him,  and  they  relate  to  the  practice 
rather  than  to  the  law."  Matter  of  Fuller,  supra. 

NOT  DISCRETIONARY  WITH  SURROGATE  WHETHER  AN  AP- 
PRAISAL SHALL  BE  MADE,  and  mandamus  will  lie  against  him 
if  he  does  not  cause  appraisal  to  be  made  upon  petition  being 
presented  to  him  by  state  comptroller.  Matter  of  Kelsey  v. 
Church,  112  App.  Div.  408. 

NOTICE  OF  DETERMINATION  of  surrogate  should  be  given  as 
provided  in  §  231.  Matter  of  Daly,  34  Misc.  148.  Vide  Notice 
of  Appraisal. 

About  the  time  of  the  probate  of  the  will  cf  decedent  the 
54 


850  SURROGATE 

executor  filed  an  affidavit  showing  the  net  estate  to  be  below 
the  amount  required  for  taxation  purposes,  and  the  surrogate 
thereupon  gave  his  opinion  that  estate  was  not  taxable.  Held, 
that  this  was  not  binding  upon  comptroller,  and  that  he  was 
entitled  to  an  official  appraisal  upon  notice.  Matter  of  Schmidt, 
39  Misc.  77.  Vide  Notice  of  Appraisal. 

NOT  REQUIRED  TO  REMIT  a  proceeding  for  a  rehearing,  but 
may  modify  the  order  assessing  tax.  Matter  of  Willets,  190 
N.  Y.  527;  Matter  of  Havemeyer,  32  Misc.  416-418. 

DECREE  FINAL  unless  appeal  taken  or  decree  vacated.  Vide 
Appeal  and  Vacating  Decree. 

In  the  counties  enumerated  in  §  234  the  surrogate  has  power 
to  recommend  the  appointment  of  TRANSFER  TAX  ASSISTANT 
CLERKS,  and  others  set  forth  in  said  section,  but  comptroller 
cannot  be  compelled  to  act  on  recommendation  of  surrogate. 
Matter  of  Duell  v.  Glynn,  191  N.  Y.  357. 

AN  EXECUTOR  REFUSED  TO  ANSWER  QUESTIONS  regarding 
property  of  decedent  on  ground  that  decedent  was  non-resident, 
and  the  property  inquired  about  was  not  subject  to  tax.  Held, 
that  there  must  be  jurisdiction  to  tax  established  before  surro- 
gate can  punish  for  contempt,  and  that  question  of  residence  of 
decedent  must  first  be  judicially  determined.  Matter  of  Bishop, 
82  App.  Div.  112.'  Vide  Matter  of  Whiting,  69  Misc.  526-527, 
affirmed,  200  N.  Y.  520. 

Where  it  appears  that  surrogate  has  jurisdiction  over  non- 
resident's estate  he  MAY  ISSUE  COMMISSION  under  §  887  of 
Code  of  Civil  Procedure  to  take  testimony  without  state. 
Matter  of  Wallace,  71  App.  Div.  284. 

LAWS  1892,  CHAP.  399,  in  effect  May  1,  1892,  increasing  the 
jurisdiction  of  the  surrogate  in  non-residents'  estates  held  not 
to  be  retroactive.  Matter  of  Embury,  154  N.  Y.  746;  Matter 
of  Pettit,  171  N.  Y.  654. 

ALTHOUGH  ESTATE  DISTRIBUTED  the  surrogate  •  still  has 
jurisdiction  to  fix  tax  even  though  the  property  has  been  taken 
out  of  the  state.  Matter  of  Hubbard,  21  Misc.  566. 

"  THE  DONEE  OF  THE  POWER,  a  non-resident  of  this  State,  hav- 
ing exercised  the  power  in  connection  with  real  estate  situated 
in  this  county,  the  Surrogate's  Court  of  this  county  has  juris- 
diction of  the  proceeding  to  assess  a  tax  upon  the  transfer  of  the 
property  passing  by  virtue  of  the  exercise  of  the  power  of 
appointment."  Matter  of  Lowndes,  60  Misc.  506-507. 


TAXES  851 

SUSPENDING  TAXATION 

Vide  Time  of  Tax. 

TABLES 

Exemptions  under  §  221,  page  40. 

Persons  entitled  to  the  lower  rates  of  subdivision  1  of  §  22  la, 
page  45. 

Rates  of  tax,  pages  48  to  51. 

Prorating  of  tax  in  non-resident  estate,  page  151. 

Method  employed  by  superintendent  of  insurance  in  deter- 
mining values  as  provided  in  the  second  sentence  of  §  231, 
page  581. 

TAXES 

No  deduction  allowed  for  taxes  where  decedent  dies  before 
books  closed  for  correction.  Matter  of  Freund,  143  App.  Div. 
335,  affirmed,  202  N.  Y.  556;  Matter  of  Maresi,  74  App.  Div. 
76-79;  distinguished  in  Matter  of  Liss,  39  Misc.  123-125. 

But  where  "so  far  completed  that  the  name  of  the  person 
named  as  owner  cannot  be  changed  or  altered  by  the  assessment 
officers,"  they  are  proper  deductions.  Matter  of  Hoffman,  42 
Misc.  90-92,  citing  Matter  of  Babcock,  115  N.  Y.  450,  and 
subdivision  2  of  §  2719  of  Code  of  Civil  Procedure. 

NEW  YORK  CITY  personal  taxes  assessed  against  the  testator 
for  the  year  1912  were  allowed  as  a  deduction  from  the  assets 
of  the  estate  of  a  decedent  who  died  November  7,  1911.  Surro- 
gate Cohalan,  Matter  of  Henry  Dormitzer,  N.  Y.  Law  Journal, 
February  6,  1913,  saying:  "The  amount  of  personal  taxes 
assessed  against  the  decedent  was  a  valid  indebtedness  of  his 
estate  at  the  date  of  his  death  and  the  appraiser  erred  in  re- 
fusing to  deduct  the  amount  of  such  taxes  from  the  assets  of  the 
estate." 

IN  ALLEGANY  COUNTY  it  was  held  that  there  should  be 
deduction  for  taxes  where  "the  assessment  was  made  against 
deceased  and  was  binding  upon  him,  although  the  precise 
amount  of  the  tax  had  not  been  ascertained  until  the  warrants 
were  delivered  to  the  collectors."  Matter  of  Brundage,  31 
App.  Div.  348-350,  citing  Matter  of  Babcock,  115  N.  Y.  451, 
and  Rundell  v.  Lakey,  40  N.  Y.  513. 

FEDERAL  INHERITANCE  tax  not  to  be  deducted.  Matter  of 
Gihon,  169  N.  Y.  443. 

FOREIGN  STATE  inheritance  tax  not  to  be  deducted.    Matter 


852  TEMPORARY   ADMINISTRATOR 

of  Kennedy,  20  Misc.  531;  Matter  of  Penfold,  142  N.  Y.  Supp. 
678. 

TEMPORARY  ADMINISTRATOR 

Fees  and  expenses  of,  allowable  as  a  deduction.  Matter  of 
Gihon,  169  N.  Y.  443-445. 

TEMPORARY  ORDER 

Where  tax  shall  be  imposed  at  the  "highest  rate"  pursuant 
to  the  provisions  of  the  sixth  paragraph  of  §  230,  a  temporary 
order  shall  be  entered  by  the  surrogate.  Vide  opinion  of  state 
comptroller  cited  sub  Interest. 

TEMPORARY  PAYMENT 

Vide  Payment  of  Tax. 

TENANCY  IN  COMMON 

Tenancy  in  common  created  where  devise  to  two  or  more 
persons,  in  their  own  right,  unless  expressly  declared  to  be  joint 
tenancy.  Matter  of  Kimberly,  150  N.  Y.  90;  Matter  of  Eld- 
ridge,  29  Misc.  734. 

Vide  Deductions,  supra,  page  658,  as  to  advancements  made 
by  cotenant. 

TENANTS  BY  THE  ENTIRETY 

If  real  estate  is  held  by  husband  and  wife  as  tenants  by  the 
entirety  and  one  dies  there  is  no  tax  as  the  transfer  is  not  within 
the  statute.  There  is  no  reported  decision  in  a  transfer  tax  case, 
but  the  practice  is  not  to  tax.  For  discussion  of  the  taxable 
transfer  vide  supra,  page  33. 

It  is  good  practice  to  set  out  in  Schedule  A1  real  estate  held 
by  tenancy  by  the  entirety,  at  the  same  time  making  the  claim 
for  exemption  and  stating  the  facts  upon  which  claim  is  based. 

Certain  real  estate  owned  by  decedent  and  her  husband  as 
tenants  by  the  entirety,  was  sold  and  conveyed,  and  a  purchase 
money  mortgage  for  $30,000  taken  in  their  joint  names,  and  a 
cash  payment  of  $12,750  of  the  purchase  price  deposited  in  the 
Union  Trust  Company  in  decedent's  name,  solely,  the  husband 
claimed,  for  the  purpose  of  being  re-invested  in  real  estate  to 
be  held  in  the  same  manner  as  that  which  they  had  sold.  Held 
by  Surrogate  Hopkins,  Dutchess  County,  in  Matter  of  Thomp- 
son, 81  Misc.  86,  that  one-half  of  the  cash  and  one-half  of  the 


TESTIMONY 

purchase  money  mortgage  were  taxable  in  the  wife's  estate,  and 
that  the  husband,  "as  survivor,  was  not  entitled  to  the  whole 
proceeds  on  her  death,  without  legal  evidence  of  agreement  or 
gift.  Matter  of  Baum,  121  App.  Div.  496;  Matter  of  Albrecht, 
136  N.  Y.  91." 

Vide  Matter  of  Anna  Quinn,  N.  Y.  Law  Journal,  November 
25,  1911,  opinion  quoted  supra,  page  801,  and  other  cases  cited 
sub  Property  Held  in  Trust  or  Jointly. 

TESTIMONY 

(1)  Appraiser  authorized  to  take          (4)  Objection  should   be   taken. 

testimony.  (5)  Surrogate    may    take    testi- 

(2)  Cannot  assess  tax  upon  suspi-  mony. 

cion.  (6)  §829  of  Code  of  Civil  Pro- 

(3)  Incompetent  evidence  should  cedure. 

be  excluded.  (7)  §837  of  Code. 

Vide  Burden  of  Proof;  Expert;  Gifts;  Laws  of  Another  State 
or  Country;  Ownership  of  Property;  Stock  Transfer  Tax. 

(1)  Appraiser  authorized  to  take  testimony 

The  appraiser  is  authorized  by  the  second  paragraph  of  §  230 
"to  issue  subpcenas  and  to  compel  the  attendance  of  witnesses 
before  him  and  to  take  the  evidence  of  such  witnesses  under 
oath."  McKnight  v.  Glynn,  56  Misc.  35-39,  and  other  cases 
cited  sub  Appraiser. 

The  large  majority  of  transfer  tax  proceedings  are  decided 
upon  affidavit  without  the  taking  of  testimony.  Vide  pages  85 
et  seq. 

(2)  Cannot  assess  tax  upon  suspicion 

"Any  apparent  attempt,  however,  upon  the  part  of  the 
executors  to  evade  the  payment  of  a  just  tax,  however  repre- 
hensible it  may  be,  does  not  authorize  either  the  appraiser  or 
surrogate  to  make  an  assessment  upon  suspicion  or  otherwise 
than  upon  convincing  evidence  of  the  transfer  of  property  for 
which  the  tax  is  imposed  by  the  statute."  Matter  of  Kennedy, 
113  App.  Div.  4-8. 

IN  MATTER  OF  DUDLEY,  N.  Y.  Law  Journal,  March  4,  1913, 
Surrogate  Fowler  remitted  report,  saying:  "As  the  only  evi- 
dence before  the  appraiser  in  regard  to  the  value  of  decedent's 
holdings  of  stock  in  the  Pere  Marquette  Railroad  Company 
shows  that  the  cash  value  of  the  stock  at  the  time  of  decedent's 


854  TESTIMONY 

death  was  $16.25  a  share,  the  appraiser  erred  in  estimating  the 
value  of  such  stock  at  $29.50  per  share." 

(3)  Incompetent  evidence  should  be  excluded 
INDEFINITE  AND  INCOMPETENT  testimony  taken  by  appraiser 

does  not  enable  surrogate  to  pass  upon  the  record,  and  will 
result  in  report  being  remitted.  Matter  of  Froehlich,  N.  Y. 
Law  Journal,  April  30,  1913,  opinion  quoted  sub  Closely  Held 
Stock,  page  623. 

Surrogate  Baker  of  Yates  County  commenting  on  testimony 
taken  in  Matter  of  Jones,  65  Misc.  121-123,  said  it  was  "mostly 
incompetent  evidence  and  would  not  have  been  received  upon  a 
hearing  where  some  attention  was  given  to  the  rules  of  evidence, 
and  it  should  be  carefully  scrutinized." 

FACTS  NOT  CONCLUSIONS.  Report  remitted  in  Matter  of 
Georgiana  C.  Stone,  N.  Y.  Law  Journal,  February  18,  1911, 
Surrogate  Cohalan  saying:  "It  must  appear  positively  by  the 
evidence  of  some  one  possessed  of  actual  knowledge  that  the 
bonds  and  mortgages  on  property  in  the  City  of  New  York 
were  actually  located  in  New  Jersey  at  the  date  of  decedent's 
death.  The  allegation  in  the  affidavit  attached  to  the  ap- 
praiser's report  that  such  bonds  were  habitually  kept  in  dece- 
dent's safe  deposit  box  in  Hoboken,  New  Jersey,  is  insufficient. 
The  appraiser's  report  will  be  remitted  to  him  for  further 
testimony  on  this  point." 

OPINION  of  officer  of  company  as  to  value  of  stock,  the  basis 
of  opinion  not  being  given,  not  sufficient  to  justify  appraiser  in 
adopting  opinion  in  appraisal  of  stock.  Matter  of  Bolton,  35 
Misc.  688. 

As  to  stock  customarily  bought  and  sold  on  the  market, 
vide  page  112.  As  to  inactive  securities,  vide  page  627. 

(4)  Objection  should  be  taken 

Failure  to  take  objection  estops  comptroller  from  urging 
objection  on  appeal.  Morgan  v.  Warner,  162  N.  Y.  612,  supra, 
page  237. 

IN  MATTER  OF  YERKES,  N.  Y.  Law  Journal,  December  5, 
1912,  it  was  held  by  Surrogate  Fowler,  that:  "While  the  State 
Comptroller  was  not  made  a  party  to  the  compromise  agreement 
executed  between  the  executors  and  the  widow  of  decedent  in 
the  matter  under  consideration  he  appeared  before  the  ap- 
praiser and  made  no  objection  to  the  introduction  in  evidence 


TESTIMONY  855 

of  a  copy  of  the  compromise  agreement.  Neither  did  he  object 
to  that  part  of  the  report  of  the  appraiser  where  the  distribution 
to  the  widow  was  made  not  in  accordance  with  the  provisions 
of  the  will  of  the  decedent,  but  in  accordance  with  the  terms  of 
the  compromise  agreement.  Such  a  failure  on  the  part  of  the 
attorney  for  the  State  Comptroller  to  object  to  the  compromise 
agreement  must  be  deemed  an  acquiescence  in  its  validity  so  far 
as  the  imposition  of  the  transfer  tax  is  concerned." 

FAILURE  TO  TAKE  EXCEPTION  WAS  DISREGARDED  by  Appel- 
late Division  in  Matter  of  Brundage,  31  App.  Div.  348  (Fourth 
Department),  the  court  saying  at  page  353:  "We  think  the 
error  of  the  appraiser  in  rejecting  the  evidence  ought  not  to  be 
disregarded,  although  there  was  no  formal  exception  taken  to 
the  exclusion  of  the  evidence.  This  record  comes  to  us  on  an 
appeal  from  all  the  proceedings,  and  not  upon  formal  case  and 
exceptions.  It  is  a  case  where  the  court  can  see  that  the  ruling 
may  have  been  very  prejudicial  to  the  appellant,  and  we  ought 
not,  therefore,  to  say  that  an  exception  is  indispensable  to  a 
review  of  the  errors  committed  during  the  hearing  before  the 
appraiser.  (Do vale  v.  Ackerman,  11  Misc.  Rep.  248,  and  cases 
cited.)" 

(5)  Surrogate  may  take  testimony 

Surrogate  may  take  testimony  upon  appeal  to  him  from  his 
pro  forma  order.  Matter  of  Westurn,  152  N.  Y.  93-104;  Matter 
of  Thompson,  57  App.  Div.  317;  Matter  of  Bentley,  31  Misc. 
656-657.  As  to  powers  of  surrogate  vide  cases  cited  sub  Surro- 
gate. 

(6)  §  829  of  Code  of  Civil  Procedure 

Section  829  of  the  Code  of  Civil  Procedure  provides  that 
"  upon  the  trial  of  an  action  or  the  hearing  upon  the  merits  of 
a  special  proceeding,  a  party  or  a  person  interested  in  the 
event,  *  *  *  shall  not  be  examined  as  a  witness,  in  his 
own  behalf  or  interest,  or  in  behalf  of  the  party  succeeding  to 
his  title  or  interest,  against  the  executor,  administrator  or  sur- 
vivor of  a  deceased  person,  or  the  committee  of  a  lunatic,  or  a 
person  deriving  his  title  or  interest  from,  through  or  under  a 
deceased  person  or  lunatic,  by  assignment  or  otherwise;  con- 
cerning a  personal  transaction  or  communication  between  the 
witness  and  the  deceased  person  or  lunatic,"  with  an  exception 
not  necessary  to  be  here  noted. 


856  TESTIMONY 

IN  MATTER  OF  JAY  GOULD,  19  App.  Div.  352,  the  testator  in 
his  will  said  (156  N.  Y.  423^25):  "My  beloved  son  George  J. 
Gould  having  developed  a  remarkable  business  ability,  and 
having  for  twelve  years  devoted  himself  entirely  to  my  business, 
and  during  the  past  five  years  taken  entire  charge  of  all  my 
difficult  interests,  I  hereby  fix  the  value  of  said  services  at  five 
millions  of  dollars."  The  question  arose  as  to  whether  this  five 
millions  of  dollars  was  subject  to  the  tax.  The  Appellate  Divi- 
sion in  referring  to  the  position  taken  by  the  state  comptroller 
said,  page  354:  "He  insists  that  the  legacy  in  question  was  not 
given  in  payment  of  any  legal  debt,  but  was  a  gift  or  gratuity 
from  decedent,  and  liable  as  such  to  taxation.  The  question 
raised,  therefore,  is  one  of  fact,  and  we  are  to  inquire  whether 
the  appraiser  properly  determined  that  this  legacy  was  given 
in  payment  of  a  debt  owing  by  decedent  at  the  time  of  his 
death.  A  part  of  the  evidence  given  on  this  subject  before  the 
appraiser  was  that  of  the  alleged  creditor,  George  J.  Gould,  as 
to  personal  interviews  between  himself  and  the  decedent,  his 
alleged  debtor,  and  it  is  claimed  this  evidence  was  improperly 
received  under  the  comptroller's  objection,  based  upon  SECTION 
829  OF  THE  CODE  OF  CIVIL  PROCEDURE.  We  do  not  think  this 
objection  was  well  taken. 

"This  was  not  a  proceeding  by  the  witness  against  the  estate 
wherein  he  sought  to  establish  his  claim  against  the  estate. 
It  was  a  proceeding  to  ascertain  the  value  of  property  of  the 
estate  for  the  purpose  of  taxation  under  the  statute.  The  wit- 
ness was,  of  course,  interested  in  the  event  of  this  proceeding. 
He  was  not  only  a  residuary  legatee,  and  interested  as  such  in 
the  amount  of  the  tax  to  be  levied  upon  such  residuary  estate, 
but  he  was  the  legatee  to  whom  this  particular  legacy  was  given, 
and  if  the  legacy  was  taxable  the  tax  would  have  to  be  paid  by 
him  or  from  the  legacy  itself. 

"  We  fail  to  see,  however,  how  it  can  be  said  that  the  witness 
was  examined  against  the  executors  of  the  decedent,  or  any 
person  deriving  title  or  interest  from,  through  or  under  the 
decedent,  by  assignment  or  otherwise.  He  was  not  examined 
as  a  witness  against  the  executors,  but  in  their  favor.  They 
claimed  the  legacy  was  a  debt  and  not  a  gift  or  a  gratuity.  He 
was  not  examined  as  a  witness  against  anyone  deriving  title  or 
interest  from,  through  or  under  the  decedent,  because  the  tax 
was  not  upon  the  deceased's  interest  in  the  property,  nor  was 
it  to  be  paid  from  such  interest.  It  was  a  tax  upon  the  interests 


TESTIMONY  857 

of  the  legatees  under  the  will,  and  was  payable  out  of  their 
respective  interests  as  such  legatees.  The  estate  as  an  estate, 
had  no  interest  whatever  in  the  amount  of  the  tax.  The  lega- 
tees alone  were  the  interested  parties.  (In  re  Hoffman,  143 
N.  Y.  327.)  We  think  the  witness  was  not  incompetent  under 
section  829  of  the  Code  of  Civil  Procedure." 

The  Court  of  Appeals,  156  N.  Y.  423,  held  that  the  transfer  of 
the  five  millions  of  dollars  was  subject  to  the  tax,  saying  at 
page  427:  "If  Jay  Gould  did  owe  his  son  George  $5,000,000  for 
services,  and  we  must  assume  that  he  did,  he  selected  a  method 
of  payment  which  brought  the  transaction  within  the  taxing 
provisions  of  the  statute."  Holding  that  the  transfer  was  sub- 
ject to  a  tax,  even  though  in  payment  of  a  debt,  it  was  not 
necessary  for  the  Court  of  Appeals  to  pass  upon  the  competency 
of  the  testimony  in  question. 

IN  MATTER  OF  BRUNDAGE,  31  App.  Div.  348-353,  Matter  of 
Gould,  supra,  was  quoted  and  followed.  Vide  etiam  Matter  of 
Bentley,  31  Misc.  656. 

IN  MATTER  OF  THOMPSON,  81  Misc.  86-87,  Surrogate  Hop- 
kins says:  "To  accept  the  sole  testimony  of  a  witness  directly 
interested  in  the  result  in  proceedings  of  this  character  would 
absolutely  nullify  the  transfer  tax  law  and  open  the  door  for  the 
prevention  of  the  imposition  of  any  tax  in  all  similar  cases. 
Such  evidence  would  be  inadmissible  in  any  court  against  the 
estate  of  a  deceased  person,  relative  to  any  agreement,  trans- 
action, or  understanding  between  the  witness  and  such  deceased 
person,  affecting  the  disposition  of  the  estate  or  the  interest  of 
the  witness  therein,  and  such  rule  should  be  applied  in  pro- 
ceedings of  this  kind."  Vide  etiam  Matter  of  Sharer,  36  Misc. 
502  (Herkimer  County). 

It  does  not  appear  that  in  Matter  of  Thompson,  supra, 
the  surrogate  had  before  him  the  rulings  in  the  Brundage, 
Gould  and  Bentley  cases,  supra.  It  would  seem  that  his  deci- 
sion is  more  of  an  authority  as  to  the  weight  to  be  given  such 
evidence  than  as  to  the  competency  of  such  evidence. 

In  Matter  of  White,  116  App.  Div.  183-185,  Justice  Houghton 
in  a  dissenting  opinion  says:  "A  legatee  or  distributee  is  not 
prohibited  by  this  section  (829)  from  testifying  to  personal 
transactions  and  communications  had  with  his  testator  or 
intestate  in  a  proceeding  to  appraise  property  under  the  Trans- 
fer Tax  Act.  (Matter  of  Gould,  19  App.  Div.  352;  Matter  of 
Brundage,  31  id.  348.) 


§58  TESTIMONY 

"The  above  authorities  on  this  proposition  do  not  seem  to 
have  been  overruled  or  questioned,  and  they  appear  to  be 
founded  on  just  principles.  *  *  *  Her  (the  witness) 
interest  might  affect  the  weight  of  her  testimony,  but  did  not 
render  her  incompetent,  for  she  was  not  testifying  against  the 
estate  or  the  executors  of  the  will." 

The  prevailing  opinion  dismissed  the  transfer  tax  proceeding 
so  that  the  dicta  just  quoted  was  neither  assented  to  or  dis- 
agreed with  in  the  prevailing  opinion. 

For  discussion  of  §  829  in  cases  not  affecting  transfer  tax  vide 
Matter  of  Hennessey,  157  App.  Div.  136;  Matter  of  Porter, 
60  Misc.  504;  Hoag  v.  Wright,  174  N.  Y.  36-39. 

MATTER  OF  HARTMAN,  N.  Y.  Law  Journal,  October  8,  1913, 
was  a  proceeding  for  the  judicial  settlement  of  the  account  of  an 
executrix.  She  had  paid  certain  claims  to  her  husband  William 
G.  Mulligan,  which  were  objected  to  by  the  widow  of  the 
testator.  Surrogate  Fowler  in  the  course  of  his  opinion  said: 
"In  a  proceeding  of  this  character,  the  accountant  executrix, 
who  has  paid  bills  of  the  kind  objected  to  is  in  law,  held  in- 
competent to  testify  to  a  conversation  between  the  payee  and 
the  deceased,  if  she  seek  to  be  allowed  the  payment  of  such 
bills  (sec.  829,  Code  Civ.  Pro.;  Matter  of  Smith,  153  N.  Y.  124; 
Matter  of  Knibbs,  108  App.  Div.  134).  But  it  has  been  held 
that  the  PARTY  WHOSE  CLAIM  is  PAID  is  competent  to  testify, 
as  he  is  not  a  party  to  the  proceeding  or  interested  in  the  event, 
nor  does  the  executrix  derive  title  through  or  under  such  cred- 
itor (sec.  829,  Code  Civ.  Pro.;  Glennan  v.  Rochester  Trust, 
&c.,  Co.,  136  N.  Y.  Supp.  747;  Matter  of  Fraser,  92  N.  Y. 
239).  I  was  at  some  pains  to  follow  these  precedents  on 
the  hearing,  although  to  my  mind  both  Mr.  and  Mrs.  Mul- 
ligan would  have  been  incompetent  as  witnesses  at  com- 
mon law,  which  seems  to  me  to  afford  the  more  just 
rule. 

"The  Code  and  the  rulings  of  our  courts  thereon  have,  how- 
ever, rendered  Mr.  Mulligan  competent  to  give  evidence  of 
these  transactions  with  the  late  Mr.  Hartmann,  and  these 
rulings  I  obeyed.  But  Mr.  Mulligan's  testimony  is  insufficient 
of  itself.  He  is  virtually  the  claimant  against  the  dead  man's 
estate,  and  the  unsupported  testimony  of  claimants  is  generally 
regarded  as  insufficient  in  such  cases.  (Beckett  v.  Ramsdale, 
L.  R.,  7,  Ch.  D.  177.)" 


TIME    OF   TAX 

(7)  §  837  of  Code 

Vide  last  paragraph  of  digest  of  Matter  of  Lord,  186  N.  Y. 
549,  supra,  page  332. 

TIME  OF  TAX 

(1)  Statutory  provisions.  (4)  Payable  at  death  except  in  cer- 

(2)  Time  of  transfer.  tain  cases. 

(3)  Transfer  under  subdivision  4     (5)  Unascertained  claim.   Interest  in 

of  §  220.  estate  of  another. 

(6)  Suspending  taxation. 
(1)  Statutory  provisions 

The  first  two  sentences  of  §  222  read:  "All  taxes  imposed  by 
this  article  shall  be  due  and  payable  at  the  time  of  the  transfer, 
except  as  herein  otherwise  provided.  Taxes  upon  the  transfer 
of  any  estate,  property  or  interest  therein  limited,  conditioned, 
dependent  or  detenninable  upon  the  happening  of  any  contin- 
gency or  future  event  by  reason  of  which  the  fair  market  value 
thereof  can  not  be  ascertained  at  the  time  of  the  transfer  as 
herein  provided,  shall  accrue  and  become  due  and  payable  when 
the  persons  or  corporations  beneficially  entitled  thereto  shall 
come  into  actual  possession  or  enjoyment  thereof."  Matter  of 
Babcock,  37  Misc.  445,  affirmed,  without  opinion,  81  App.  Div. 
645;  Matter  of  Granfield,  79  Misc.  374-381;  Matter  of  White, 
208  N.  Y.  64-67,  supra,  page  390. 

The  sixth  paragraph  of  §230  provides,  inter  alia:  "When 
property  is  transferred  in  trust  or  otherwise,  and  the  rights, 
interest  or  estates  of  the  transferees  are  dependent  upon  con- 
tingencies or  conditions  whereby  they  may  be  wholly  or  in  part 
created,  defeated,  extended  or  abridged,  a  tax  shall  be  imposed 
upon  said  transfer  at  the  highest  rate  which,  on  the  happening  of 
any  of  the  said  contingencies  or  conditions,  would  be  possible 
under  the  provisions  of  this  article,  and  such  tax  so  imposed  shall 
be  due  and  PAYABLE  FORTHWITH  by  the  executors  or  trustees 
out  of  the  property  transferred,  and  the  surrogate  shall  enter  a 
temporary  order  determining  the  amount  of  said  tax  in  accordance 
with  this  provision."  Matter  of  Vanderbilt,  172  N.  Y.  69,  supra, 
page  268;  Matter  of  Brez,  172  N.  Y.  609,  supra,  page  271;  Mat- 
ter of  Tracy,  179  N.  Y.  501,  supra,  page  292;  Matter  of  Bil- 
lingsley,  1  State  Department  Reports,  569,  supra,  page  725. 

It  is  provided  by  the  fifth  paragraph  of  §  230:  "Where  any 
property  shall,  after  the  passage  of  this  chapter,  be  transferred 
subject  to  any  charge,  estate  or  interest,  determinable  by  the 


£60 

death  of  any  person,  or  at  any  period  ascertainable  only  by 
reference  to  death,  the  increase  accruing  to  any  person  or  cor- 
poration upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable 
under  the  provisions  of  this  article  in  the  same  manner  as  though 
the  person  or  corporation  beneficially  entitled  thereto  had  then 
acquired  such  increase  from  the  person  from  whom  the  title  to 
their  respective  estates  or  interests  is  derived."  Matter  of 
Maresi,  74  App.  Div.  76-78. 

For  discussion  of  the  meaning  and  intendment  of  the  seventh 
paragraph  of  §  230,  vide  Matter  of  Kennedy,  93  App.  Div.  27. 

As  to  the  provisions  of  subd.  6  of  §  220  relative  to  exercise  of 
power  of  appointment,  vide  Matter  of  Howe,  176  N.  Y.  570, 
supra,  page  284,  and  cases  cited  sub  POWER  OF  APPOINTMENT, 
supra,  page  768. 

(2)  Time  of  transfer 

Vide  supra,  page  37,  etiam  cases  cited  sub  Payment  of  Tax, 
supra,  page  757. 

(3)  Transfer  under  subd.  4  of  §  220 

Vide  Matter  of  Webber,  151  App.  Div.  539,  and  cases  cited 
supra,  page  35.  As  to  rate  of  tax  where  there  are  transfers  by 
deed  of  trust  and  by  will  to  the  same  beneficiaries,  vide  Matter  of 
Agnew,  N.  Y.  Law  Journal,  December  13,  1913,  supra,  page  53. 

(4)  Payable  at  death  except  in  certain  cases 

The  general  rule  is  that  the  tax  is  due  and  payable  as  at 
death  of  decedent.  Matter  of  White,  208  N.  Y.  64-S8,  swpra, 
page  390;  Matter  of  Vassar,  127  N.  Y.  1-S,  supra,  page  169. 
As  to  interest  and  discount  vide  INTEREST,  supra,  page  721. 

For  discussion  as  to  trust  and  life  estates  vide  REMAINDERS, 
supra,  page  817,  and  POWER  OF  APPOINTMENT,  supra,  page  768. 

The  fact  that  the  PUBLIC  ADMINISTRATOR  is  in  possession  of 
property  of  intestate  and  that  the  next  of  kin  are  unknown, 
does  not  justify  suspending  taxation.  Matter  of  Lind,  196  N.  Y. 
570,  supra,  page  369. 

(5)  Unascertained  claim 

IN  MATTER  OF  EMILIA  C.  DE  SALA,  N.  Y.  Law  Journal, 
July  20,  1912,  Surrogate  Cohalan  held:  "The  decedent  died  in 
1905.  The  transfer  tax  appraiser  who  was  designated  to  appraise 


TIME    OF   TAX  861 

his  estate  reported  that  owing  to  the  unsettled  conditions  exist- 
ing in  the  Republic  of  Santo  Domingo  he  could  not  determine 
the  value  of  decedent's  interest  in  the  firm  of  Sala  &  Company, 
the  assets  of  the  said  firm  consisting  largely  of  securities  of  the 
Republic  of  Santo  Domingo  and  debts  due  the  firm  from  citizens 
of  that  country.  The  order  entered  upon  the  report  did  not 
make  any  reference  to  the  inability  of  the  appraiser  to  ascertain 
the  value  of  decedent's  interest  in  the  firm  of  Sala  &  Company, 
nor  did  it  refer  in  any  way  to  the  appraiser's  finding  in  regard 
to  said  interest. 

"  The  State  Comptroller  now  asks  that  an  appraiser  be  desig- 
nated to  appraise  the  value  of  decedent's  interest  in  the  said 
firm;  The  attorneys  for  the  executors  contend  that  the  State 
Comptroller  is  not  entitled  to  such  an  order,  because  the 
omission  from  the  order  entered  upon  the  report  of  a  clause  sus- 
pending taxation  upon  the  value  of  such  interest  constituted  a 
determination  that  such  interest  was  not  taxable.  As  the  ap- 
praiser's report  contains  a  finding  that  it  was  impossible  at 
that  time  to  ascertain  the  value  of  decedent's  interest  in  the 
firm  of  Sala  &  Company,  the  omission  from  the  order  of  any 
reference  to  this  finding  did  not  constitute  an  adjudication 
that  the  interest  was  not  subject  to  taxation.  Matter  of  Pear- 
sail,  N.  Y.  Law  Journal,  July  9,  1912. 

"  As  the  circumstances  at  the  time  of  the  appraisal  were  such 
that  the  value  of  decedent's  interest  in  the  firm  of  Sala  &  Com- 
pany could  not  be  ascertained  by  the  appraiser,  the  Surrogate 
could,  at  any  time  subsequent  to  the  filing  of  the  appraiser's 
report,  designate  an  appraiser  for  the  purpose  of  appraising  the 
value  of  such  interest.  Matter  of  Crerar,  56  App.  Div.  479. 
The  petition  of  the  State  Comptroller,  however,  does  not  allege 
that  since  the  filing  of  the  appraiser's  report  he  has  obtained 
such  knowledge  or  information  as  would  enable  an  appraiser 
to  estimate  the  value  of  decedent's  interest  in  the  firm  of  Sala 
&  Company,  or  that  such  information  is  in  the  possession  of 
parties  whose  testimony  could  be  procured  by  the  appraiser. 
In  other  words,  the  petition  of  the  State  Comptroller  does  not 
allege  the  discovery  of  any  facts  since  the  filing  of  the  appraiser's 
report  which,  if  presented  to  the  appraiser,  would  enable  him 
to  appraise  the  value  of  decedent's  interest  in  the  said  firm.  In 
the  absence  of  such  allegations  it  would  be  an  ineffective  and 
useless  proceeding  to  designate  an  appraiser  for  the  purpose  of 
appraising  property  the  value  of  which  was  unascertainable  by 


862  TIME    OF   TAX 

the  appraiser  previously  designated.  The  application  of  the 
State  Comptroller  will  therefore  be  denied,  but  with  leave  to 
renew  upon  papers  containing  allegations  as  herein  indicated." 

UNCERTAIN  INTEREST  IN  ESTATE  OF  ANOTHER.  In  Matter 
of  Sterry,  N.  Y.  Law  Journal,  April  30,  1912,  it  was  held  that 
as  the  value  of  the  interest  of  decedent  in  the  estate  of  his  father 
"could  not  be  determined  until  the  termination  of  the  legal 
proceedings  instituted  for  that  purpose,  the  transfer  tax  did  not 
accrue  January  4,  1911,  the  date  when  the  value  of  this  interest 
was  ascertained  and  paid."  Vide  etiam  MATTER  OF  ZEFITA, 
167  N.  Y.  280-283;  MATTER  OF  CLINCH,  180  N.  Y.  300-303, 
supra,  page  301. 

In  MATTER  OF  FREDERICK  A.  GANS,  N.  Y.  Law  Journal, 
April  13,  1912,  Surrogate  Fowler  held:  "This  is  an  application 
to  amend  the  order  fixing  tax  heretofore  entered  in  this  estate 
by  including  certain  assets  discovered  since  the  entry  of  the 
original  order.  The  decedent,  who  was  a  resident  of  this  State, 
died  in  1890.  In  1911  the  administrator,  c.  t.  a.,  of  his  estate 
received  from  the  executors  of  his  father's  estate  the  sum 
of  $2,456.07.  Decedent's  father  was  a  resident  of  Switzerland. 
The  administrator  also  received  the  sum  of  $1,788.40  from  an 
insurance  company,  this  amount  representing  decedent's  in- 
terest hi  a  certain  policy  of  insurance  which  had  been  assigned 
to  his  father.  The  administrator  admits  that  the  latter  sum  is 
taxable,  but  contends  that  the  amount  to  which  the  decedent 
was  entitled  as  a  residuary  legatee  under  the  will  of  his  father 
is  not  taxable. 

"  The  interest  of  decedent  in  his  father's  estate  could  not  be 
taxed  at  the  time  of  decedent's  death  because  its  value  was  not 
then  ascertainable,  but  it  became  taxable  as  soon  as  its  value 
could  be  definitely  determined.  Matter  of  Swift,  137  N.  Y. 
77;  Matter  of  Clinch,  180  N.  Y.  300.  The  order  fixing  tax  will 
be  amended  by  including  the  amounts  above  mentioned  hi  the 
taxable  assets  of  decedent's  estate.  Settle  order  on  notice." 

INTEREST  OF  BENEFICIARY  IN  ESTATE  IN  LITIGATION,  an 
appeal  having  been  taken  from  judgment  of  Supreme  Court 
determining  beneficiary's  interest.  Matter  of  Lansing,  31 
Misc.  148-156.  Etiam  Matter  of  Newcomb,  35  Misc. 
589. 

As  to  when  interest  of  decedent  in  estate  of  another  decedent 
taxable  presently.  Vide  Matter  of  Huber,  86  App.  Div.  458. 

Vide  etiam  SCHEDULE  A6,  supra,  page  121. 


TITLE    OF    PROCEEDING  863 

(6)  Suspending  taxation 

Report  of  appraiser  and  order  of  taxation  should  also  suspend 
taxation  in  cases  of 

ASSET  IN  LITIGATION,  Matter  of  Westurn,  152  N.  Y.  93-103, 
supra,  page  212;  Matter  of  Skinner,  106  App.  Div.  217. 

CLAIMS  FOR  DEDUCTIONS  of  doubtful  and  uncertain  claims 
against  estate.  Matter  of  Morgan,  36  Misc.  753;  Matter  of 
Rice,  56  App.  Div.  253;  Matter  of  Dimon,  82  App.  Div.  107. 

Vide  etiam  Matter  of  Burgess,  204  N.  Y.  265,  supra,  page  380, 
and  cases  cited  sub  POWER  OF  APPOINTMENT,  supra,  page  768, 
and  Matter  of  Granfield,  79  Misc.  374-381,  and  cases  cited  sub 
REMAINDERS. 

TITLE  OF  PROCEEDING 

Vide  supra,  page  74. 

Surrogate  Beckett  in  MATTER  OF  LOWNDES,  60  Misc.  506 
(1908),  said:  "The  proceeding  should  be  amended  by  entitling 
it  'In  the  Matter  of  the  Transfer  Tax  upon  the  Trust  Created 
by  the  Will  of  Gertrude  L.  Lowndes,  Deceased,  for  the  Benefit 
of  Annie  L.  Chase  and  Her  Appointees  or  Heirs.'"  The  pro- 
ceeding was  brought  to  tax  transfer  by  will  of  Annie  L.  Chase  of 
property  over  which  she  had  power  of  appointment  given  her 
by  will  of  Gertrude  L.  Lowndes. 

IN  MATTER  OF  CATHARINE  G.  LEEDS,  N.  Y.  Law  Journal, 
April  23,  1913,  Surrogate  Fowler  apparently  modified  the  prac- 
tice as  laid  by  Surrogate  Beckett  in  the  Lowndes  case,  supra. 
In  his  opinion  he  said:  "This  is  an  application  to  exempt  a  cer- 
tain trust  fund  from  taxation.  The  application  is  entitled  '  In 
the  matter  of  the  transfer  tax  of  the  trust  fund  held  for  the 
benefit  of  Catharine  G.  Leeds,  deceased,  under  the  will  of  Roe 
Lockwood,  deceased.' 

"  Roe  Lockwood  died  in  1870  and  was  survived  by  his  widow, 
Julia  G.  Lockwood;  his  four  daughters,  Catharine  G.  Leeds, 
Elizabeth  R.  Griffin,  Julia  Leeds  and  Louisa  M.  Seward,  and 
his  son,  George  R.  Lockwood.  Julia  Leeds  died  during  the  life- 
time of  her  mother  without  leaving  issue.  The  will  of  Roe 
Lockwood  provided  that  his  residuary  estate  should  vest  in 
trustees,  one-third  of  the  income  to  be  paid  to  his  widow  during 
her  life  and  the  remaining  two-thirds  to  be  paid  to  his  children. 
It  further  provided  that  upon  the  death  of  the  widow  one-fourth 
of  the  residuary  estate  was  to  be  given  absolutely  to  his  son, 
George  R.  Lockwood,  if  he  were  then  living,  but  that  if  he  had 


864  TITLE    OF    PROCEEDING 

died  before  his  mother,  then  each  of  the  parts  into  which  he 
directed  his  estate  to  be  divided  should  be  held  in  trust  for  his 
daughters,  the  income  from  one  part  to  be  paid  to  each  of 
them  during  their  respective  lives,  and  upon  the  death  of  each 
daughter  the  corpus  of  her  share  of  the  trust  fund  to  be  paid  to 
her  heirs,  executors,  administrators  and  assigns.  George  R. 
Lockwood  survived  his  mother,  and  as  the  will  contained  no 
provision  for  the  distribution  of  the  estate  in  the  event  of  his 
surviving  the  life  tenant,  the  children  of  Roe  Lockwood  entered 
into  an  agreement  by  which  the  residuary  estate  was  conveyed 
to  a  trustee,  with  directions  that  the  income  from  one-quarter 
thereof  should  be  paid  to  each  of  the  children  during  their 
respective  lives,  and  upon  the  death  of  either  of  them  his  or  her 
share  of  the  corpus  of  the  trust  fund  to  be  paid  to  his  or  her 
heirs,  executors,  administrators  and  assigns.  This  trust  agree- 
ment was  executed  on  the  13th  of  January,  1896.  Catharine  G. 
Leeds,  one  of  the  daughters  of  Roe  Lockwood,  died  on  the  9th 
of  February,  1913.  In  the  proceeding  under  consideration  the 
attorney  representing  the  heirs  of  Catharine  G.  Leeds,  deceased, 
contends  that  the  property  constituting  the  trust  fund  passed  to 
the  heirs  of  Catharine  G.  Leeds  by  virtue  of  the  provisions  of 
the  will  of  Roe  Lockwood  and  not  under  the  trust  agreement 
made  between  the  legatees  named  in  his  will  and  that  it  is 
therefore  exempt  from  taxation. 

"The  State  Comptroller  contends  that  the  property  passed 
by  virtue  of  the  trust  agreement  entered  into  between  the 
legatees  mentioned  in  the  will  of  Roe  Lockwood,  and  as  this 
agreement  was  executed  in  1896  such  transfer  is  subject  to  the 
provisions  of  the  Transfer  Tax  Law  in  force  at  that  time.  THE 
STATE  COMPTROLLER  ALSO  CONTENDS  that  as  a  proceeding  is  now 
pending  before  a  transfer  tax  appraiser  for  the  purpose  of  deter- 
mining the  transfer  tax  upon  the  estate  of  Catharine  G.  Leeds, 
deceased,  this  application  should  be  dismissed  and  that  the 
appraiser  should  inquire  into  the  taxability  of  all  the  property 
alleged  to  belong  to  Catharine  G.  Leeds  at  the  time  of  her  death 
and  which  was  transferred  either  by  her  will  or  by  virtue  of  any 
deed  of  trust  executed  by  her. 

"If  the  property  passed  to  the  heirs  of  Catharine  G.  Leeds  by 
virtue  of  the  provisions  of  the  will  of  Roe  Lockwood,  its  transfer 
is  not  subject  to  a  transfer  tax,  as  he  died  prior  to  the  enactment 
of  our  transfer  tax  statute.  The  title  of  the  proceeding  therefore 
should  not  include  the  name  of  Roe  Lockwood,  as  no  question 


TITLE    OF   PROCEEDING  865 

could  arise  as  to  the  taxability  of  the  property  if  it  were  con-, 
ceded  that  it  belonged  to  Roe  Lockwood  and  was  transferred 
under  his  will.  If,  on  the  other  hand,  the  trust  agreement  ex- 
ecuted by  the  legatees  mentioned  in  the  will  of  Roe  Lockwood  is 
the  source  from  which  the  heirs  of  Catharine  G.  Leeds  obtained 
their  title  to  her  share  of  the  trust  fund,  then  the  transfer  of 
that  property  would  be  subject  to  a  tax  in  accordance  with  the 
provisions  of  the  Transfer  Tax  Law  in  existence  at  the  date  of 
the  execution  of  the  trust  deed.  But  it  would  be  taxable  as  part 
of  the  estate  of  Catharine  G.  Leeds,  not  as  part  of  the  estate  of 
Roe  Lockwood. 

"While  technically  it  may  not  constitute  a  part  of  the  estate 
of  Catharine  G.  Leeds  at  the  time  of  her  death,  the  word  estate 
in  the  title  of  the  transfer  tax  proceeding  is  used  in  a  general 
sense  and  comprehends  all  property  passing  to  beneficiaries  or 
legatees  either  under  the  will  of  Catharine  G.  Leeds  or  by  virtue 
of  any  deed  of  trust  executed  by  her. 

"THE    ORDERLY    AND    ECONOMICAL    ADMINISTRATION    of    the 

transfer  tax  statute  requires  that  all  questions  arising  in  con- 
nection with  the  taxability  of  the  assets  of  an  estate  should  be 
determined  in  one  proceeding,  and,  where  an  appraiser  has  been 
designated,  all  the  evidence  tending  to  sustain  the  contentions 
of  the  parties  should  be  submitted  to  him  so  that  his  report  may 
contain  a  complete  record  of  the  proceeding.  Such  is  the  prac- 
tice of  this  court.  Therefore  the  taxability  of  the  interest  of 
Catharine  G.  Leeds  in  the  corpus  of  the  trust  fund  which  passed 
upon  her  death  to  her  heirs  should  be  determined  in  the  proceed- 
ing now  pending  before  the  appraiser  for  the  purpose  of  apprais- 
ing the  assets  of  her  estate  under  the  provisions  of  the  Transfer 
Tax  Law.  The  application  for  exemption  is  therefore  denied, 
but  without  prejudice  to  the  right  of  the  heirs  and  legatees  of 
Catharine  G.  Leeds  to  raise  this  question  before  the  appraiser 
in  the  proceeding  now  pending  before  him  to  determine  the  tax 
upon  the  estate  of  Catharine  G.  Leeds,  deceased." 

THE  PRESENT  PRACTICE  in  New  York  County  is  to  include  in 
one  proceeding  the  appraisal  of  the  assets  of  the  decedent,  and 
also  all  property  passing  under  an  exercise  of  a  power  of  ap- 
pointment by  decedent.  Subdivision  6  of  section  220. 

IN  MATTER  OF  MARY  C.  TOMPKINS,  N.  Y.  Law  Journal, 
August  11,  1913,  Surrogate  Cohalan  held:  "As  the  power  of 
appointment  was  exercised  by  William  H.  Tompkins,  the  prop- 
erty transferred  by  virtue  of  the  exercise  of  such  power  is  tax^ 
55 


866  TOMBSTONE 

able  as  part  of  his  estate  (subdiv.  6,  sec.  220,  Tax  Law;  Matter 
of  Leeds,  N.  Y.  Law  Journal,  April  23,  1913)." 

TOMBSTONE 

Reasonable  amount  expended  for  tombstone  will  be  allowed 
as  a  deduction.  Matter  of  Edgerton,  35  App.  Div.  125-131, 
affirmed,  without  opinion,  158  N.  Y.  671 ;  Matter  of  Maverick, 
135  App-  Div.  44,  affirmed,  without  opinion,  198  N.  Y.  618. 

It  is  the  practice  to  require  an  affirmative  statement  that 
the  tombstone  has  either  been  paid  for  or  contracted  for. 
The  claim  for  deduction  should  be  made  under  Schedule  B1, 
supra,  page  124. 

TRANSFER 

For  discussion  of  the  taxable  transfer  vide  page  33. 

TRANSFER  OF  SECURITIES 

Section  227  provides  that  the  consent  of  the  state  comptroller 
should  be  obtained  before  the  assignment,  transfer  or  delivery  of 
securities,  deposits  or  other  assets,  under  the  terms  of  said 
section  227. 

Application  for  consent  to  transfer  securities,  page  69. 

Partnership  assets,  page  753. 

Practice  on  opening  of  safe  deposit  box,  page  57. 

Ruling  of  comptroller,  page  65. 

Separate  consents  issued,  page  70. 

Waiver  for  opening  safe  deposit  box,  page  60  and  page  70. 

Vide  opinion  in  People  v.  Mercantile  Safe  Deposit  Company 
quoted  supra,  page  837. 

Non-resident  estates 

IN  DUNHAM  v.  CITY  TRUST  COMPANY  of  New  York,  115 
App.  Div.  584,  affirmed,  without  opinion,  193  N.  Y.  643,  it 
was  held  that  in  a  non-resident  estate  where  the  transfer  of 
stock  was  not  taxable  it  was  not  necessary  to  obtain  consent 
of  state  comptroller  under  §  227.  The  suit  arose  upon  a  claim 
for  damages  made  against  the  transfer  agent  for  failure  to 
transfer  the  stock,  the  transfer  agent  delaying  the  transfer  until 
it  should  receive  the  consent  of  the  state  comptroller.  For 
facts  of  case  and  opinion  vide  page  356. 

As  to  practice  in  non-resident  estate  vide  page  135. 


TRUST   DEED  867 

TREATY 

The  tax  "is  not  a  detraction  tax,  but  a  succession  tax."  The 
alien  "is  treated  precisely  the  same  as  our  own  citizens  are 
treated,  receiving  precisely  what  they  receive.  He  certainly 
ought  not  to  be  entitled  to  receive  more  than  they  do.  All  that 
is  granted  to  him  by  the  treaty  is  that  the  property  to  which  he 
succeeds  shall  not  be  taxed  when  he  comes  to  take  the  property 
or  its  proceeds  out  of  the  State."  Matter  of  Strobel,  5  App. 
Div.  621;  the  opinion  of  Surrogate  Arnold,  which  the  Appellate 
Division  affirms,  is  reported  in  39  N.  Y.  Supp.  169.  The  treaty 
involved  hi  this  case  was  the  1844  treaty  with  Wurttemberg. 

TRIFLING  MISTAKES 

Will  be  disregarded  by  Appellate  Court.  Matter  of  Manning, 
169  N.  Y.  449-451. 

TRUST  DEED 

(1)  Definition.  (6)  Property  without  state  when 

(2)  Taxable    when    income    re-  trust    deed    executed    not 

served  to  grantor.  taxable     although     within 

(3)  Masury  and  Bostwick  cases  state   at   grantor's   death. 

distinguished.  (7)  Remainder  not  taxable  where 

(4)  The  Schermerhorn  case.  trust  deed  executed  prior  to 

(5)  The  law  in  existence  at  the  enactment  of  statute. 

time  deed  of  trust  executed 
governs. 

(1)  Definition 

For  discussion  of  definition  of  transfer  taxable  under  provision 
of  subdivision  4  of  §  220  vide  page  35.  For  transfers,  other 
than  by  trust  deed,  coming  within  the  purview  of  said  subdivi- 
sion vide  Contemplation  of  Death  and  Gift. 

(2)  Taxable  when  income  reserved  to  grantor 

In  MATTER  of  KEENEY,  194  N.  Y.  281,  sustained  in  222 
U.  S.  525,  sub  nom.  Keeney  v.  New  York,  Chief  Justice  Cullen 
in  holding  that  transfer  was  taxable  said,  page  286:  "A  not 
wholly  unnatural  desire  exists  among  owners  of  property  to 
avoid  the  imposition  of  inheritance  taxes  upon  the  estates  they 
may  leave,  so  that  such  estates  may  pass  to  the  objects  of  their 
bounty  unimpaired. 

"!T  is  a  MATTER  OF  COMMON  KNOWLEDGE  that  for  this 
purpose  trusts  or  other  conveyances  are  made  whereby  the 


868  TRUST  DEED 

grantor  reserves  to  himself  the  beneficial  enjoyment  of  his 
estate  during  life.  Were  it  not  for  the  provision  of  the  statute 
which  is  challenged,  it  is  clear  that  in  many  cases  the  estate  on 
the  death  of  the  grantor  would  pass  free  from  tax  to  the  same 
persons  who  would  take  it  had  the  grantor  made  a  will  or  died 
intestate." 

For  other  Court  of  Appeals  cases  holding  that  transfer  by 
trust  deed  is  taxable  where  grantor  reserved  to  himself  an  in- 
terest in  the  property  vide  the  decisions,  arranged  chronologic- 
ally, supra,  page  216,  in  Matter  of  Green,  153  N.  Y.  223;  Matter 
of  Masury,  159  id.  532;  Matter  of  Bostwick,  160  id.  489;  Matter 
of  Cruger,  166  id.  602;  Matter  of  Patterson,  204  id.  677;  etiam, 
Matter  of  Ogsbury,  7  App.  Div.  70;  Matter  of  Webber,  151  id. 
539;  Matter  of  Skinner,  45  Misc.  559,  modified  on  other  points 
in  106  App.  Div.  217. 

(3)  Masury  and  Bostwick  cases  distinguished 

The  principles  of  the  cases  of  Matter  of  Masury  and  Matter 
of  Bostwick  applied  by  Surrogate  Fowler,  in  Matter  of  Smith 
Ely,  N.  Y.  Law  Journal,  March  6,  1912,  the  surrogate  saying: 
"  This  is  an  application  by  the  trustee  of  a  trust  fund  to  have  the 
corpus  of  the  trust  fund  declared  exempt  from  taxation  under 
the  Transfer  Tax  Law. 

"  The  decedent,  who  was  a  resident  of  New  York,  died  on  the 
1st  of  July,  1911.  On  the  17th  of  October,  1904,  he  executed  a 
trust  deed  by  which  he  granted  and  transferred  to  the  United 
States  Trust  Company  of  New  York,  as  trustee,  100  shares  of 
the  preferred  stock  of  the  American  Chicle  Company,  the  income 
therefrom  to  be  applied  to  the  use  of  Minnie  E.  Leo  during  her 
life,  and  upon  her  death  the  said  income  to  be  applied  to  the 
use  of  her  daughter,  Essie  B.  Leo,  during  her  life,  and  upon  the 
death  of  the  survivor  the  corpus  of  the  trust  fund  to  be  trans- 
ferred and  delivered  to  the  issue  of  Essie  B.  Leo  her  surviving. 
The  trust  deed  further  provided  that  the  grantor  could  at  any 
time  during  his  lifetime,  by  a  writing  filed  with  the  trustee, 
revoke,  annul  or  amend  the  trust  and  receive  back  as  his  abso- 
lute property  the  said  shares  of  stock  or  the  investments  or 
property  constituting  the  trust  fund.  The  decedent  did  not 
exercise  the  power  reserved  to  him  to  amend,  annul  or  revoke 
the  said  deed  or  trust. 

"In  the  Matter  of  Masury  (28  App.  Div.  580,  aff  d,  without 
opinion,  159  N.  Y.  532)  one  of  the  deeds  of  trust  executed  by  the 


TRUST  DEED  869 

decedent  provided  that  the  income  be  paid  to  the  guardian  of 
the  donor's  grandson  during  the  minority  of  the  grandson,  and 
that  the  corpus  of  the  trust  fund  should  be  paid  to  the  grandson 
in  1904.  The  deed  also  contained  a  clause  authorizing  the 
grantor  to  revoke  or  annul  the  same  during  his  lifetime.  The 
court  held  that  the  property  granted  and  transferred  by  the 
deed  of  trust  was  not  taxable  under  the  provisions  of  the  Trans- 
fer Tax  Law.  In  the  Matter  of  Bostwick  (160  N.  Y.  489)  the 
decedent  executed  certain  deeds  of  trust  in  which  he  reserved  to 
himself  during  his  lifetime  the  power  to  alter  or  amend  the 
deeds  of  trust,  to  withdraw  any  portion  of  the  trust  property  or 
to  exchange  any  portion  of  the  securities  constituting  the  trust 
fund.  The  court  said  that  it  was  quite  clear  from  the  terms  of 
the  trust  instrument  that  the  donor  retained  such  a  control  over 
the  trusts  as  to  make  evident  an  intention  on  his  part  that  the 
beneficial  enjoyment  of  the  property  was  not  to  take  effect  until 
after  his  death.  The  court  further  said  that  in  the  Matter  of 
Masury  the  limit  was  reached  beyond  which  the  courts  could 
not  go  without  emasculating  the  provisions  of  the  transfer  tax 
statute. 

"  In  the  matter  under  consideration  there  is  reserved  to  the 
donor  a  certain  comprehensive  power  not  reserved  in  the  deed 
of  trust  in  the  Masury  case,  namely,  the  power  to  amend  the 
deed  of  trust.  This  power  to  amend  must  necessarily  embrace 
within  its  signification  the  power  to  withdraw  any  portion  of  the 
trust  property  or  to  exchange  the  securities  mentioned  in  the 
deed  of  trust  for  other  securities;  the  power  to  change  the 
beneficiaries  of  the  trust  fund,  or  the  time  or  the  manner  in 
which  the  income  or  corpus  of  the  trust  fund  should  be  dis- 
tributed. These  additional  powers  reserved  by  the  grantor 
over  the  trust  fund  appear  to  bring  this  matter  within  the  deci- 
sion in  the  Matter  of  Bostwick  (supra}.  The  application  to 
declare  exempt  the  property  constituting  the  corpus  of  the  trust 
fund  should  therefore  be  denied." 

(4)  The  Schermerhorn  case 

IN  MATTER  OF  WILLIAM  C.  SCHERMERHORN,  N.  Y.  Law 
Journal,  June  26,  1913,  Surrogate  Fowler  held:  "This  is  an 
application  to  exempt  from  taxation  the  corpus  of  a  trust  fund 
passing  by  virtue  of  a  deed  of  trust  executed  by  the  decedent. 

"  The  deed  was  executed  in  1902.  The  decedent  was  at  that 
time  a  resident  of  Rhode  Island,  but  the  property  transferred 


870  TRUST  DEED 

by  the  deed  of  trust  consisted  of  bonds  located  in  this  state. 
The  deed  provided  that  the  income  from  the  trust  fund  be  paid 
to  William  B.  Schermerhorn  during  his  life,  and  upon  his  death 
that  the  corpus  be  paid  to  the  grantor,  or  in  the  event  of  the 
death  of  the  grantor  prior  to  the  death  of  the  cestui  que  trust  the 
corpus  to  be  paid  to  the  grantor's  next  prior  of  kin  in  the  pro- 
portion prescribed  by  the  intestate  laws  of  the  State  of  New 
York.  The  grantor  reserved  to  himself  the  right  to  alter  or 
modify  the  deed  of  trust  or  to  revoke  and  terminate  it. 

He  died  in  1903  without  modifying  or  revoking  it.  The 
cestui  que  trust  died  in  December,  1911,  and  the  corpus  was  then 
distributed  among  the  grantor's  next  of  kin.  They  contend  that 
it  is  not  subject  to  a  transfer  tax.  The  transfer  tax  statute  in 
force  at  the  time  the  deed  of  trust  was  executed  provided  that 
a  tax  should  be  imposed  upon  the  transfer  of  property  effected 
by  deed  or  gift  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  the  death  of  the  grantor.  The  corpus  of  the 
trust  fund  created  by  the  deed  of  trust  executed  by  the  grantor 
could  not  take  effect  in  the  possession  or  enjoyment  of  the 
grantor's  next  of  kin  until  after  his  death,  because  the  deed 
provided  that  in  the  event  of  the  death  of  the  cestui  que  trust 
during  the  lifetime  of  the  grantor  the  trust  should  terminate  and 
the  corpus  of  the  trust  fund  should  be  paid  to  the  grantor. 
Therefore  the  right  of  the  next  of  kin  to  the  property  trans- 
ferred by  the  deed  of  trust  did  not  become  absolute  until  the 
death  of  the  grantor. 

"  The  reservation  of  a  power  of  revocation  or  resettlement  to 
new  uses  by  a  settlor  of  an  estate  is  always  his  property,  and  in 
some  cases  may  amount  to  a  fee  simple  in  the  settlor.  This  is 
well  understood  by  property  lawyers. 

"  In  this  matter  if  the  grantor  had  made  an  absolute  gift  of  the 
property  and  divested  himself  of  all  right  of  ownership  in  or 
dominion  over  it,  its  transfer  would  not  be  subject  to  a  tax, 
but  the  fact  of  his  having  reserved  to  himself  the  right  to  modify 
or  amend  the  deed  of  trust,  or  to  revoke  or  terminate  it,  shows 
that  he  did  not  make  an  absolute  gift  of  the  property,  and  that 
he  could  at  any  time  during  his  life  have  revoked  the  gift  and 
recovered  possession  of  the  property.  Until  his  death,  there- 
fore, there  was  no  completed  gift  to  the  remaindermen;  and  as 
the  transfer  to  the  next  of  kin  could  not  take  effect  in  possession 
or  enjoyment  until  after  the  death  of  the  grantor,  the  property 
so  transferred  is  subject  to  a  tax  (Matter  of  Cruger,  54  App. 


TRUST  DEED  871 

Div.  405,  aff'd  166  N.  Y.  602;  Matter  of  Green,  153  N.  Y.  223; 
Matter  of  Bostwick,  160  N.  Y.  489).  Application  for  exemption 
denied." 

(6)  The  law  in  existence  at  the  time  deed  of  trust  was  executed 
governs 

Vide  Matter  of  Keeney,  194  N.  Y.  281-287,  etiam  opinion  in 
same  case  sub  nom.  Keeney  v.  New  York,  222  U.  S.  525-530, 
supra,  page  362.  Vide  etiam  Matter  of  Webber,  151  App. 
Div.  539-540;  Matter  of  Agnew,  N.  Y.  Law  Journal,  Decem- 
ber 13,  1913,  supra,  page  53. 

IN  MATTER  OF  W.  WALLACE  ATTERBURY,  N.  Y.  Law  Journal, 
March  25,  1913,  Surrogate  Cohalan  said:  "This  appeal  is  taken 
by  the  State  Comptroller  from  the  order  assessing  a  tax  upon 
the  decedent's  estate.  The  decedent  died  on  the  6th  day  of 
August,  1911.  On  the  9th  day  of  January,  1904,  he  executed 
two  deeds  of  trust,  by  which  he  transferred  certain  personal 
property  to  trustees,  the  income  from  such  property  to  be 
paid  to  him  during  his  life,  and  upon  his  death  the  principal 
to  be  paid  to  certain  persons  and  corporations  mentioned  in  the 
deeds. 

"The  appraiser  reported  that  the  taxation  of  the  transfer  of 
this  property  was  governed  by  chapter  732  of  the  Laws  of  1911, 
the  transfer  tax  statute  in  force  at  the  date  of  decedent's  death. 
The  State  Comptroller  contends  that  the  property  was  trans- 
ferred when  the  trust  deeds  were  executed  by  the  decedent,  and 
that  its  taxation  therefore  is  governed  by  the  statute  in  existence 
at  that  time.  If  the  contention  of  the  State  Comptroller  is 
correct,  that  part  of  the  corpus  of  the  trust  fund  which  was 
transferred  to  certain  foreign  religious  corporations  would 
not  be  exempt  from  taxation,  while  the  other  donees  would  not 
be  entitled  to  the  exemption  of  $1,000  provided  by  chapter  732 
of  the  Laws  of  1911.  The  deeds  of  trust  were  irrevocable.  The 
only  restriction  upon  the  power  of  the  trustees  was  a  provision 
in  the  deeds  by  which  the  trust  property  could  not  be  sold  with- 
out the  consent  of  the  donor.  In  every  other  respect  the  trustees 
exercised  absolute  control  over  the  property. 

"The  transfer  tax  statute  provides  that  a  tax  shall  be  im- 
posed upon  the  transfer  of  property  by  deed  or  gift  given  in 
contemplation  of  death,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  death.  The  tax  is  imposed  upon  the 
transfer  of  the  property,  and  the  only  question  to  be  determined 


872  TRUST  DEED 

in  this  matter  is,  Did  the  transfer  ol  property  take  effect  at  the 
time  of  the  execution  of  the  deeds  of  trust,  or  was  such  transfer 
deferred  until  the  death  of  the  decedent?  The  grantor  parted 
with  his  title  to  the  property  at  the  time  the  deeds  of  trust  were 
executed  and  it  became  vested  in  the  trustees.  Upon  the 
execution  of  the  deeds  the  donees  took  a  vested  remainder  in 
the  property  subject  to  the  life  estate  of  the  donor.  Their 
interests  could  neither  be  enlarged  nor  diminished  by  the  donor 
after  the  deeds  had  been  executed.  Therefore  their  right  to  the 
property  accrued  upon  the  execution  of  the  deeds  of  trust.  It 
was  only  their  right  to  possession  that  was  deferred  until  the 
death  of  the  grantor. 

"As  the  tax  is  imposed  upon  the  transfer  of  the  property,  or 
the  right  to  succeed  to  the  property,  the  law  in  existence  at  the 
time  the  transfer  takes  place  or  the  right  accrues  is  the  law 
which  governs  the  taxability  of  the  transfer.  Therefore  the  law 
in  existence  at  the  time  the  deeds  of  trust  were  executed  is  the 
law  which  governs  the  taxability  of  the  property  transferred  by 
virtue  of  those  deeds  (Matter  of  Webber,  151  App.  Div.  539; 
Matter  of  Haight,  152  App.  Div.  228).  In  the  Matter  of 
Green  (153  N.  Y.  223),  relied  upon  by  the  respondent,  the  court 
decided  that  the  property  transferred  by  a  deed  of  trust  was  not 
a  gift  inter  vivos,  but  was  a  gift  intended  to  take  effect  in  posses- 
sion or  enjoyment  at  or  after  death,  and  therefore  taxable  under 
the  provisions  of  the  transfer  tax  statute.  The  question  raised 
by  the  present  appeal  was  not  before  the  court  in  the  Matter  of 
Green  and  that  case  therefore  is  not  controlling  upon  this 
point. 

"As  the  transfer  of  the  property  mentioned  in  the  deeds 
of  trust  was  governed  by  the  Transfer  Tax  Law  in  force  at  the 
date  of  the  execution  of  the  deeds,  the  property  transferred  to 
the  foreign  religious  corporations  is  subject  to  a  tax  (Matter  of 
Balleis,  144  N.  Y.  132),  and  the  other  donees  are  not  entitled 
to  the  exemption  prescribed  by  chapter  732  of  the  Laws  of  1911. 
The  order  fixing  tax  will  be  reversed  and  the  appraiser's  report 
remitted  to  him  for  correction  as  indicated." 

(6)  Property  without  state  when  trust  deed  executed  not 

taxable  although  within  state  at  grantor's  death 
IN  MATTER  OF  EDMUND  DWIGHT,  N.  Y.  Law  Journal,  Octo- 
ber 8,  1911,  affirmed,  without  opinion,  149  App.  Div.  912,  it 
was  held  that  where  a  deed  of  trust  was  executed  by  a  non- 


TRUST  DEED  873 

resident,  and  none  of  the  property  constituting  the  corpus  of 
the  trust  fund  was  then  located  in  this  State,  the  transfer  of  the 
trust  fund  is  not  taxable  here  although  part  of  it  was  invested 
in  New  York  securities  at  the  date  of  the  grantor's  death. 
Surrogate  Fowler  in  his  opinion  said:  "The  decedent  was  a 
resident  of  Massachusetts.  On  September  24,  1894,  he  executed 
a  deed  of  trust  by  which  he  transferred  certain  property  therein 
mentioned  to  a  trustee,  with  directions  to  pay  a  certain  part  of 
the  income  to  himself  during  life,  and  upon  his  death  to  pay  the 
income  to  certain  individuals  named  in  the  deed;  or  in  the  event 
of  the  death  of  either  of  the  said  individuals,  to  pay  the  principal 
to  their  issue,  and  if  they  should  leave  no  issue,  to  pay  it  to  the 
survivors  of  certain  individuals  named  therein.  When  the  deed 
of  trust  was  executed,  all  of  the  property  constituting  the  corpus 
of  the  trust  fund  was  in  the  State  of  Massachusetts,  and  none 
of  it  was  actually  or  constructively  in  the  State  of  New  York. 
Subsequently  to  the  execution  of  the  deed,  but  before  the  death 
of  the  decedent  herein,  the  trustee  sold  a  part  of  the  property 
mentioned  in  the  deed  of  trust,  and  with  the  proceeds  purchased 
certain  shares  of  stock  in  New  York  corporations.  These  shares 
of  stock  were  held  by  the  trustee  at  the  date  of  decedent's 
death  and  constituted  part  of  the  corpus  of  the  trust  fund.  The 
appraiser  designated  to  appraise  this  estate  reported  the  value 
of  these  shares  of  stock  held  by  the  trustee  in  New  York  corpora- 
tions as  taxable,  and  from  the  order  entered  upon  that  report 
the  substituted  trustees  now  appeal. 

"  The  transfer  tax  is  a  tax  imposed  upon  a  particular  method 
of  acquisition  of  property  mentioned  in  the  statute;  it  is  not  a 
property  tax  (Matter  of  Vanderbilt,  172  N.  Y.  69;  Magoun  v. 
Illinois  Trust  &  Sav.  Bank,  170  U.  S.  283),  and  the  basis  of 
the  power  to  tax  is  the  actual  dominion  over  the  subject  of 
taxation  at  the  time  the  tax  is  to  be  imposed  or  jurisdiction  over 
the  person  of  decedent  (Matter  of  Swift,  137  N.  Y.  77;  Matter  of 
Hull,  111  App.  Div.  322,  aff'd,  186  N.  Y.  586).  At  the  time  the 
deed  of  trust  was  executed  by  the  decedent  herein,  neither  the 
person  of  the  grantor  nor  the  property  mentioned  in  the  deed 
was  within  the  jurisdiction  of  the  State  of  New  York.  The  rights 
of  the  various  individuals  mentioned  in  the  deed  to  any  part  of 
the  income  or  to  any  part  of  the  corpus  of  the  trust  fund  were 
derived  from  the  deed  of  trust  and  were  governed  by  the  provi- 
sions of  that  instrument.  They  were  not  created  or  in  any  way 
affected  by  the  laws  of  this  State.  It  is  immaterial  whether  the 


874  TRUST   DEED 

interests  of  the  final  beneficiaries  were  vested  or  contingent  at 
the  time  the  deed  of  trust  was  executed,  as  any  interests  to 
which  they  are  or  may  be  entitled  accrued  by  virtue  of  the 
provisions  of  the  deed  of  trust,  and  not  because  of  any  privilege 
granted  by  the  State  of  New  York.  Therefore,  as  the  transfer 
of  the  property  constituting  the  corpus  of  the  trust  fund  was 
effected  by  a  deed  of  trust  executed  in  a  foreign  State,  and  as  the 
State  of  New  York  had  no  jurisdiction  over  the  person  who 
executed  the  deed  nor  dominion  over  the  property  when  trans- 
ferred by  that  instrument,  and  as  none  of  the  rights  of  the 
individuals  mentioned  hi  the  deed  accrued  by  reason  of  any 
privilege  granted  by  the  State  of  New  York,  this  State  can- 
not impose  a  tax  upon  such  a  transfer.  Order  fixing  tax 
reversed." 

(7)  Remainder  not  taxable  where  trust  deed  executed  prior 
to  enactment  of  statute 

IN  MATTER  OF  JOSEPH  HAWES,  N.  Y.  Law  Journal,  April  8, 
1913,  Surrogate  Fowler  held:  "The  decedent,  who  was  a  resi- 
dent of  Massachusetts,  died  on  the  4th  day  of  July,  1911.  On 
the  27th  day  of  April,  1864,  he  executed  a  deed  of  trust  by 
which  he  conveyed  certain  property  to  trustees,  the  income  to  be 
paid  to  him  during  his  life,  and  upon  his  death  the  principal  to 
be  paid  to  such  persons  as  he  should  by  will  direct,  but  in  default 
of  a  will  to  be  paid  and  distributed  according  to  the  provisions 
of  the  statute  regulating  the  descent  and  distribution  of  intestate 
estates  in  Massachusetts.  At  the  time  of  the  execution  of  the 
deed  of  trust  no  part  of  the  property  constituting  the  corpus  of 
the  trust  fund  consisted  of  property  over  which  the  State  of 
New  York  had  jurisdiction. 

"Prior  to  the  date  of  decedent's  death  the  trustees  sold  part 
of  the  trust  property  and  with  the  proceeds  purchased  shares  of 
stock  in  a  New  York  corporation.  This  stock  constituted  part  of 
the  trust  fund  at  the  date  of  decedent's  death,  and  the  transfer 
tax  appraiser  reported  that  it  was  not  subject  to  a  tax  hi  this 
State.  From  the  order  entered  upon  his  report  the  State  Comp- 
troller has  taken  this  appeal.  The  transfer  tax  is  imposed  upon 
the  transfer  of  property,  and  the  transfer  of  the  corpus  of  the 
trust  fund  after  the  life  estate  of  the  decedent  was  effected  by 
the  deed  of  trust.  The  provision  in  the  deed  of  trust  to  the 
effect  hi  the  event  of  the  grantor  dying  intestate  the  corpus 
of  the  trust  fund  should  be  paid  by  the  trustees  to  the  persons 


UNADMINISTERED    ESTATE  875 

who  would  be  entitled  to  take  the  property  under  the  intestate 
laws  of  Massachusetts,  merely  provided  a  means  for  ascertaining 
in  that  contingency  the  individuals  who  would  take  and  the 
amounts  which  they  would  receive.  The  right  to  take  any  of 
the  trust  fund  was  determined  by  the  intestate  laws,  but  the 
transfer  of  the  property  was  effected  by  the  deed  of  trust.  No 
administrator  was  appointed  hi  Massachusetts  and  the  property 
constituting  the  trust  fund  was  paid  by  the  trustees  to  the 
decedent's  niece,  who  was  the  only  next  of  kin  entitled  to 
receive  his  property  under  the  terms  of  the  trust  deed. 

"The  property  having  been  transferred  by  virtue  of  the 
provisions  of  the  deed  of  trust,  and  the  deed  having  been  exe- 
cuted prior  to  the  enactment  of  our  transfer  tax  statute,  the 
transfer  of  that  part  of  the  property  consisting  of  shares  of 
stock  hi  a  New  York  corporation  is  not  subject  to  a  transfer 
tax  hi  this  State  (Matter  of  Dwight,  SUIT.  Decs.,  1911,  p.  737, 
aff'd,  149  App.  Div.  912;  Matter  of  Smith,  150  App.  Div. 
805)." 

For  discussion  relative  to  CONTINGENT  REMAINDERS  executed 
before  enactment  of  statute  but  falling  hi  afterwards  vide  Matter 
of  Smith,  150  App.  Div.  805. 

TRUSTEE'S  COMMISSIONS 

Are  allowed  as  a  deduction.  Matter  of  Gihon,  169  N.  Y. 
443-446;  Matter  of  Shields,  68  Misc.  264-267;  Matter  of 
Silliman,  79  App.  Div.  98,  affirmed,  without  opinion,  175  N.  Y. 
513. 

For  a  discussion  of  trustee's  commissions  under  §  3  of  Laws 
1887,  chap.  713,  supra,  page  415,  vide  opinion  of  comptroller, 
1  State  Department  Reports,  585. 

UNADMINISTERED  ESTATE 

It  is  not  necessary  to  await  for  an  accounting  in  order  to 
institute  transfer  tax  proceedings.  Vide  Appraisal. 

Interest  of  a  decedent  in  an  unadministered  estate  of  another 
decedent  is  subject  to  tax,  but  the  tax  cannot  be  imposed  until 
the  estate  is  determined.  Matter  of  Clinch,  180  N.  Y.  300-303; 
vide  etiam  second  sentence  of  §  222;  and  Matter  of  Gans, 
N.  Y.  Law  Journal,  April  13,  1912,  opinion  quoted  post, 
page  862. 


876  UNASCERTAINABLE   VALUE 

UNASCERTAINABLE  VALUE 

Vide  Matter  of  Westurn,  152  N.  Y.  93-103,  supra,  page  212; 
Matter  of  Emilia  C.  De  Sala,  N.  Y.  Law  Journal,  July  20,  1912, 
opinion  quoted  sub  Time  of  Tax. 

UNCONSTITUTIONAL 

Vide  Constitutionality. 

UNITED  STATES 

(1)  Transfer    to    United    States          (3)  Appeal  to  United  States  Su- 

is  taxable.  preme  Court. 

(2)  United  States  bonds.  (4)  United  States  Supreme  Court 

cases. 

(1)  Transfer  to  United  States  is  taxable 

TRANSFER  TO  UNITED  STATES  is  taxable.  Matter  of  Merriam, 
141  N.  Y.  479,  sustained  in  163  U.  S.  625,  sub  nom.  United 
States  v.  Perkins,  supra,  page  183;  Matter  of  Cullum,  76  Hun, 
610,  affirmed,  without  opinion,  145  N.  Y.  593;  People  ex  rel. 
U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475-482. 

(2)  United  States  bonds 

Are  taxable  in  resident  estate,  but  not  in  non-resident  estate. 

Prior  to  the  1892  amendment  the  transfers  of  United  States 
bonds  were  taxable  in  a  resident's  estate.  Wallace  v.  Myers, 
38  Fed.  Rep.  184;  Matter  of  Sherman,  153  N.  Y.  1-5. 

Not  so  in  non-resident's  estate  even  though  bonds  physically 
within  state  at  death  of  non-resident  decedent.  Matter  of 
Schermerhorn,  50  Misc.  233. 

From  amendment  by  chap.  309,  Laws  1892,  in  effect  May  1, 
1892,  to  amendment  by  chap.  88,  Laws  1898,  in  effect  March  21, 
1898,  transfers  of  United  States  bonds  were  held  not  to  be  sub- 
ject to  tax.  Matter  of  Whiting,  150  N.  Y.  27-31;  Matter  of 
Sherman,  153  N.  Y.  1 ;  Matter  of  Coogan,  162  N.  Y.  613;  Matter 
of  Purdy,  24  Misc.  301. 

Taxable  since  March  21,  1898,  in  a  resident's  estate.  Matter 
of  Plummer,  161  N.  Y.  631,  sustained  in  178  U.  S.  115,  sub  nom. 
Plummer  v.  Coler. 

In  non-resident's  estate  United  States  bonds  were  taxable 
from  said  1898  amendment  until  amendment  by  Laws  1911, 
chap.  732,  in  effect  July  21,  1911,  vide,  supra,  page  526,  pro- 


UNRECORDED   DEED  877 

vided  they  were  physically  kept  within  the  state  at  the  time  of 
decedent's  death. 

Vide  Federal  Inheritance  Tax. 

(3)  Appeal  to  United  States  Supreme  Court 

UNITED  STATES  SUPREME  COURT;  a  right  under  United  States 
constitution  must  be  specially  set  up  and  claimed  in  state  courts, 
as  required  by  §  709  of  U.  S.  Revised  Statutes,  in  order  to  give 
jurisdiction.  Matter  of  Houdayer,  150  N.  Y.  37,  writ  of  error 
dismissed  in  175  U.  S.  32,  sub  nom.  Scudder  v.  Comptroller; 
Matter  of  Tilt,  182  N.  Y.  557,  reversed  in  207  U.  S.  43,  sub 
nom.  Tilt  v.  Kilsey;  Matter  of  Stickney,  185  N.  Y.  107,  writ  of 
error  dismissed  in  209  U.  S.  419,  sub  nom.  Stickney  v.  Kelsey. 

(4)  United  States  Supreme  Court  cases 

Matter  of  Merriam,  141  N.  Y.  479,  sustained  in  163  U.  S. 
625,  sub  nom.  United  States  v.  Perkins;  Matter  of  Houdayer, 
150  N.  Y.  37,  writ  of  error  dismissed  in  175  U.  S.  32,  sub  nom. 
Scudder  v.  Comptroller;  Matter  of  Plummer,  161  N.  Y.  631, 
sustained  in  178  U.  S.  115,  sub  nom.  Plummer  v.  Coler;  Matter 
of  Dows,  167  N.  Y.  227,  sustained  in  183  U.  S.  278,  sub  nom. 
Orr  v.  Oilman;  Matter  of  Blackstone,  171  N.  Y.  682,  sustained  in 
188  U.  S.  189,  sub  nom.  Blackstone  v.  Miller;  Matter  of  Delano, 
176  N.  Y.  486,  sustained  in  205  U.  S.  466,  sub  nom.  Chanler  v. 
Kelsey;  Matter  of  Tilt,  182  N.  Y.  557,  reversed  in  207  U.  S. 
43,  sub  nom.  Tilt  v.  Kelsey;  Matter  of  Stickney,  185  N.  Y.  107, 
writ  of  error  dismissed  in  209  U.  S.  419,  sub  nom.  Stickney 
v.  Kelsey;  Matter  of  Lord,  186  N.  Y.  549,  sustained  in  211 
U.  S.  477,  sub  nom.  Beers  v.  Glynn;  Matter  of  Keeney,  194 
N.  Y.  281,  sustained  in  222  U.  S.  525,  sub  nom.  Keeney  v.  New 
York;  Matter  of  Tiffany,  202  N.  Y.  550,  appeal  pending. 

UNKNOWN  NEXT  OF  KIN 

Where  the  next  of  kin  are  unknown  the  tax  is  fixed  at  the 
highest  rate.  Matter  of  Lind,  196  N.  Y.  570,  supra,  page  369. 

UNLISTED  STOCK 

Vide  Closely  Held  Stock. 

UNRECORDED  DEED 

Unrecorded  deed  not  delivered  by  grantor;  held,  that  property 
subject  to  tax.  Matter  of  Sharer,  36  Misc.  502;  Matter  of 
Jones,  65  id  121.  Vide  Gift. 


878  VACATING   DECREE 

VACATING  DECREE 

(1)  Cases  in   which   application          (5)  Cases   in   which  application 

granted.  denied. 

(2)  Motion  to  modify  decree.  (6)  Matter    of    Townsend    dis- 

(3)  Petition.  tinguished. 

(4)  Order  amending  original  or-  (7)  Resettlement  of  order. 

der. 

Section  225  of  the  Tax  Law  and  subdivision  6  of  §  2481  of  the 
Code  of  Civil  Procedure  are  the  provisions  which  govern  the 
action  of  the  surrogate  upon  an  application  to  vacate  or  modify 
his  decree.  These  provisions  are  distinct  from  the  remedy  of 
appeal  provided  for  by  the  first  sentence  of  §  232  (vide  Appeal), 
and  also  from  the  application  to  the  Supreme  Court  for  a  reap- 
praisal under  the  last  paragraph  of  §  232  (vide  Reappraisal). 

As  to  REFUND  vide  cases  cited  sub  Refund. 

(1)  Cases  in  which  application  granted 

Decree  will  be  vacated  where  it  is  "Von>  AS  HAVING  BEEN 
MADE  WITHOUT  JURISDICTION."  Matter  of  Coogan,  162  N.  Y. 
613,  supra,  page  239;  Matter  of  O'Berry,  179  N.  Y.  285,  supra, 
page  289;  Matter  of  Warren,  62  Misc.  444-446;  Matter  of 
Cameron,  181  N.  Y.  560;  Matter  of  Scott,  208  N.  Y.  602,  supra, 
page  396. 

Where  both  parties  mistakenly  supposed  that  the  statute, 
chap.  76,  Laws  1899,  was  constitutional.  "The  proposition 
was  not  litigated  nor  decided  but  assumed,"  and  consequently 
the  surrogate  may,  in  his  discretion,  relieve  from  consequences 
of  mistake.  Matter  of  Scrimgeour,  175  N.  Y.  507. 

Decree  modified  "because  at  most  it  was  A  MISTAKE  ALL 
ROUND."  Matter  of  Backhouse,  110  App.  Div.  737-739, 
affirmed,  without  opinion,  185  N.  Y.  544. 

Where  decree  taxed  a  transfer  which  was  exempt  under  §  221, 
it  being  clear  that  it  was  "a  MUTUAL  MISTAKE  on  the  part  of 
the  appraiser  and  the  petitioner  as  to  the  status  and  rights  of 
the  latter."  Matter  of  Townsend,  153  App.  Div.  85-89. 

May  vacate  decree  "for  the  purpose  of  correcting  an  INAD- 
VERTENT ERROR  committed  by  the  surrogate  under  a  mistake 
of  fact."  Matter  of  Earle,  74  App.  Div.  458. 

"The  appraiser  having  MADE  A  MISTAKE  of  fact  in  his  re- 
port as  to  the  taxable  value  of  the  interest  of  one  of  the  legatees, 
the  order  fixing  tax  entered  upon  this  report  will  be  vacated  and 
the  report  remitted  to  him  for  correction,  notwithstanding 


VACATING   DECREE  879 

that  the  time  to  appeal  from  the  order  has  expired."    Matter  of 
Head,  N.  Y.  Law  Journal,  December  22,  1911. 

Order  of  surrogate  declaring  an  estate  exempt  from  transfer 
tax  vacated  for  the  reason  that  it  was  MADE  WITHOUT  NOTICE 
to  Comptroller.  Matter  of  Collins,  104  App.  Div.  184. 

Where  surrogate  had  not  given  NOTICE  OF  APPRAISAL  RE- 
QUIRED BY  §  231,  and  it  appeared  that  there  had  been  no  laches 
on  the  part  of  the  petitioner.  Matter  of  Daly,  34  Misc.  148. 
Time  to  appeal,  however,  under  §  232  runs  from  the  fixing  of 
tax  by  surrogate.  Matter  of  Connelly,  38  Misc.  466-470. 

DOWER  was  not  deducted  from  value  of  decedent's  real  estate, 
and  an  application  was  made  to  vacate  order  assessing  tax. 
Surrogate  Thomas  in  Matter  of  Weiler,  122  N.  Y.  Supp.  608, 
affirmed,  without  opinion,  139  App.  Div.  905,  held  that  the 
deduction  of  the  dower  interest  should  have  been  made  because 
it  was  not  "subject  to  transfer  tax,  and  in  assuming  it  to  be 
so  both  parties  were  in  error  when  the  order  fixing  tax  was 
made. 

"The  motion  to  vacate  the  order  and  remit  the  matter  to  an 
appraiser  for  the  purpose  of  correcting  this  error  is  granted. 
Matter  of  Scrimgeour,  175  N.  Y.  507,  67  N.  E.  1089;  Matter 
of  Coogan,  162  N.  Y.  613,  57  N.  E.  1107;  Matter  of  Silliman, 
175  N.  Y.  513,  67  N.  E.  1090;  Matter  of  Willets,  119  App. 
Div.  119,  100  N.  Y.  Supp.  850,  104  N.  Y.  Supp.  1150,  af- 
firmed, 190  N.  Y.  527,  83  N.  E.  1134." 

IN  ACTION  TO  CONSTRUE  WILL  it  was  held  that  certain  real 
estate  did  not  belong  to  decedent.  Thereupon  the  executor 
made  a  motion  to  modify  the  order  in  the  transfer  tax  proceed- 
ing which  had  included  said  real  estate.  The  motion  was 
granted,  and  the  order  of  the  surrogate  was  made  striking  out 
from  the  tax  assessed  the  property  in  question.  Matter  of 
Willets,  119  App.  Div.  119-126,  affirmed,  without  opinion, 
190  N.  Y.  527. 

Decree  modified  so  as  to  include  DEDUCTIONS  FOR  COMMIS- 
SIONS. Matter  of  Silliman,  175  N.  Y.  513,  supra,  page  279. 

Where  "certain  NOTES  which  were  owned  by  the  deceased 
and  were  held  by  the  executor  at  the  time  the  transfer  tax  was 
fixed,  were  worthless  and  uncollectible,  which  fact  was  not 
known  to  the  executor  or  to  the  surrogate  at  the  time  the  tax 
was  fixed,  it  being  believed  that  the  signers  of  the  notes  would 
pay  them."  Matter  of  Sherar,  25  Misc.  138-139. 

Where  LEGACIES  LAPSED  prior  to  decedent's  death,  and 


880  VACATING   DECREE 

original  decree  taxed  transfer  as  though  legacies  had  not  lapsed. 
Morgan  v,  Cowie,  49  App.  Div.  612. 

DEBTS  PROVEN  AGAINST  ESTATE  AFTER  APPRAISAL. 

Surrogate  Thomas  in  Matter  of  Morgan,  36  Misc.  753 
(1902),  refused  to  modify  order  affixing  tax  so  as  to  include 
claims  for  deductions  which  were  not  urged  before  the 
appraiser. 

Section  225  held  to  apply  on  application  for  modification  of 
decree  for  the  purpose  of  including  deduction  of  DEBT  OF 
DECEDENT  OVERLOOKED  BY  EXECUTOR.  Matter  of  Campbell, 
50  Misc.  485. 

Surrogate  of  Saratoga  County  refused  to  modify  decree  to 
include  deductions  for  claim  rejected  by  executor  but  subse- 
quently recovered  on,  claim  not  included  in  original  deductions, 
and- further  expenses  in  administering  estate.  "If,  every  time  a 
chattel  was  sold  for  more  or  less  than  the  value  at  which  it  was 
appraised  or  a  new  debt  was  discovered,  the  surrogate  could  be 
called  upon  to  make  an  order  modifying  his  determination,  he 
would  have  no  time  for  other  business."  Matter  of  Connelly, 
38  Misc.  466-469. 

Surrogate  of  Otsego  County  in  Matter  of  Hamilton,  41  Misc. 
268,  refused  to  modify  order  so  as  to  include  debt  which  had 
not  been  discovered  at  time  of  appraisal. 

The  provisions  of  §  225  are  contra  to  the  decision  in  the 
Hamilton  case,  supra,  and  to  that  portion  of  the  decision  in 
the  Connelly  case,  supra,  relating  to  discovery  of  new  debt.  The 
section  provides:  "If  any  debts  shall  be  proven  against  the  es- 
tate of  a  decedent  after  the  payment  of  any  legacy  or  distribu- 
tive share  thereof,  from  which  any  such  tax  has  been  deducted 
or  upon  which  it  has  been  paid  by  the  person  entitled  to  such 
legacy  or  distributive  share,  and  such  person  is  required  by 
order  of  the  surrogate  having  jurisdiction,  on  notice  to  the  state 
comptroller,  to  refund  the  amount  of  such  debts  or  any  part 
thereof,  an  equitable  proportion  of  the  tax  shall  be  repaid  to 
him  by  the  executor,  administrator  or  trustee,  if  the  tax  has  not 
been  paid  to  the  state  comptroller  or  county  treasurer;  or  if 
such  tax  has  been  paid  to  such  state  comptroller  or  county 
treasurer,  such  officer  shall  refund  out  of  the  funds  in  his  hands 
or  custody  to  the  credit  of  such  taxes  such  equitable  proportion 
of  the  tax,  and  credit  himself  with  the  same  in  the  account 
required  to  be  rendered  by  him  under  this  article." 


VACATING    DECREE  881 

(2)  Motion  to  modify  decree 

The  application  to  open,  vacate  or  modify  a  decree  must  be 
made  to  the  surrogate  having  jurisdiction  of  the  estate.  Sec- 
tion 225.  As  to  jurisdiction  in  resident  estate  vide,  page  56, 
and  in  non-resident  estate,  page  137. 

The  motion  should  be  made  on  notice.  The  notice  of  motion 
in  Matter  of  Scott,  208  N.  Y.  602,  supra,  page  396,  was  as 
follows: 


SURROGATES'  COURT,  NEW  YORK  COUNTY. 


Notice  of  Motion  under  §  2481, 
Subd.  6,  of  Code  Civ.  Proc. 


In  the  Matter  of  the  Transfer  Tax 
upon  the  Estate  of 

ROBERT  SCOTT, 

Deceased. 

SIR:  PLEASE  TAKE  NOTICE  that  the  undersigned  will  apply  to  the 
Surrogate  of  the  County  of  New  York,  at  the  Surrogates'  Court  to  be 
held  in  and  for  the  County  of  New  York,  on  the  9th  day  of  July,  1912, 
at  10:30  o'clock  in  the  forenoon  of  that  day,  or  as  soon  thereafter  as 
counsel  can  be  heard,  for  an  order  modifying  the  order  fixing  tax  herein, 
referred  to  in  the  petition  hereto  annexed,  and  for  such  other  and  fur- 
ther relief  as  may  be  proper. 
Dated,  New  York,  July  8th,  1912. 

Yours,  &c., 

WILLIAM  P.  MALONEY, 

To  THOMAS  E.  RUSH,  Esq.,  Attorney  for  Administrators. 

Attorney  for  State  Comptroller. 

(3)  Petition 

The  petition  should  set  forth  fully  the  facts  upon  which  peti- 
tioner bases  his  claim  that  the  decree  should  be  modified  or 
vacated.  What  the  allegations  should  be  vary  with  the  nature 
of  the  relief  sought  and  the  circumstances  of  each  particular 
case.  The  petition  in  the  Scott  case,  supra,  affords  an  example 
of  the  method  of  presenting  the  facts  to  the  surrogate. 

SURROGATES'  COURT,  NEW  YORK  COUNTY. 

In   the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of  [  Petition. 

ROBERT  SCOTT, 
Deceased. 

To  THE  SURROGATES'  COURT  OF  THE  COUNTY  OF  NEW  YORK: 
The  petition  of  William  P.  Maloney  respectfully  shows: 
That  your  petitioner  resides  at  No.  1  West  69th  Street,  Borough  of 

56 


882  VACATING    DECREE 

Manhattan,  City,  County  and  State  of  New  York.  That  he  is  attorney 
for  the  administrators  of  the  above-named  decedent's  estate,  to  wit: 
Robert  A.  Scott  and  William  Scott,  and  as  such  has  had  full  charge  of 
all  the  affairs  of  the  estate  and  is  fully  acquainted  with  and  has  full 
knowledge  of  the  facts  herein  set  forth. 

Upon  information  and  belief: 

That  Robert  Scott,  the  above-named  decedent,  died  a  resident  of  the 
State  of  New  York  on  July  24th,  1910,  intestate  and  thereafter  and  on 
August  8th,  1910,  Letters  of  Administration  were  duly  issued  by  this 
Court  to  Robert  A.  Scott  and  William  Scott. 

Thereafter  and  in  regular  course  a  transfer  tax  proceeding  was  had 
herein  and  Headley  M.  Greene,  Esq.,  filed  his  report  in  the  office  of  this 
Court  on  September  27th,  1910,  and  his  supplemental  report  in  the 
office  of  this  Court  on  September  1st,  1911,  wherein  he  reported  the 
value  of  the  taxable  property  belonging  to  the  above-named  decedent, 
being  the  sum  of  $129,402.41,  all  of  which  said  property  the  said  ap- 
praiser reported,  passed,  under  the  decedent's  will,  to  the  decedent's 
brother,  William  Scott. 

That  thereafter  and  on  the  21st  day  of  September,  1911,  an  order  was 
made  by  Mr.  Surrogate  Fowler  and  entered  on  that  day  in  the  office  of 
this  Court,  wherein  the  amount  of  tax,  as  computed  upon  the  taxable 
value  of  decedent's  property,  was  inadvertently  and  erroneously  fixed 
in  the  sum  of  $2,632.07,  whereas  the  correct,  accurate  and  true  amount 
of  said  tax  should  be  the  sum  of  $2,382.07,  computed  as  follows: 

Tax. 

$  25,000.00  @  1% $  250.00 

100,000. 00®  2% 2,000.00 

4,402.41©  3% 132.07 


Total  tax $2,382.07 

That  said  tax  as  fixed  by  the  order  of  September  21st,  1911,  is  exces- 
sive in  amount  and  erroneously  computed  as  hereinbefore  alleged,  and 
your  petitioner  respectfully  prays  this  Court  to  redress  the  wrong  done, 
by  amending  the  order  fixing  tax  by  changing  the  amount  of  tax,  as 
assessed  therein,  from  the  sum  of  $2,632.07  to  the  sum  of  $2,382.07 
and  for  such  other  and  further  relief  as  to  the  Court  may  seem  just  and 
equitable. 

Dated,  New  York,  July  8th,  1912. 

WM.  P.  MALONEY, 

Petitioner. 
STATE  OF  NEW  YORK,     } 

f     9*v     * 

COUNTY  OF  NEW  YORK,  j 

WILLIAM  P.  MALONEY,  being  duly  sworn,  deposes  and  says:  That  he 
is  the  petitioner  herein  and  is  acquainted  with  the  facts  in  this  pro- 


VACATING   DECREE  883 

ceeding;  that  he  has  read  the  foregoing  petition  and  knows  the  con- 
tents thereof,  and  that  the  same  is  true  to  his  own  knowledge  except  as 
to  the  matters  therein  stated  to  be  alleged  upon  information  and 
belief,  and  as  to  those  matters  he  believes  the  same  to  be  true. 

WM.  P.  MALONBT. 
Sworn  to  before  me,  this 
8th  day  of  July,  1912. 
OTTO  A.  GILLIG, 
Notary  Public, 
New  York  County. 

(4)  Order  amending  original  order 

The  order  granted  upon  this  petition  was  affirmed  by  the 
Court  of  Appeals,  and  was  as  follows: 

At  a  Surrogates'  Court  held  in  and 
for  the  County  of  New  York,  at 
the  Hall  of  Records,  Borough  of 
Manhattan,  City  of  New  York, 
on  the  9th  day  of  August,  1912. 

Present:  HON.  JOHN  P.  COHALAN,  Surrogate. 

In  the  Matter  of  the  Transfer 
Tax  upon  the  Estate  of  Order 

ROBERT  SCOTT, 

Deceased. 

On  reading  and  filing  the  petition  of  William  P.  Maloney  verified 
on  July  8th,  1912,  wherein  it  appears  that  the  transfer  tax  as  assessed 
upon  the  estate  of  the  above  named  decedent  was  erroneously  com- 
puted, and  due  notice  of  this  application  and  motion  having  been 
given  to  Thomas  E.  Rush,  Esq.,  Attorney  for  the  State  Comptroller. 

Now  on  motion  of  Henry  A.  Miller,  Esq.,  Attorney  for  the  petitioner 
herein,  Thomas  E.  Rush,  Esq.,  appearing  in  opposition  thereto,  it  is 

ORDERED,  that  the  order  fixing  tax  heretofore  made  and  entered 
herein  on  the  21st  day  of  September,  1911,  be  and  the  same  hereby  is 
amended  so  as  to  read  as  follows:  Ordered  and  Adjudged  that  the 
cash  value  of  the  property  referred  to  in  the  Appraiser's  report  filed 
herein,  the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  act  in 
relation  to  taxable  transfers  of  property  and  the  tax  to  which  said 
transfers  are  liable  is  as  follows: 

Cash  Value  Tax  Assessed 

Beneficiary. 


William  Scott,  brother  ...........  $129,402  .  41  $2,382  .  07 

JOHN  P.  COHALAN, 
Surrogate. 


884  VACATING   DECREE 

(5)  Cases  in  which  application  denied 

APPLICATION  DENIED  BY  REASON  OF  LAPSE  OF  TIME.  Matter 
of  Hoople,  179  N.  Y.  308,  supra,  page  290;  Matter  of  Bucking- 
ham, 106  App.  Div.  13-17;  Matter  of  Von  Post,  35  Misc.  367. 

Surrogate's  decree  fixing  VALUE  OF  REAL  PROPERTY  not  modi- 
fied because  property  subsequently  sells  for  a  less  sum.  Matter 
of  Lowry,  89  App.  Div.  226;  Matter  of  Barnum,  129  App.  Div. 
418;  Matter  of  Meyer,  209  N.  Y.  386,  supra,  page  397. 

Held,  that  surrogate  has  not  power  to  set  aside  previous 
decree,  not  appealed  from,  which  assessed  certain  securities. 
Matter  of  Schermerhorn,  38  App.  Div.  350;  Matter  of  Fulton, 
30  Misc.  70. 

ELECTION  to  treat  property  as  taxable  prevents  subsequent 
application  to  vacate  decree.  Matter  of  Mather,  179  N.  Y. 
526,  supra,  page  295. 

FRAUDULENTLY  CONCEALED  ASSETS.  In  Matter  of  Arza  C. 
Peck,  N.  Y.  Law  Journal,  January  12,  1911,  affirmed,  without 
opinion,  149  App.  Div.  912,  Surrogate  Cohalan  held:  "The 
affidavit  submitted  by  the  attorney  for  the  State  Comptroller 
does  not  clearly  and  satisfactorily  show  that  the  executor 
fraudulently  concealed  from  the  appraiser  certain  assets  of  the 
estate,  and  in  the  absence  of  such  convincing  evidence  the  court 
will  not  vacate  its  order  entered  more  than  four  years  ago 
(Matter  of  Barnum,  129  App.  Div.  418;  Matter  of  Lowry,  89 
App.  Div.  226;  Deagan  v.  King,  83  App.  Div.  428)." 

Surrogate  Cohalan,  in  Matter  of  Badger,  N.  Y.  Law  Journal, 
June  8,  1912,  refused  to  vacate  order  fixing  tax  which  had  not 
followed  the  RULE  IN  THE  PORTER  CASE  (67  Misc.  19,  affirmed, 
without  opinion,  148  App.  Div.  896),  the  time  to  appeal  having 
expired.  He  said :  "  The  appraiser  deducted  from  the  New  York 
assets  the  commissions  allowed  by  the  laws  of  this  State,  but 
he  refused  to  make  any  deductions  for  the  administration  ex- 
penses incurred  outside  of  the  State.  On  the  7th  day  of  Decem- 
ber, 1910,  an  order  fixing  tax  was  duly  entered  upon  his  report, 
and  no  appeal  was  taken  from  the  order.  Whether  the  expense 
incurred  in  the  administration  of  the  estate  outside  of  this 
State  should  be  deducted  from  the  New  York  assets  in  the 
proportion  which  the  New  York  assets  bore  to  the  entire  assets 
of  the  estate  was  a  question  of  law,  and  the  appraiser's  refusal  to 
make  the  deduction,  together  with  the  order  of  the  court  entered 
upon  his  report,  constituted  a  determination  that  the  estate 
was  not  entitled  to  have  such  a  deduction  made.  If  this  deter- 


VACATING   DECREE  885 

mination  was  erroneous,  the  remedy  of  the  administrator  was 
by  appeal,  as  prescribed  in  §  232  of  the  Tax  Law.  No  appeal 
having  been  taken  from  the  order,  this  application  must  be 
denied.  (Matter  of  Lowry,  89  App.  Div.  226;  Matter  of  Bar- 
num,  129  App.  Div.  418;  Matter  of  Monteith,  27  Misc.  163.)" 

WHERE  PROPERTY  is  BROUGHT  TO  THE  ATTENTION  OF  THE 
APPRAISER  and  he  has  held  it  not  subject  to  tax,  and  the  time 
to  appeal  from  order  of  surrogate  confirming  report  has  ex- 
pired, the  surrogate  has  no  power  to  cause  another  appraisal 
although  the  property  was  erroneously  declared  exempt.  Mat- 
ter of  Crerar,  56  App.  Div.  479. 

AN  ERROR  OF  LAW  should  be  corrected  by  appeal.  Matter  of 
Niven,  29  Misc.  550. 

Valuation  of  BUSINESS  OF  DECEDENT  having  been  assessed  at 
figure  given  by  executor,  an  application  to  vacate  decree  and  for 
a  new  appraisal  was  denied.  Matter  of  Wallace,  28  Misc.  603. 

Decree  of  surrogate  not  appealed  from  is  an  adjudication 
upon  the  liability  of  transfers  to  taxation,  is  final  and  "a  com- 
plete bar  to  the  maintenance  of  any  subsequent  proceeding  by 
the  DISTRICT  ATTORNEY  to  collect  a  tax."  Matter  of  Wolfe, 
137  N.  Y.  205-214. 

Adjudication  of  surrogate  in  a  transfer  tax  proceeding  is 
"  binding  upon  the  question  of  taxation  only."  Amherst  College 
v.  Ritch,  151  N.  Y.  282-343. 

(6)  Matter  of  Townsend  distinguished 

IN  MATTER  OF  VAN  NEST,  N.  Y.  Law  Journal,  November  8, 
1913,  an  application  was  made  to  vacate  the  order  fixing  tax 
and  to  remit  the  appraiser's  report  to  him  for  correction.  In 
denying  the  application  Surrogate  Cohalan  said : 

"The  decedent,  who  was  a  resident  of  Indiana,  died  on  the 
17th  of  April,  1907.  An  appraiser  was  duly  designated  by  this 
court  to  appraise  his  estate  for  the  purpose  of  the  transfer  tax. 
The  administratrix  of  the  estate  filed  an  affidavit  with  the  ap- 
praiser alleging  that  the  only  property  of  which  the  decedent 
died  possessed  in  this  State  was  ten  shares  of  stock  of  the 
AMERICAN  EXPRESS  COMPANY  and  that  the  value  of  this  stock 
was  $1,900.  The  appraiser  found  the  value  of  the  stock  to  be 
$2,000,  and  an  order  assessing  a  tax  upon  the  estate  was  entered 
on  November  23,  1910. 

"No  appeal  was  taken  from  the  order.  About  eighteen 
months  after  the  entry  of  the  order  this  application  to  vacate 


886  VALUE 

the  order  and  to  remit  the  report  to  the  appraiser  was  made, 
and  upon  the  return  day  the  matter  was  placed  upon  the  Re- 
served Calendar.  Subsequently  and  on  July  11,  1912,  the  ques- 
tion involved  in  this  application  came  before  this  court  hi  the 
MATTER  OF  LITCHFIELD  (Surr.  Decs.,  1912,  p.  734)  and  it  was 
there  held  that  the  valuation  of  the  stock  by  the  appraiser  at 
its  full  value  and  entry  of  the  order  upon  his  report  constituted 
a  determination  which  could  be  reviewed  only  upon  an  appeal, 
and  that  as  no  appeal  was  taken  within  the  time  prescribed  by 
statute  the  application  should  be  denied.  The  decision  hi  that 
matter  is  controlling  in  this,  unless  the  decision  hi  the  Matter  of 
Townsend  (153  App.  Div.  85),  decided  subsequently  to  the 
Matter  of  Litchfield,  can  be  construed  as  extending  the  principle 
there  enunciated  to  the  facts  hi  the  Matter  of  Litchfield. 

"  In  the  Matter  of  Townsend  there  was  no  evidence  submitted 
to  the  appraiser  upon  which  he  could  make  a  determination  as 
to  the  taxability  of  the  bequest  to  the  New  York  Exchange  for 
Women's  Work.  The  court  therefore  held  that  the  mistake 
could  be  corrected  after  the  time  to  appeal  from  the  order  had 
expired.  In  the  matter  under  consideration  the  evidence  as  to 
the  value  of  the  stock  was  submitted  to  the  appraiser,  and  upon 
such  evidence  he  made  a  finding  that  the  value  of  the  stock  was 
$200  a  share.  Such  determination  upon  evidence  duly  presented 
distinguishes  this  matter  from  the  Matter  of  Townsend." 

(7)  Resettlement  of  order 

A  MOTION  FOR  RESETTLEMENT  of  the  ordered  entered  upon 
the  decision  sustaining  the  appeal  under  the  first  sentence  of 
§  232  hi  Matter  of  Francis,  supra,  page  749,  was  denied  by  Sur- 
rogate Cohalan  in  Matter  of  Francis,  N.  Y.  Law  Journal, 
November  26,  1913,  the  surrogate  saying:  "The  proposed  order 
contains  a  provision  directing  that  the  appraiser's  report  be 
remitted  to  him  for  further  testimony.  As  the  papers  do  not 
contain  an  allegation  that  material  evidence  has  been  discovered 
since  the  appeal  was  argued  which,  if  submitted  to  the  court, 
might  affect  its  decision,  the  application  is  denied." 

"The  surrogate's  order  denying  the  motion  to  resettle  his 
first  order  is  not  appealable."  Matter  of  Sondheim,  69  App. 
Div.  5. 

VALUE 

The  subject  of  valuation  of  the  assets  of  a  RESIDENT  dece- 


WHAT   LAW   GOVERNS  887 

dent  is  discussed  under  the  schedules  of  assets  supra,  page  96. 
Of  a  NON-RESIDENT  Estate,  supra,  page  133. 

Vide  Annuities;  Cash  Value;  Closely  Held  Stock;  Good  Will; 
Life  Estate. 

Value  by  which  the  tax  is  to  be  measured  is  the  value  of  the 
estate  at  the  time  of  the  transfer  of  title,  and  not  its  value  at  the 
time  of  the  transfer  of  possession.  Matter  of  Vassar,  127  N.  Y. 
1-8;  Matter  of  Davis,  149  N.  Y.  539-547. 

Surrogate  Ketcham  in  Matter  of  Van  Pelt,  63  Misc.  616,  said: 
"  No  doubt,  for  the  purpose  of  the  transfer  tax,  the  estate  must 
be  valued  as  of  the  time  of  death;  but  whether  each  executor 
shall  receive  a  full  commission  is  to  be  determined  by  the  value 
of  the  estate  which  they  shall  have  administered." 

VESTED  ESTATE 

"A  tax  cannot  be  imposed  upon  a  right  to  the  succession 
where  the  right  accrued  prior  to  the  existence  of  the  statute." 
Matter  of  Jonathan  Smith,  150  App.  Div.  805-807,  and  cases 
therein  cited.  Vide  Remainders. 

As  to  tax  under  subdivision  6  of  §  220  upon  exercise  of  power 
of  appointment  derived  from  a  disposition  of  property  made 
prior  to  the  statute,  vide  Matter  of  Vanderbilt,  50  App.  Div. 
246,  affirmed,  on  opinion  below,  163  N.  Y.  597;  Matter  of 
Delano,  176  N.  Y.  486,  sustained  in  205  U.  S.  466,  sub  nom. 
Chanler  v.  Kelsey,  supra,  page  280.  Vide  Power  of  Appointment. 

VOTING 

In  questions  of  disputed  residence  of  decedent  the  voting 
place  where  decedent  last  voted  becomes  material.  For  affidavit 
re  residence  vide  page  140. 

WATER  RATES 

Vide  Taxes. 

WEARING  APPAREL 

Wearing  apparel  of  ordinary  kind,  vide  page  105. 
Laces,  shawls,  furs  and  the  like,  vide  page  108. 

WHAT  LAW  GOVERNS 

Rights  of  the  parties  governed  by  the  statute  in  existence  at 
the  time  of  the  transfer;  procedure  by  the  statute  in  force  at  the 
time  the  proceedings  are  taken.  Matter  of  Abraham,  151  App. 
Div.  411,  and  cases  cited,  supra,  page  54. 


888  WHEN   TAX   ACCRUES 

As  to  when  death  occurs  on  same  day  upon  which  statute  is 
passed,  vide  Matter  of  Dreyfous,  18  N.  Y.  Supp.  767;  Matter 
of  Lane,  157  App.  Div.  694-697,  supra,  page  809. 

Vide  Matter  of  Agnew,  N.  Y.  Law  Journal,  December  13, 
1913,  supra,  page  53,  as  to  transfers  by  trust  deed. 

WHEN  TAX  ACCRUES 

Vide  Time  of  Tax.  For  discussion  of  the  taxable  transfer 
vide  page  32. 

WIDOW 

Vide  Dower;  Tenants  by  the  Entirety;  Wife. 

WIFE 

Vide  Dower;  Tenants  by  the  Entirety. 

Entitled  to  five  thousand  dollars  exemption  and  the  minimum 
rates  of  subdivision  1  of  §  221a;  supra,  page  45. 

WIFE  OF  A  SON  also  entitled  to  said  exemption  and  rates. 

WIDOW  OF  AN  ADOPTED  SON  is  within  the  meaning  of  the 
words  "widow  of  a  son"  in  subdivision  1  of  §  221a.  Matter  of 
Duryea,  128  App.  Div.  205. 

Where  articles  enumerated  in  §  2713  of  Code  of  Civil  Pro- 
cedure do  not  in  fact  exist  as  part  of  decedent's  estate,  deduc- 
tions to  an  amount  equivalent  to  the  assumed  value  of  such 
articles  should  not  be  made.  Matter  of  Libolt,  102  App.  Div. 
29;  Matter  of  Stiles,  64  Misc.  658-662.  As  to  right  of  widow 
when  the  ownership  of  decedent  is  not  sole,  vide  Matter  of 
Hallenbeck,  195  N.  Y.  143. 

WIDOW'S  QUARANTINE  under  §  204  of  Real  Property  Law 
would  appear  to  be  a  proper  deduction.  Matter  of  Stiles, 
supra.  Said  section  204  reads:  "A  widow  may  remain  in  the 
chief  house  of  her  husband  forty  days  after  his  death,  whether 
her  dower  is  sooner  assigned  to  her  or  not,  without  being  liable 
to  any  rent  for  the  same;  and  in  the  meantime  she  may  have  her 
reasonable  sustenance  out  of  the  estate  of  her  husband." 

Husband  of  decedent  was  a  member  of  a  firm,  and  instead  of 
withdrawing  his  profits  he  invested  them  with  his  firm,  there 
being  a  special  account  of  the  same  kept.  He  transferred  this 
account  to  his  wife,  and  it  continued  in  her  name  until  after 
death.  Held,  that  the  account  was  part  of  the  wife's  estate  and 
taxable.  Matter  of  Anthony,  40  Misc.  497. 


WORTHLESS   SECURITIES   OR   CLAIMS  889 

WILL 

A  transfer  by  will  is  subject  to  the  tax.  Section  220;  Matter  of 
Gould,  156  N.  Y.  423;  Matter  of  Rogers,  71  App.  Div.  461- 
465,  affirmed,  on  opinion  below,  172  N.  Y.  617;  etiam  Matter  of 
Edson,  38  App.  Div.  19-22,  affirmed,  on  opinion  below,  159 
N.  Y.  568. 

The  construction  of  wills  is  necessary  in  transfer  tax  pro- 
ceedings, Matter  of  Peters,  69  App.  Div.  465,  and  cases  cited, 
supra,  page  599. 

WITHDRAWAL  OF  OBJECTIONS  TO  PROBATE 

Vide  Matter  of  Cook,  187  N.  Y.  253-255-259,  and  cases  cited 
sub  Compromise  of  Claim. 

WITNESS 

The  "appraiser  is  authorized  to  issue  subpoenas  and  to  com- 
pel the  attendance  of  witnesses  before  him  and  to  take  the 
evidence  of  such  witnesses  under  oath."  Second  paragraph  of 
§  230.  Vide  cases  cited  sub  Contempt  and  sub  Testimony. 

WOMEN'S  CHRISTIAN  TEMPERANCE  UNION 

Exempt  as  educational  under  first  sentence  §  221.  Matter  of 
Field,  147  App.  Div.  927,  affirming  71  Misc.  396. 

WORKS  OF  ART 

Vide  §  2216  supra,  page  43  as  to  when  exempt. 

Works  of  art  should  be  set  forth  in  Schedule  A3  with  title  and 
name  of  artist,  and  appraisal  by  expert  should  be  furnished, 
vide  supra,  page  107. 

WORTHLESS  SECURITIES  OR  CLAIMS 

Corporate  securities  should  be  set  forth  in  Schedule  A4, 
supra,  page  112,  and  other  securities  in  Schedule  A3,  page  109. 

Even  though  the  securities  are  worthless  in  the  opinion  of 
executor  or  administrator  they  should  be  included  in  the 
schedules.  State  upon  what  facts  you  base  your  conclusion 
that  the  securities  are  worthless. 

The  same  situation  exists  as  to  claims,  vide  page  109.  As 
to  debt  forgiven  by  will  where  beneficiary  is  insolvent  vide 


890  YOUNG  MEN'S  CHRISTIAN  ASSOCIATION 

Matter  of  Manning,  169  N.  Y.  449,  supra,  page  258;  Morgan 
v.  Warner,  162  N.  Y.  612,  supra,  page  230. 

YOUNG  MEN'S  CHRISTIAN  ASSOCIATION 

Held  to  be  an  educational  corporation  within  the  meaning 
and  intendment  of  the  first  sentence  of  §  221.  Matter  of  Moses, 
138  App.  Div.  525-528. 


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